This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Update: Time Warner, Juno in Internet Access Deal

Updated from 10:48 a.m. EDT

Time Warner (TWX - Get Report) said Monday that it reached a deal to allow Juno Online Services (JWEB) to offer high-speed Internet access over its cable network.

The deal comes as Time Warner faces pressure from regulators scrutinizing its merger plans with America Online (AOL) to open its cable network to Internet service providers.

The deal is the first between New York-based Time Warner and an ISP not affiliated with the media company. It will allow Juno to offer Internet access and content to Time Warner Cable customers. Juno will offer its existing dial-up customers in Time Warner Cable's service area the ability to upgrade to Juno's high-speed service, Juno Express.

Juno and Time Warner will conduct a trial in Columbus, Ohio, before announcing when the new service will be available.

"Juno is committed to being a leader in the area of high-speed Internet access, and this relationship is a major step in our plan to offer subscribers nationwide a wide range of options," said Charles Ardai, Juno's president and chief executive officer, in a statement. "We believe this relationship with Time Warner will allow us to offer an attractive new option for Juno subscribers who are ready to make the move to broadband."

Under the agreement, both New York-based Juno and Time Warner Cable will market Juno Express to their customers and are able to price and package the service independently.

The deal is the first between a cable company and an Internet service provider, cooperation made possible by the pending AOL-Time Warner deal, said Frederick Moran, an analyst at Jefferies & Co. who covers both Time Warner and Juno. For the deal to meet regulatory muster, it is widely acknowledged that Time Warner will have to open its cable network to independent Internet service providers. At a Federal Communications Commission hearing on Thursday, regulators questioned AOL and Time Warner executives about opening up their cable network to ISPs.

"Regulators on the AOL-Time Warner deal will look at a number of issues," Moran said. "This is a step in the right direction of promoting competition. It has to catch regulators' eyes."

In a statement, Glenn Britt, president of Time Warner Cable, alluded to the competitive concerns of regulators. "This groundbreaking agreement underscores Time Warner Cable's commitment to offer its cable customers a choice of Internet Service Providers and will help expand the number of high-speed data subscribers on our cable systems," he said.

"We look forward to reaching agreements with other ISPs as quickly as possible and to offering our customers a broadening array of choices in how they experience the Internet."

Moran said Time Warner will likely re-examine the terms of its Internet joint venture with AT&T (T), called Road Runner.

The deal is seen as a test case for cooperation between the two industries -- cable and ISPs, he said. "Historically, cable has maintained exclusive access," he said. "Now they've become much more amenable to cooperation." Moran has a buy on Time Warner and a hold on Juno, partly because of the difficulty Internet companies have accessing capital in the current market climate. His firm has acted as an underwriter for Juno.

Time Warner has over 12.6 million cable customers, with 11.5 million homes capable of receiving high-speed Internet service. Juno has about 3 million active subscribers, making it the third-largest Internet service provider, after AOL and EarthLink (ELNK).

Juno stock soared on the news, finishing Monday's trading session up 1 1/16, or 13%, at 9 1/16. Time Warner shares closed up 1 5/16, or 2%, to 76 11/16.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
TWX $85.11 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs