Filed by AOL Time Warner Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: AOL Time Warner Inc.
Commission File No. 333-30184
AOL & Time Warner Announce Framework for Agreements to Offer AOL Service & Other
ISPs on Time Warner Broadband Cable Systems
Memorandum of Understanding Between AOL & Time Warner Outlines Open Access
Business Practices
DULLES, VA and NEW YORK, NY, Feb. 29, 2000 -- 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
cable systems. That MOU, which is expected to lead to a binding 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 effect
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 pleased 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 Internet's
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.
"I 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."
Joe Collins, Chairman and Chief Executive Officer of Time Warner Cable, said:
"At Time Warner Cable, we are committed to delivering the services consumers
want. Our subscribers want a first-class array of choices, and we look forward
to working with AOL and other ISPs to deliver that to them."
Key elements of the MOU include commitments to:
- - Offer Consumers Choice: AOL Time Warner 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 Warner cable systems.
- - Diversity of ISPs: AOL Time Warner 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
Warner 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: AOL Time Warner 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 Warner 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 Internet 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 # 1 movie listing guide and ticketing service; Spinner
Networks and NullSoft, 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 easy-to-deploy, end-to-end e-commerce and enterprise
solutions for companies operating in the Net Economy.
About Time Warner Inc.
Time Warner Inc. (NYSE: TWX, www.timewarner.com) is the world's leading media
company. Its businesses include cable networks, publishing, music, filmed
entertainment, cable and digital media.
Caution Concerning Forward-Looking Statements. This press release and its
attachment include certain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are based
on management's current expectations and are naturally subject to uncertainty
and changes in circumstances. Actual results may vary materially from the
expectations contained herein. The forward-looking statements herein include
statements about the proposed Time Warner/America Online transaction. The
following factors, among others, could cause actual results to differ materially
from those described herein: failure of the Time Warner or America Online
stockholders to approve the merger; the risk that the Time Warner and America
Online businesses will not be integrated successfully; the costs 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 and/or regulatory factors affecting America Online's and
Time Warner's businesses generally. More detailed information about those
factors is set forth in filings by AOL Time Warner, America Online and Time
Warner with the Securities and Exchange Commission, including the most recent
quarterly report on Form 10-Q and current reports on Form 8-K. None of AOL Time
Warner, America Online or Time Warner is under any obligation to (and expressly
disclaims any such obligation to) update or alter its forward-looking statements
whether as a result of new information, future events or otherwise.
* * * * * * * * * * * *
AOL Time Warner Inc., together with Time Warner Inc. and America Online, Inc.,
filed with the Securities and Exchange Commission a preliminary joint proxy
statement/ prospectus regarding the proposed business combination transaction
referenced in the foregoing information. In addition, AOL Time Warner, Time
Warner and America Online will prepare and file with the Commission a definitive
joint proxy statement/ prospectus and other documents regarding the proposed
transaction. Investors and security holders are urged to read the definitive
joint proxy statement/prospectus, when it becomes available, because it will
contain important information. The definitive joint proxy statement/prospectus
will be sent to stockholders of Time Warner and America Online seeking their
approval of the proposed transaction. Investors and security holders may obtain
a free copy of the definitive joint proxy statement/prospectus (when it is
available) and other documents filed with the Commission by AOL Time Warner (as
well as by America Online and Time Warner) at the Commission's web site at
www.sec.gov. The definitive joint proxy statement/prospectus and these other
documents may also be obtained for free by America Online stockholders by
directing a request to: America Online, Inc., 22000 AOL Way, Dulles, VA 20166,
Attention: Investor Relations, telephone: (703) 265-2741, e-mail: AOL IR
@aol.com, and by Time Warner stockholders by directing a request to Time Warner
Inc., 75 Rockefeller Plaza, New York, NY 10019, Attention: Shareholder
Relations, telephone: (212) 484-6971, e-mail: investrequest@twi.com.
Memorandum of Understanding Between Time Warner, Inc. and America Online, Inc.
Regarding Open Access Business Practices
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") available 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. AOL Time Warner 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 Warner 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
arm's-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 will 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
wishing 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 whether or not the ISP is affiliated with
AOL Time Warner. 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.
7. AOL Time Warner will allow ISPs to connect to its broadband cable systems
without purchasing broadband 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 the 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 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 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 directly to a customer, it may, if it so
chooses, bill and collect from the 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 in a manner that is responsive to, and consistent with, the
desire of consumers to have a choice among multiple ISPs offering broadband
service and the still-evolving nature of the cable infrastructure.
11. All of the foregoing is subject to all pre-existing obligations of Time
Warner, including without limitation Time Warner's agreements with
Serviceco, LLC (d/b/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.
/s/Stephen M. Case /s/Gerald M. Levin
- -------------------------- ---------------------------
Stephen M. Case Gerald M. Levin
America Online, Inc. Time Warner Inc.