Online Policy Group

The Post reported that unnamed sources said the Federal Trade Commission is examining the terms of many of the deals proposed to smaller Internet service providers to determine if they violate Time Warner's promise to open its high-speed cable TV lines to competitors in the wake of its $183 billion merger announcement with America Online Inc.

Time Warner is requiring nearly 40 Internet companies in Texas to give up 75 percent of their subscriber fees and 25 percent of revenues from other sources such as advertising in order to gain access to its cable TV network, according to term sheets obtained by the Post.

In addition, the term sheets indicate Time Warner would get approval control over the Internet service providers' home pages and "prominent above-the-fold areas on the home page of the service for use."

"Totally ridiculous," said Dave Robertson, vice president and general manager of Stic.net, an Internet service provider in San Antonio with more than 10,000 subscribers. "The bottom line is, they don't have a desire to open their network."

Time Warner denied the charge, saying it and AOL are committed to open access, the Post reported.

Cable networks are one way to deliver high-speed Internet access to residential customers. Time Warner's cable network reaches 18.8 percent of all cable customers nationwide.

((andy.sullivan@reuters.com, Washington night desk, 202-898-8322))