AOL, AT&T still discussing Internet deal

America Online Inc. is in discussions with AT&T Corp.

America Online Inc. is in discussions with AT&T Corp. about the possibility of the telecommunications giant carrying AOL's service on its cable lines.

AOL, which is awaiting regulatory approval of its merger with Time Warner Inc., revealed its talks with AT&T in a response to a query from the Federal Communications Commission. The company said it is "presently engaged in preliminary discussions with AT&T to determine what the terms and structure of a viable deal might be."

The talks center around AOL's possible participation in a six-month trial wherein AT&T would offer its customers in the Boulder, Colo., market access to multiple Internet service providers over its cable lines.

Along with instant messaging, the issue of open access to cable lines has been a major focus of the FCC's review of the potential merger of AOL and Time Warner. Many service providers have expressed concern that if the merger is approved, Time Warner will offer only AOL's high-speed Internet service over its cable lines, effectively shutting out the competition.

At a hearing in July, FCC commissioners peppered executives at both AOL and Time Warner about their plans in this area. AOL CEO Steve Case and Time Warner CEO Gerald Levin both pledged that the combined company would indeed offer customers the choice of more than one ISP.

Time Warner followed through on that promise a few weeks ago when it signed Juno Online Service Inc. as the first third-party ISP on its cable lines. Until then, Time Warner had offered the Road Runner high-speed Internet service exclusively.