WASHINGTON -- America Online has ended its lobbying push in various states for legislation requiring cable firms to share high-speed Internet lines with competitors, officials at the No. 1 online service confirmed Monday.
The move was expected after chairman Steve Case said last month that AOL no longer favored government-mandated open access to high-speed cable lines in light of its $120 billion acquisition of cable giant Time Warner.
Nationwide, the battle over open access -- which had pitted AOL, other Internet service providers, and consumer groups against the cable industry -- could write the ground rules for fast-growing cable high-speed Internet services.
Cable companies currently offer the most popular high-speed Internet services, but the companies have forced their customers to sign up with Internet service providers also owned by cable companies, like Excite AtHome. Consumers using other broadband services, or old-fashioned telephone connections, can choose from among many ISPs.
Until its Time Warner deal, AOL and most other ISPs had pushed for government rules banning the exclusive practice and requiring cable firms to allow other, unaffiliated companies to offer service.
But now, instead of favoring state or federal rules requiring open access, AOL is working with Time Warner to craft a set of voluntary principles allowing multiple Internet providers on cable systems. The principles could be announced this month.
AOL officials stressed they still favored an end to cable's exclusive Internet service deals.
"AOL is as strongly committed to open access today as we were the day before we announced our merger with Time Warner," a spokeswoman said. "We are confident that our merger with Time Warner will help quickly bring the benefits of open access to all consumers."
Such a solution would mirror the approach followed by No. 2 ISP MindSpring, which has since merged with Earthlink. The ISP signed a set of open access principles with No. 2 cable operator AT&T in December.
Paradoxically, AOL's change of heart could bolster the likelihood of legislation, according to analyst Scott Cleland of the Legg Mason Precursor Group.
"When they announced the deal, they conceptually abandon government solutions in favor of market solutions," Cleland said. "But words and deeds carry different weight.
"Long term, regulators are going to be more concerned. Now that AOL has joined the other side, what was more of a balanced market force solution is nowhere near as balanced."
Richard Bond, co-director of the OpenNet coalition that includes AOL and hundreds of other ISPs, said his lobbying group would continue pushing for legislation. AOL would continue to support the group financially even as it pursued the alternate market-based approach, he said.
"We want open access," Bond said. "We really don't care how we get it."
Consumer groups which had been allied with AOL in seeking government-mandated open access said they still expected the online giant to support the same principles.
"AOL is committed," said Andrew Schwartzman, president of nonprofit Media Access Project. "They have made the best case for why open access matters. We are prepared to remind AOL of what their highest level executives have said in public and put their names on and filed before various governmental bodies."
For example, when AT&T bought cable operator Tele-Communications Inc., and again when it proposed buying cable firm MediaOne Group, AOL filed comments with regulators seeking mandatory open access.
Shares of AOL were down 1-3/16 to 55-5/16 on the New York Stock Exchange.
