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Internet service providers

EarthLink's Broadband Breakthrough: A Game-Changer for Cable Companies and Internet Users Alike

Strategic Insights

— 2 min read

As part of a deal negotiated with federal antitrust regulators, Time Warner Cable has agreed to allow EarthLink, an internet service provider (ISP), to sell high-speed internet access to the cable company's 20 million customers. This breakthrough marks a significant victory for EarthLink, which has been fighting for two years to gain access to cable companies' lines. With this agreement, EarthLink can now tap into a vast market of potential customers, estimated to reach over 20 million broadband users by the end of 2004.

Key Takeaways:

  • EarthLink will be able to sell high-speed internet access to Time Warner Cable's 20 million customers, expanding its reach to a substantial portion of the broadband market.
  • The deal marks a significant victory for EarthLink, which has been fighting for two years to gain access to cable companies' lines.
  • With this agreement, EarthLink can now tap into a vast market of potential customers, estimated to reach over 20 million broadband users by the end of 2004.
  • According to Dylan Brooks, a broadband and wireless analyst with Jupiter Research, this deal is an important acknowledgement by cable operators that they need help selling high-speed Internet service to first-time broadband customers.
  • EarthLink and MindSpring, its merger partner in February, were built on the idea of creating a positive, hassle-free experience for Internet users.
  • EarthLink Chief Executive Officer Garry Betty says that broadband users are significantly different from dial-up users and that EarthLink hopes to capture customers and revenue from the "always on" high-speed customer.
  • The deal with Time Warner increases the number of broadband-ready homes EarthLink can sell its services to, helping the company shift its focus from dial-up subscribers to capturing the high-speed customer.
  • Jupiter's Brooks says that competing ISPs on cable-modem lines could increase loyalty to the cable modem and make it easier for users to switch service providers.
  • According to Frank Gristina, a Robinson Humphrey analyst, EarthLink has a good chance at attracting Time Warner cable-modem subscribers due to its brand recognition and customer service.
  • The deal guarantees that EarthLink service will roll out to subscribers at the same time as "house brand" AOL, without preferential treatment for AOL.

Statistics:

  • 20 million: Potential broadband users in Time Warner Cable's customer base
  • 139,000: High-speed broadband subscribers among EarthLink's 4.8 million subscribers
  • 30,000: Cable-modem subscribers among EarthLink's 4.8 million subscribers
  • 20 million: Projected broadband users by the end of 2004
  • 3.5 million: Projected broadband users in 2000
  • 12.6 million: Projected broadband users in 2004

Sources:

  • Brooks, Dylan. Analyst, Jupiter Research.
  • Gristina, Frank. Analyst, Robinson Humphrey.
  • Goldman Sachs. Written analysis of the open-access debate.
  • Humphrey, Robinson. Analyst.
  • Oxford, Troy. Staff.
  • Time Warner Cable. Agreement with EarthLink.
  • Yankee Group. Projected broadband growth.
  • Betty, Garry. EarthLink Chief Executive Officer.
  • McQuary, Michael. EarthLink President.

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