Earthlink: Ensuring Customer Choice in Cable Internet Service
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Earthlink: Ensuring Customer Choice in Cable Internet Service

As part of its effort to offer Internet users high-speed access over multiple platforms, EarthLink was attempting to negotiate a deal to offer its services over the high-speed lines of various cable companies.

Paul Holmes

As part of its effort to offer Internet users high-speed Internet access over multiple platforms, EarthLink, the nation’s second largest Internet service provider (ISP), was attempting to negotiate a deal to offer its services over the high-speed Internet lines of various cable companies. After nearly two years of effort, the company, along with the rest of the ISP industry, had not achieved any significant agreements.  To assist EarthLink, Ogilvy Public Relations Worldwide, in conjunction with Alexander Ogilvy Public Relations, developed a media relations program surrounding the approval of the America Online-Time Warner merger. This campaign sought to raise awareness among regulators at the Federal Trade Commission (FTC) and in the popular and trade media of the potential anticompetitive effects of the merger.  Using that knowledge as a lever, the campaign supported EarthLink’s efforts to negotiate the first ever agreement that allowed consumers to choose from among multiple ISPs over the cable platform and positioned the company as the leading alternative to America Online for Internet access.
 
CHALLENGES
 
In January 2000, America Online, the nation’s largest ISP, agreed to merge with Time Warner, the nation’s largest media company.  Although there initially appeared to be little overlap between the two companies, there was one issue that raised concern for policymakers.  Prior to the merger announcement, America Online, along with other ISPs such as EarthLink and GTE, had fought for open access, defined as the ability of ISPs not owned by a cable company to offer service to cable Internet customers.  Time Warner, along with the rest of the cable industry, was on the other side of the debate.  Although the two companies promised to eventually open their lines to competition, this pledge was non-binding and EarthLink’s efforts to negotiate access to Time Warner’s system were going nowhere because the terms and conditions Time Warner was offering were not economically viable for EarthLink.  In the last days of September 2000, EarthLink turned to Ogilvy Public Relations Worldwide/Washington office to assist it in using the FTC’s approval of the merger as a way to pressure Time Warner to negotiate in good faith.  As planning for the campaign began, Ogilvy PR identified the following challenges:
  • Explain the negative effects of the merger on consumers and other ISPs  to wary negotiators.
  • Reinvigorate the Washington-based media with a new angle on a story they had been covering for two years.
  • Raise EarthLink’s profile as a leading proponent of consumer choice across multiple high-speed platforms.
  • Position Dave Baker, EarthLink’s vice president, law and public policy, as a leading expert and a trusted source of information on the topic.
 

OBJECTIVES

 
  • Pressure Time Warner to open its high-speed cable Internet lines to EarthLink.
  • Raise awareness among FTC members that the terms and conditions offered by Time Warner were unreasonable.  If Time Warner did not voluntarily agree to permit other ISPs to access its cable lines, persuade the Commission to include an open access provision as a condition of the merger approval.
  • Once the deal with Time Warner was completed, position the agreement as a win for consumers and a model that regulators and other ISPs could use in negotiating additional access deals.
  • Solidify EarthLink’s position as a leading alternative to America Online in the eyes of consumers and Wall Street analysts.
 
RESEARCH
 
Media Analysis – In order to map an effective strategy that would leverage limited staff time and resources, it was essential to understand which reporters were most likely to follow the open access story and EarthLink’s efforts on a regular basis.  Without disclosing that EarthLink was preparing to go public with its complaints, Ogilvy PR conducted an informal survey of reporters who had covered the issue earlier in the year.  Based on the results of the survey, Ogilvy PR created an initial target list of reporters who we believed were mostly likely to be receptive.  The list was revised throughout the campaign.
 
EXECUTION/TACTICS
 
Phase I – September Washington Media Tour:
Once the research was complete, Ogilvy PR and EarthLink conducted a media relations campaign that began with a two-day Washington tour and would continue with follow-up meetings in person and by phone to apply pressure to Time Warner.  Ogilvy PR immediately organized media meetings for EarthLink representatives in Washington that allowed them to raise their concerns with the Washington media in advance of EarthLink’s meetings with FTC members and their staff.  The first day of the tour focused on the trade media and allowed EarthLink to set the tone of the following day’s discussions with the general interest press, FTC commissioners and staff.  By the end of the tour, stories appeared in several of the major dailies, the trade press and on the wire services.
 
To keep the story going, Ogilvy PR worked with EarthLink staff to continue to work with the media to provide information on the state of the thinking within the Commission and negotiations between EarthLink and Time Warner Cable.  By positioning Baker as a trusted source of information, Ogilvy PR helped to ensure EarthLink was regularly quoted or mentioned in the press.   Ogilvy PR and EarthLink also reached out to several other groups interested in the open access issue, such as The Walt Disney Company and the openNET Coalition, to coordinate efforts and share information.
 
Phase II – Announcing the Agreement: 
As a result of the efforts to apply pressure, EarthLink and Time Warner reached an agreement in mid-November to make EarthLink the first independent ISP to gain access to a cable system’s lines.  Ogilvy PR, in conjunction with Alexander Ogilvy, worked with EarthLink staff to position the agreement not only as a win for EarthLink but as a benchmark for which other agreements negotiated by Time Warner or other cable companies could be based.  Once the agreement was announced, Ogilvy PR and Alexander Ogilvy took the lead in reaching out to the financial and trade media and general interest publications.
 
Phase III – Promoting the Agreement:
As the agreement was being rolled-out, Ogilvy PR worked with EarthLink to develop additional message points that the company could use in explaining why the agreement benefited consumers and the company to analysts, federal regulators, allies and skeptical third parties.  Ogilvy PR continued to work with the media to make Baker available for comment and pass along information that could advance reporters’ stories.  Because the access deal was linked to approval of the merger by federal regulators, Ogilvy PR and EarthLink paid special attention to complaints emanating from smaller ISPs and reached out to the media to explain how the deal could be used by other ISPs as a model in their negotiations.  When the FTC finally approved the agreement in December, Ogilvy PR and EarthLink conducted a final media outreach effort to ensure that EarthLink’s deal with Time Warner was referenced as a key part of the merger approval and that EarthLink’s Baker was included in news articles about the deal.
 
EVALUATION
 
By any measure the 11-week campaign was a success.  The initial round of media interviews succeeded in generating significant news coverage in support of EarthLink’s efforts including immediate coverage by:  Business Week.com, Communications Daily, The Industry Standard, Interactive Week, Reuters, The Wall Street Journal, Washington Internet Daily and The Washington Post.  Outlets that provided follow-up coverage included Associated Press, Bloomberg, Atlanta Journal and Constitution, Fortune, Interactive Week, The Industry Standard, The New York Times, “The Nightly Business Report,” Reuters, USA Today, The Wall Street Journal (including mentions on three consecutive days) and The Washington Post. More importantly, the tour succeeded in getting the FTC’s and Time Warner’s attention and resulted in a softening of the company’s hard line position.  A week after EarthLink went public, The Washington Post reported, “Time Warner has shown a new willingness to talk about the terms [offered to other ISPs] after news reports last week that it was trying to exact similar conditions from EarthLink...”
 
As a result of the September meetings and subsequent follow-up, EarthLink negotiated an agreement with Time Warner that ensured that EarthLink would become the first nonaffiliated ISP to offer service over a major cable company’s lines. In addition to generating more than 200 immediate, positive hits in national regional and local broadcast print and online media, the agreement was not only frequently mentioned in news accounts but cited by analysts as one factor that set apart EarthLink from other rivals.  As Institutional Investor reported, “The new open access agreement should be beneficial to all parties, and especially to the second largest player in this field – EarthLink.”  Analysts also cited EarthLink’s views on the deal to counter criticism by opponents.  For example, Scott Cleland of the Precursor Group said, “If EarthLink is happy with the its access, the FTC is very likely to be happy with the agreement.”
 
By the time the FTC blessed the deal, EarthLink had set itself apart. Dave Baker was quoted by the Associated Press, The Atlanta Journal and Constitution, The New York Times (in two stories), Pasadena Star-News, and San Jose Mercury News. In addition, a Washington Post business section feature story on EarthLink published the day after the FTC’s approval described the company by saying, “But the deal with Time Warner makes clear that EarthLink is not just any scrappy Internet company anymore.  Its fortunes are now entwined with the very guys it was fighting against for its existence.”
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