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Comcast to Open High-Speed Internet Network to Rival ISP


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By Christopher Stern
Washington Post Staff Writer
Tuesday, February 26, 2002; Page E04

Comcast Corp. plans to announce today that it has signed a deal to open its high-speed Internet network to a competing online service -- United Online Inc., the nation's third-largest Internet service provider.

California-based United will offer service under its Juno and NetZero brands, which collectively provide Web access to 5.6 million people over dial-up connections. The accord will allow the company to offer its customers high-speed access in areas where Comcast provides Internet service.

The companies did not disclose terms of the deal.

The agreement comes as Comcast seeks regulatory approval for its $72 billion merger with AT&T Corp.'s cable unit. If the merger closes, Comcast will be the nation's largest provider of cable television and broadband Internet service.

Consumer advocates are urging federal regulators to require Comcast to open its network to other ISPs as a condition for approving the merger. The Federal Trade Commission imposed such a requirement on America Online Inc. and Time Warner Inc. when they merged last year.

Regulators demanded the concession from AOL and Time Warner after competitors warned that the companies could use their partnership to discriminate against rivals that offer competing music, movies and other online content.

Comcast's agreement with United is the first of what the cable company hopes will be a series of deals with competing ISPs, possibly including AOL, MSN and EarthLink.

"Our goal is to have multiple providers," said an executive familiar with the deal. But the company still opposes any federally imposed requirement that it open its system to other providers.

Comcast plans to offer customers a choice of Internet providers in phases, beginning within 90 days in Nashville and Indianapolis. A nationwide rollout, including the Washington area, is expected to be completed by the end of the year.

Comcast's merger with AT&T Broadband, the long-distance giant's cable unit, is now being reviewed by the Justice Department's antitrust division -- a process likely to continue for at least nine months.

But according to the executive, the agreement with United is an effort to take advantage of the company's marketing savvy, not to appease regulators.

United has a total of 5.6 million active subscribers -- people who have used the service within the last 31 days. But only 1.5 million of those are paying customers, making it the ninth-largest service in paid subscribers.

NetZero and Juno are expected to focus their marketing efforts on converting existing customers to the high-speed service. Juno and NetZero customers will be able to keep their e-mail addresses and will be greeted by a Juno or NetZero Web page whenever they log on to the Internet.

Comcast is in the middle of converting its approximately 1 million Internet customers from At Home Corp.'s high-speed network. At Home, which declared bankruptcy last year, plans to turn its network off at midnight Thursday.

It is only because of the demise of At Home that Comcast is able to reach the deal with Juno. Under the terms of its agreement with At Home, Comcast made it the exclusive Internet provider on its cable systems. But because of At Home's decision to go out of business, Comcast is now free to negotiate with other ISPs. Home

© 2002 The Washington Post Company

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