Time Warner to offer AOL
through Road Runner

NEW YORK >> Time Warner Inc.'s cable unit plans to start offering America Online accounts to its Internet subscribers for no extra charge, in a move intended to boost both Time Warner Cable's Internet business and AOL's advertising sales.

The new agreement suggests that, four years after AOL and Time Warner merged, the company finally is overcoming some of the cultural divisions that has plagued it. Time Warner Cable used to regard AOL as competition to its own Internet service, called Road Runner.

Time Warner Cable has been facing increasing competition from telephone companies offering less expensive high-speed Internet service using technology known as digital subscriber line, or DSL. In the past year, the growth rate of Time Warner Cable's sales has dropped by about half.

For its part, AOL has been losing subscribers the past few years as customers have been moving away from dial-up access, though some have elected to pay $14.95 a month to keep their AOL accounts for use with broadband service.

Starting this week in Raleigh, N.C., the two Time Warner units now will offer AOL customers a chance to move to Time Warner Cable while keeping their AOL accounts, without paying an additional fee.

Time Warner Cable will continue offering Road Runner to existing customers, while offering AOL to new customers. AOL will promote Time Warner Cable to its subscribers.

Under the new agreement, AOL will sell ads on the Road Runner service, which has nearly four million subscribers, and share the advertising revenue with Time Warner Cable. At the same time, Time Warner Cable will give AOL some of the subscription revenue it receives for the high-speed Internet service.

AOL's agreement with Time Warner Cable follows another big change by the online giant. AOL has lately begun offering some of its features free, breaking with its tradition of restricting access to its service to paying subscribers.

AOL hopes the change will increase its audience and then sell the audience to advertisers.