AOL Time Warner/FranchiseTransfer 00AGREEMENT RELATING TO THE CONSENT OF THE CITY
OF LA QUINTA CALIFORNIA TO THE CHANGE OF CONTROL
OF THE FRANCHISEE TO AOL TIME WARNER INC.
THIS AGREEMENT (the "Transfer Agreement") is entered into this 1-4 day of
rvi`c2000, between the CITY OF La Quinta, California (the "City"), and Summit Cable
es of Georgia, Inc. (the "Franchisee").
WHEREAS, City Council entered into a Franchise Agreement (the "Franchise") with a
subsidiary of the Transferor pursuant to the provisions of the La Quinta Municipal Code (the
"Ordinance") to operate a cable television system within the City (the "System"); and
WHEREAS, the Transferor has filed a written application to the City, (the "Application")
wherein it has requested the consent of the City to the assignment of control of the Franchise to
the Franchisee (the "Transfer"); and
WHEREAS, it is the intent of the City to approve the Transfer; and
WHEREAS, the Franchisee will remain in place and continue to hold the Franchise;
WHEREAS, the City Council of the City has reviewed the Transfer as well as all relevant
documents, Staff Reports and recommendations; and
WHEREAS, pursuant to the Ordinance, the Transfer is subject to written consent of the
City Council; and
WHEREAS, based upon the evidence presented to the City Council, it has determined
that it would be in the public interest to conditionally approve the Transfer.
NOW, THEREFORE, it is agreed by and between the parties as follows:
1. The City Council of the City hereby gives its consent and approval to the Transfer
as described herein.
2. The granting of this consent to the Transfer does not render or waive the right of
the City to approve any subsequent change in the ownership of the Franchise or the ownership or
legal or operating control of the Franchisee where required by the Ordinance and there shall be
no further material change, amendment, or modification of the ownership or equity composition
of the Franchisee which requires advance consent of the City pursuant to the Ordinance without
further written consent of the City Council.
3. By executing this Transfer Agreement, the Franchisee agrees and acknowledges
that (1) this Transfer Agreement and the approving resolution is not a new franchise agreement,
the granting of a franchise, or the renewal of the existing franchise, but rather is exclusively an
agreement to transfer control of the Franchisee and said Transfer Agreement neither affects nor
prejudices in any way the City's or Franchisee's rights under the Franchise; (2) under Section 625
of the Cable Act, the term "commercially impracticable" means, with respect to a cable operator,
that it is commercially impracticable for the operator to comply with such requirement as a result
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of a change in conditions which is beyond the control of the operator and the nonoccurrence of
which was a basic assumption on which the requirement was based. Franchisee agrees that in
judging whether particular obligations are commercially impracticable, the parties will not
consider the economic burden of debt service and equity requirements, if any, incurred directly
or indirectly to fund the Transfer to the extent such debt service and equity exceeds the debt
service and equity requirements of the Transferor as they existed prior to the Transfer.
4. By executing this Transfer Agreement, the Franchisee hereby agrees that it
remains subject to any and all existing obligations between the City and Franchisee including,
but not limited to, the Franchise, any Transfer Agreements and any Franchise Extension
Agreements, any lawful orders or directives of any administrative agency relating to the
Franchise or the System including, but not limited to, the Federal Communications Commission
(the "Commission") and this Transfer Agreement (collectively, the "Franchise Documents") and
Franchisee represents and warrants that it has examined the requirements of the Franchise
Documents as well as the applicable federal, state, or local laws or regulations, and agrees to
abide by all the terms and conditions thereof.
Franchisee agrees and acknowledges that neither the Transfer nor the City's approval
thereof shall in any respect relieve Franchisee, or any of its successors -in -interest of the
responsibility for past acts or omissions, known or unknown, or for any obligations or liabilities
pursuant to the Franchise Documents.
The Franchisee agrees and acknowledges that it finds the Franchise Documents specified
herein to be legally sufficient, enforceable, valid, and binding and accepts the same without
condition or reservation. Franchisee shall continue to be responsible for all rate refund
obligations and possessory interest tax refund liability, if any, both actual and contingent.
Franchisee agrees to cooperate and furnish relevant information in relation to any audit and/or
investigation relative to any audit and/or investigation relative to breaches and/or defaults
accruing subsequent to the Transfer.
To the extent that the Franchisee or any related person or entity, challenges the validity or
interpretation of the Franchise Documents in the future in any administrative proceeding or court
of law, such a challenge shall be subject to all defenses which would have been available to the
City had the Transfer not occurred, including, but not limited to, waiver, estoppel, consent,
unclean hands and accord and satisfaction, as well as any and all defenses independently
available to the Franchisee.
5. On or before the Effective Date, the Transferor, or its designee, shall pay to the
City up to the sum of Five Thousand Dollars ($5,000), as invoiced by the City, which amount is
paid in, and only in, complete satisfaction and reimbursement of all third -party costs incurred by
the City in relation to the Transfer (the "Payment"). In regard to said Payment, the parties
expressly agree and covenant as follows:
A. The Payment is within the exclusions from the term "franchise fee" set
forth in Section 622(g)(2) of the Cable Act (47 U.S.C. §542(g)(2); and
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B. The Payment shall not be deemed to be in the nature of a tax, and shall be
in addition to any and all taxes of general applicability or other fees or charges which the
Franchisee shall be required to pay to the City or to any state or federal agency or authority; and
C. The Franchisee shall not have or make any claim or any deduction or other
credit of all or any part of the amount of the Payment to be made pursuant to the franchise from
or against any City or other governmental taxes of general applicability (including any such tax,
fee, or assessment imposed on both utilities and cable operators or their services but not
including a tax, fee, or assessment which is duly discriminatory against cable operators or cable
subscribers or income taxes) or other fees or charges which the Franchisee is required to pay to
the City or other governmental agency; and
D. The Franchisee shall not apply or seek to apply all or any part of the
amount of the Payment to be made pursuant to this Transfer Agreement as a deduction or other
credit from or against any City or other government taxes of general applicability (other than
income taxes) or other fees or charges; and
E. The Franchisee shall not apply or seek to apply all or any part of the
amount of any City or other government taxes or other fees or charges of general applicability
(including any such tax, fee, or assessment imposed on both utilities and cable operators or their
services) as a deduction or other credit from or against the Payment to be made pursuant to this
Transfer Agreement; and
6. In regard to the Payment made to the City pursuant to this Transfer Agreement,
the Franchisee, or any affiliate party shall not pass through, externalize, or otherwise attempt to
add the costs of the Payment pursuant to Paragraph 5 hereof to any regulated rate.
7. Franchisee represents that the letter of credit, insurance and bonding required by
the Franchise Documents have been obtained, and that there will be no gaps in required
coverages or liabilities. Franchisee will continue to maintain the letter of credit and bonds that it
was required to maintain under the Franchise notwithstanding the Transfer.
8. Franchisee represents and warrants that the Transfer complies with and is not in
violation of any applicable federal, state, or local law, statute, and/or regulation. Franchisee
agrees to defend, indemnify and hold the City harmless against any loss, claim, costs, damage,
liability or expense (including, without limitation, reasonable attorney's fees) arising out of this
Transfer Agreement and/or incurred as a result of (i) any representation or warranty made by
Franchisee herein or in the Application or in connection with the City's review of the Transfer
which proves to be untrue or inaccurate in any material respect or (ii) any violation of any
federal, state or La Quinta law, statute and/or regulation relative to Franchisee's ownership or
control of the Franchise or the System. In the event the City receives any such notice of a loss,
claim, damage, liability or expense, the City shall promptly notify Franchisee which shall assume
sole and direct responsibility for defending against any such loss, claim, damage, liability or
expense.
9. This consent is not an affirmation that Franchisee is currently in compliance with
the Franchise. Any consent given by the City in this Transfer Agreement and any resolution
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approving this Transfer Agreement is not a finding that, after the Transfer, Franchisee will be
financially, technically or legally qualified, and no inference will be drawn, positively or
negatively, as a result of the absence of a finding on this issue. Any consent is made without
prejudice to, or waiver of, the City's right to fully investigate and consider Franchisee's financial,
technical and legal qualifications and any other relevant considerations during any proceeding
including by way of example and not limitation, any future transfer or renewal proceeding.
Without limiting the foregoing, any approval of the Transfer is not a finding or representation
that the Franchise will be renewed or extended (and approval shall not create an obligation to
renew or extend the Franchise); that Franchisee is "financially, technically or legally" qualified
to hold a franchise; or that any other renewal issue that may arise with respect to past
performance or future cable -related needs and interests will be resolved in a manner favorable to
Franchisee. Unless provided for within this Transfer Agreement, nothing in this Transfer
Agreement shall constitute a waiver of any of Franchisee's, or City's rights or remedies under
federal, state or local law.
10. Franchisee expressly agrees that any litigation arising from or relating to the
Franchise Documents shall be filed and litigated exclusively in the Superior Court, County of
Riverside, State of California or, if jurisdictional requirements are otherwise met, the Federal
District Court for the Central District, California. Franchisee hereby accepts service of process
by way of service upon the General Manager of the local office of the Franchisee.
11. Any violation of this Transfer Agreement or any of the terms contained in the
Franchise Documents shall be deemed to be a violation of the Franchise and the Ordinance.
12. Franchisee will provide interactive high speed cable modem services to buildings
owned or controlled by the City at most favorable commercial or governmental rate offered
anywhere in the same operating division by the Franchisee or any Affiliate thereof.
13. Reservation of Rights Relating to Non -Discriminatory Access to Cable
Distribution System.
A. The City reserves the right to impose a requirement that Franchisee
provide nondiscriminatory access to the cable modem platform of the system to providers of
internet access services, whether or not such providers are affiliated with Franchisee, under
either of the following conditions:
(i) If, by final order or judgment, a court of competent jurisdiction
rendering a judgment enforceable in California upholds or affirms the authority of any local
government to require a cable operator to provide nondiscriminatory access to its cable modem
platform of the system to providers of internet access services and the City otherwise meets the
legal and procedural prerequisites for the imposition of an internet access requirement. For the
purposes of this section, an order or judgment shall be considered final when a court of
competent jurisdiction renders, lets stand or affirms such order or judgment, and the time period
in which to challenge such order or judgment has passed without a challenge. Prior to the
enactment or enforcement of any such requirement, Franchisee shall be provided with reasonable
notice and an opportunity to be heard, including the right to present evidence on any findings
made or required to be made by the City, or
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(ii) In the event the City has the authority to regulate cable modem
service as a cable service and Franchisee enters into an agreement with any other franchising
authority in the Los Angeles, San Diego and/or Desert Cities Division, on a non -trial or
commercial basis, that requires nondiscriminatory access to its cable modem platform of the
system for providers of internet services unaffiliated with the Franchisee, provided that any
requirement by the City in such instance would be subject to equivalent terms and conditions.
Provided, however, that (1) any requirement imposed pursuant to subparagraphs 13(a)(i)
and 13(a)(ii) would be subject to equivalent terms and conditions, and (2) prior to the enactment
of any such requirement pursuant to Subparagraphs 13(a)(i) and 13(a)(ii) above by the City, the
City agrees that Franchisee shall be given reasonable notice and an opportunity to be heard
including the right to present evidence on any findings made by the City with respect to the
imposition of such a requirement. If following such a hearing the City decides to require such a
non-discriminatory access provision, Franchisee agrees to modify the Franchise to incorporate
such nondiscriminatory access provisions into the Franchise consistent with the terms of such
judicial decision or other agreement so long as such a provision is technically feasible within the
present cable system. Nothing contained herein shall be deemed a waiver of the Franchisee's
rights to appeal a decision of the City to impose such a condition.
B. Franchisee agrees to comply with all lawful federal, state, and local
requirements with respect to nondiscriminatory access to Franchisee's cable distribution system
for providers of Internet access service. The City approval of the transfer shall not be deemed to
be a waiver of any such rights it may have to impose any requirement relating to
nondiscriminatory access, as herein above provided, at a later date regardless of whether a
transfer or renewal is pending. Except as expressly provided herein, Franchisee, likewise, does
not waive any right it may have with respect to the imposition of such a condition.
C. Transferor and America Online, Inc. ("AOL") represent and warrant they
have entered into and executed a Memorandum of Understanding dated February 29, 2000,
regarding Open Access Business Practices (the "MOU"), a copy of which is attached hereto as
Attachment B. The City is granting its consent to the transfer of control of the Franchise in
reliance on the intentions of the Transferor and Franchisee to diligently implement, or cause to
be implemented, the principles expressed in and underlying the MOU.
14. Franchisee represents and warrants that the Transfer will not be utilized in any
regulatory forum or context to justify, in whole or part, any increases, or to void any decreases,
in any regulated rate. Nothing herein shall prohibit Franchisee from increasing subscriber rates
in an otherwise lawful manner for reasons unrelated to the Transfer.
15. The definition of "Gross Annual Receipts" or "Gross Receipts" as found in the
Franchise and/or the Ordinance is hereby amended to read as follows:
"Gross Annual Receipts" or "Gross Receipts" means all revenue,
as determined in accordance with Generally Accepted Accounting
Principles, which is received, directly or indirectly, by Grantee and
by each Affiliated Person from or in connection with the
distribution of any Cable Service in the City, and any other Service
124/015610-0004
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which may, under now or then applicable federal law, be included
in the definition of Cable Service for the purpose of calculating
and collecting the maximum allowable franchise fee for operation
of the System, including, without limitation, leased or access
channel revenues, advertising revenues, cable modem revenues to
the extent they are Cable Services, revenues paid by programmers
to the Grantee or any affiliated person for or relating to carriage of
any programming service which are not contractually required for
expenditure or reimbursement of marketing or other expenses
relating to the channel carriage, lease or rental payments from a
user, affiliated or non-affiliated, of the Cable System which
provides a service which is not independently subject to a franchise
fee, with the distribution of Cable Service on the Cable System. It
is intended that all revenue collected by the Grantee, and by each
Affiliated Person, from the provision of Cable Service over the
System to the extent that such revenue is derived through any
means that has the effect of avoiding the payment of fees payable
under the Franchise Agreement be included in this definition.
Gross Annual Receipts also specifically includes: (i) all revenues
paid by Subscribers for any Cable Service which are paid by
Subscribers for any Cable Service which are paid to the Grantee,
any Affiliate, or any party in contractual privity with the Grantee
or any Affiliate thereof; (2) any bad debts recovered; (iii) a pro rata
portion (based on the number of subscribers residing in the City) of
all advertising revenue which is received directly by Grantee or
any affiliated person under common control with the Grantee, from
or in connection with the distribution of any Service over the
System in the City or the provision of any Service -related activity
in connection with the System in the City. Gross Annual Receipts
shall be calculated at proportional discounts associated with the
bundling or packaging of Cable Services with non -cable services.
Notwithstanding anything to the contrary in the foregoing, Gross
Annual Receipts does not include: (i) the revenue of any Person to
the extent that said revenue is also included in the Gross Annual
Receipts of Grantee; (ii) taxes imposed by law on Subscribers
which Grantee is obligated to collect; (iii) any other revenue which
must be excluded pursuant to applicable law.
16. Franchisee shall cause the Transferee to execute and deliver the Estoppel
Certificate attached as Exhibit A hereto.
17. Franchisee acknowledges that the City's consent to the Transfer is DENIED
unless the conditions set forth herein are satisfied. To this end, the Franchisee agrees that if any
condition is challenged in federal, state or local court or agency proceedings, directly or
indirectly, by claim or defense, on any ground, by or at the behest of the Franchisee, or any
affiliate, then the City's consent shall be of no force or effect, and only the introductory recitals
124/015610-0004
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and the denial of consent to the Transfer shall survive, and shall be effective as if such clauses
were the only clauses adopted.
18. The City hereby gives notice that the Grant or Transfer of the Franchise may
create a taxable possessory interest upon which the Transferee may be liable for the payment of
certain property taxes. The Franchisee hereby acknowledges that it has received actual notice as
provided by Revenue and Taxation Code Section 107.6.
19. This Transfer Agreement shall be deemed effective upon the closing of the
Transfer (the "Effective Date").
20. The parties expressly agree and acknowledge that Paragraph 5 of the 1996
Transfer Agreement, and the terms and conditions thereof, are applicable and binding upon the
Transferee in relation to this Transfer for the period from the Effective Date of this Transfer.
21. Guarantor hereby guarantees all of the obligations of the Franchise Documents as
a joint and several primary liable party. Guarantor hereby waives any obligation which the City
might possess to exhaust its remedies against the Transferee as a condition of enforcing
obligations against the Guarantor pursuant to the Franchise Documents.
22. This Transfer Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument. The parties
agree that this Transfer Agreement will be considered signed when the signature of a party if
delivered by facsimile transmission. Such facsimile signature shall be treated in all respects as
having the same effect as an original signature.
[SIGNATURE BLOCK NEXT PAGE]
124/015610-0004
101784.02 PM00 -7-
CITY OF LA QUINTA, CALIFORNIA
(the "City")
st���
By
Its
ATTEST:
Cit er
APPROVED:
RUTAN & TUCKER, LLP
By Z��
,�,
William M. Mart 'c rena
Special Counsel
* Summit Cable Services of Georgia, Inc.
(the "Franchisee")
By Bonnie Blecha
Its vice President
TWI Cable, Inc. (the "Guarantor")
By David O'Hayre
Its ice President
* Now known as TWI Summit Cable, Inc.
124/015610-0004
101784.02 PM00 'g-
EXHIBIT A
ESTOPPEL CERTIFICATE OF AOL TIME WARNER INC.
This Estoppel Certificate is hereby executed and delivered by AOL Time Warner Inc.
("AOLTWI") as material inducement and consideration to the City of La Quinta, California (the
"City") for its approval and execution of that agreement entitled "Agreement Relating to the
Consent of the City of La Quinta, California to the Change of Control of the Franchisee to AOL
Time Warner, Inc." (the "Transfer Agreement"). AOLTWI hereby acknowledges that the City
has relied, in part, upon the execution and delivery of this Estoppel Certificate by AOLTWI in
approving and executing the Transfer Agreement.
AOLTWI represents and warrants as follows:
(1) AOLTWI has carefully reviewed the Transfer Agreement and is frilly aware of the
contents thereof.
(2) AOLTWI acknowledges that it is the ultimate parent of the Franchisee, as defined
in the Transfer Agreement.
(3) AOLTWI shall take no action or inaction on its own behalf or on the behalf of the
Franchisee which would cause, directly or indirectly, the Franchisee to breach or otherwise fail
to perform its obligations as set forth in the Transfer Agreement; provided, however, nothing
herein shall be construed as a guarantee by AOLTWI of the obligations of the Transfer
Agreement and/or the Franchise.
dA
Executed thisAay of k4 W 2000.
AOL Time Warner Inc.,
By LCi' uJ env i'� I Zt .
Its: Thomas W. McEnerney
Vice PiWdent
124/015610-0004
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MEMORANDUM OF UNDERSTANDING
Between
Time Warner Inc_
And
America Online, Inc.
REGARDING OPEN ACCESS BUSINESS PRACTICES
February 29. 2000
1 This Memorandum of Understanding ("MOU") sets out the
commitments that AOL Time Warner will make to provide open
access (i e , to make a choice of multiple Internet Service Providers
("ISPs") avaiiame to consumers) on its broadband cable systems. it
is the intention of the parties to enter into as quickly as possible a
binding definitive agreement to provide broadband AOL service on
Time Warner's cable systems, which will be used as a model for the
commercial agreements that will be available to other ISPs
2. AO!_ Time Wainer is committed to offer consumers a choice
among multiple ISPs Consumers will not be required to purchase
service from an ISP that is affiliated with AOL Time Warner in order
to enjoy broadband Internet service over AOL Time Warner cable
systems AOL Time Wainer intends to encourage actively other
cable operators similarly to provide consumers with a choice of
broadband ISP offerings.
3 AOL Time Warner will effectuate such choice for consumers by
negotiating arms -Length commercial agreements with both affiliated
(such as AOL) and unaffiliated ISPs that wish to offer service on the
AOL Time Warner broadband cable systems. Pursuant to such
commercial agreements, AOL Time Warner wilt partner with ISPs to
offer consumers a choice of competing broadband Internet service
offerings
4. AOL Time Warner will not place any fixed limit on the number of
ISPs with which it will enter into commercial arrangements to provide
broadband service to consumers AOL Time Warner will provide its
consumers with a broad choice among ISPs, consistent with
providing a quality consumer experience and any technological
limitations in providing multiple ISPs on its broadband cable systems.
5. The terms of the commercial agreements between AOL Time
Warner and ISPs wisning to provide broadband service will not
discriminate on the basis of whether the ISP is affiliated with AOL
Time Warner Thus, while the economic arrangements reached by
AOL Time Warner and ISPs wishing to provide broadband service
will vary depending on a number of factors (such as the speed,
marketing commitments, and nature and tier of the service desired to
be offered). AOL Time Warner will not discriminate in those
economic arrangements based upon whetner or not the ISP is
affiliatSO with AOL Time Wainer. In addition, AOL Time Warner will
operate its broadband cable systems in a manner that does not
discriminate among ISP traffic based on affiliation with AOL Time
Warner.
6 AOL Time Warner will allow ISPs to provide video streaming. AOL
Time Warner recognizes that some consumers desire video
streaming, and AOL Time Warner will not blocK or limit it
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T AOL Time Wainer will allow ISPs to connect to its broadband
cable systems without purchasing oroadband backbone transport
from AOL Time Warner.
8 Consistent with technological capability, AOL Time Warner will
offer ISPs the choice to partner with it to offer broadband Internet
service on a national (on all AOL. Time. Warner cable systems),
regional or local basis, in order to facilitate file ability of consumers to
choose among ISPs of different size and scope. AOL Time Warner is
committed to bring the benefits of the Internet to all Americans, and
will not allow ISPs to offer "redlined" service to only a portion of an
AOL Time Warner cable system that is fully enabled to provide
broadband service.
9. AOL Time Warner is also committed to avow both the cable
operator and the ISP to have me opportunity to nave a direct
relationship with me consumer. Accordingly, posh the cable operator
and the ISP will be allowed to market and sell broadband service
directly to customers. When AOL Time Warner's cable systems sell
broadband Internet service to a customer, they will be entirely
responsible for billing and collection When an ISP sells broadband
Internet service airecay to a customer, it may, if it so chooses, bill
and collect from me customer directly
10. This MOu represents an initial step by Time Warner and AOL to
articulate the terms, conditions and parameters under which a
combined AOL Time Warner will offer consumers access to multiple
ISPs on its broadband cable systems It is the intention of the parties
to continue to refine those particulars to a manner that is responsive
to, and consistent with, the desire of consumers to have a choice
among multiple ISPs offering broadband service and me still -evolving
nature of me cable infrastructure.
11. All of the foregoing ,s Subject to all pre-existing obligations of
Time Warner, including without limitation Time Warner's agreements
with Serviceco, LLC (cvo/a Road Runner) and its fiduciary and other
obligations to its partners However, Time Warner will endeavor to
reach agreements and accommodations with third parties to which
pre-existing obligations are due that would permit the full
implementation of the commitments described herein as quickly as
possible.
Stephen M. Case Gerald M_ Levin
America Online, Inc_ Time wanner Inc.
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Time Warmr inc.
Tame Wainer Inc
Overview
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TIME WARNER INC.
RELEASES / NEWS
AMERICA ONLINE AND TIME f
WARNER ANNOUNCE FRAMEWORK
FOR AGREEMENTS TO OFFER AOL
SERVICE AND OTHER ISPS ON TIME
WARNER BROADBAND CABLE SYSTEMS
Feb 29, 2000
Memorandum of Understanding between AOL and Time Warner
Outlines Open Access Business Practices
DULLES, VA and NEW YORK, NY —America Online, Inc, the
world's leading interactive services company, and Time Warner Inc.,
the world's leading media company, today announced that they have
signed a Memorandum of understanding setting out the framework
under which Time Warner will offer consumers a choice of multiple
ISPs, including AOL, on Time Warner's broadband cal,le systems.
That MOU, which is expected to lead to a pending commitment
between the companies. will also serve as the framework for
agreements by which other ISPs will be available to consumers over
Time Warner Cable.
Today's announcement represents a first step by the two companies
to provide more detail on how as a combined company they will put
"Open access" into affect on their broadband cable systems and
deliver consumer choice in Internet service providers.
Steve Case, Chairman and Chief Executive Officer of America
Online, Inc., said: "I am very pleases that we have been able to make
this significant step forward today toward making open access a
reality for consumers in the marketplace. It is exactly what we believe
our two companies can achieve when we work together. providing
new choices for consumers and value in the marketplace -
"Choice, competition and innovation have been the factors driving the
Interners explosive growth to date Now, with this framework, we are
poised to make it easier, more attractive and more affordable than
ever for consumers to sign up for high-speed, always -on Internet
service, with all of the benefits that has to offer-"
Gerald Levin, Chairman and Chief Executive Officer of Time Warner,
said- "We know Time Warner consumers want choice and innovation
in cable Internet service, and we are going to deliver it to
them --access to AOL as well as to a variety of other ISPs.
1 look forward to the rest of the cable industry following this same
path of choice and innovation. which I believe will greatly accelerate
consumer adoption of cable broadband services Today's
announcement is another step forward in delivering on the promise
of the interactive medium and helping make broadband access a
reality for every consumer "
1 ors
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--
Joe Collins. Chairman and Chief Executive Officer of Time Warner
Cable. said: "At Time Wainer Cable, we are committed to delivering
Me services consumers want. Our subscribers want a first-class
array of choices, and we 100K forward to working with AOL and other
ISPs to deliver that to tnem."
Key elements of the MOU incluae commitments to.
• Offer Consumers Choices AM Time Wamer is committed to
offer consumers a choice among ISPs. Consumers will not be
required to purchase service from an ISP that is affiliated with
AOL Time Warner in order to enjoy broadband Internet
service over AOL Time Wamer cable systems.
Diversity of ISPs' AOI_ Time Wamer will not place any fixed
limit on the number of ISPs with which it will enter into
commercial arrangements and it will offer those ISPs the
choice to partner on a national (on all AOL Time Wamer cable
systems), regional or local basis, in order to facilitate the
ability of consumers to choose among ISPs of different size
and scope.
Direct Relationship with the Customer for ISPs: A01- Time
Wamer is also committed to allow both the cable operator and
the ISP to have the opportunity to have a direct relationship
with the consumer Accordingly, both the cable operator and
the ISP will be allowed to market and sell broadband service
directly to customers When an ISP sells broadband Internet
service directly to a customer, it may, if it so chooses, bill and
collect from the customer directly.
• Video Streaming AOL Time Warner will allow ISPs to provide
video streaming AOL Time Warner recognizes that some
consumers desire video streaming, and AOL Time Warner will
not block or limit it.
While today's MOu is subject to existing Time Warner obligations,
such as its contracts with Road Runner, Time Warner also said it is
committed to providing a choice of ISPs as quickly as possible, and
will work with Its partners to try to achieve that goal even before its
current obligations expire.
The AOL Time Wamer Memorandum of understanding on open
access is attached
About America Online, Inc.
Founded in 1985, America Online, Inc., based in Dulles, Va . is the
world's leader in interactive services, Web brands, Internet
technologies, and e-commerce services. America Online, Inc.
operates two worldwide Internet services, America Online, with more
than 21 million members, and CompuServe, with more than 2.5
million members, several leading Intemet brands including ICQ, AOL
Instant Messenger and Digital City. Inc.; the Netscape Netcenter and
AOL COM portals; the Netscape Navigator and Communicator
browsers; AOL MovieFone, the nation's 0 1 movie listing guide and
ticketing service,
Spinner NetworKs and NutlSoft, Inc., leaders in Internet music, and
Digital Marketing Services, a company specializing in online rewards
programs and online market research. Through its strategic alliance
with Sun Microsystems, the company develops and offers
.,
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Ieasy -to -deploy, end -to -end e-commerce and enterprise solutions for
companies operating in the Net Economy_
About Time Warner Inc.
Time Wamer Inc (NYSE: TWX, www.timewarner.com) is the worlds
leading media company. its businesses Include cable networks,
publishing, music, filmed entertainment, cable and digital media.
America Online
Contact Name: Kathy McKiernan
Contact Phone:(703) 265-1746
Time Warner Inc
Contact Name: Edward Adler
Contact Phone:(212) 484-6630
Contact Name: Scott Miller
Contact Phone:(212) 484-8736
Time Warner Cable
Contact Name: Mike l_uftrnan
Contact Phone:(203) 328-0613
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Caution Concerning Forward -.00long Statements This press release and its
attachment include certain °torward-looking statements' wimin the meaning of file
Private Securities Litigation Reform Act of 1995. These statements are basea on
managemenrs current expectations and are naturally subject to uncertainty and
changes in circumstances Actual results may vary materially from the expectations
eontaine4 herein The forward -looking statements herein include statements about the
proposed Time Warner/America Online transaction Trio following factors, among
omers, could cause actual results to differ materially from those 4eseribed nerein
failure of the Time Warner or America Online stocknoweirs to approve the merger, the
risk that trio Time Warner and America Online pusineases will not to integrated
successfully, me wsrs related to the merger, inability to obtain. or meet Conditions
imposed for, governmental approvals for the merger of America Online and Time
Warner; and other economic, business, competitive andior regulatory factors affecting
America Online's and Time warner's businesses generally More detailed information
about those factors is set form in filings by AOL Time Warner, Amanca Online and
Time Warner with me Securities and F-xcnange Commission, including the most recent
quarterly iepon on Form 10-0 and current reports on Form 8-K. None of AOL Time
Warner, America Online or Time Wamer .s under any obligation to (and expressly
disclaims any sucn obligation 10) Upoate or after its forward -looking statements
wnetner as a result of new information. future events or otherwise
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AOL Time warner Inc_, togetrier with Time Warner Inc and America Online, inc., feed
with the Securities am Exchange Commission a preliminary joint proxy starement/
prospectus regarding the proposed business combination transaction referenced in the
foregoing information In audition, AOL Time Warner, Time Warner and America
Online will prepare and fAe with me Commission a definitive joint proxy statement/
prospectus ana other documents regarding ine proposed transaction. Investors and
security holders are urged to read trio definitive joint proxy statememprospectus, when
it becomes available, pecause it mil contain important information. Tne definitive joint
proxy mternenuprospectus will be sent to stocknomem of Time Warner ana America
Online seeMng their approval oftne proposed transaction. investors and security
noiders may obtain a freer copy of the definitive joint proxy statamemprospacws (when
it is available) ano other dowments file4 with the Commission by AOL Time Warner
(as well as by America Online and Time Warner) at the Commission's wee site at
www.56c,gov The definitive joint proxy statement/prospectus and these other
documents may also be obtained for free by Amanda Online stocKholders by directing
a request to America Online, Incl. 22000 AOL Way, Dulles, VA 20166. Attention
Investor Relations. toispnone_ (7031265.2741. e-mail. AOL IR @aoi cam, and by Time
warner stockttaldars by directing a request to Time Warner Inc, 75 Rockefelier Plaza,
New York, NY 10019. Aurition- Snarehower Relations, telephone. (212) 484-6971,
e-mail investrequestQtm corn
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