TEXAS.NET FILES FCC COMPLAINT, SAYS AOL TIME WARNER DISCRIMINATORY, VIOLATING MERGER ORDER.

Business Editors & High-Tech Writers

AUSTIN, Texas--(BUSINESS WIRE)--Aug. 9, 2001

Texas.Net, a privately held Texas-based Internet Service Provider ("ISP"), today filed a complaint with the Federal Communications Commission ("FCC"), alleging that AOL Time Warner and Time Warner Cable were discriminating against regional and local ISPs in favor of national ISPs, and were violating the FCC's AOL-Time Warner merger order by refusing to negotiate carriage agreements with unaffiliated, regional and local ISPs like Texas.Net for access to its cable modem system.

"The decision to officially file the complaint with the FCC came after a year of AOL Time Warner's refusal to negotiate with Texas.Net over access to its cable system and its continuous delay of any start of such negotiations," said Jonah Yokubaitis, president of Texas.Net. "A good faith and non-discriminatory order was set in place by the FCC after the commission found potential harm to ISPs unaffiliated with AOL Time Warner. AOL's national Internet access services would gain an unfair advantage over regional and local ISPs by limiting the consumer's choice in selecting an ISP to that of AOL and a selected few national ISPs, presumably chosen in an attempt to meet a minimum compliance level. Unaffiliated ISPs have been privy to service over the Time Warner Cable's cable modem system, just as ISPs do with the dial-up modem systems of Telcos. However, with Time Warner's merger with AOL, the nations' largest ISP, came a monopolistic imbalance and competitive disadvantage for the regional and local ISPs already accessing and servicing the cable modem system."

In the same year that Texas.Net has attempted negotiations with AOL Time Warner, contracts were negotiated with three national ISPs -- Earthlink, High Speed Access, and Juno. "AOL Time Warner is insuring exclusive exposure of their own Internet access service, Road Runner, and those of their national ISP partners over a cable system that has been deemed open grounds for fair competition by the FCC. We've attempted to open the negotiation processes for a year now and have continuously come back to the very point where we started. It is disturbing to see how AOL Time Warner has handled the communication line between us. The continuous and obvious delay tactics and their horrendous way of handling this potentially good business venture has been something of an eye opener. Texas.Net has successfully secured a strong footprint in the Texas commercial and consumer Internet access markets since 1994 and continues to grow at amazing rates month after month, even in this slower economy. With the combined reputations of Texas.Net and AOL Time Warner, it would only be to their advantage to not only partner with national ISPs but also with regional and local market leaders like Texas.Net that already have a strong customer-base and a historically stable market presence," said Yokubaitis.

Reinforcing Yokubaitis' concerns, W. Scott McCollough, Texas.Net's lawyer and a shareholder in the firm of Stumpf, Craddock, Massey, and Pulman, noted "When the FCC approved the AOL-Time Warner merger, the FCC noted there was a real danger that AOL Time Warner would damage competition in the high-speed Internet service market by only negotiating with large national ISPs for access to its cable system. To prevent this from happening, the FCC ordered AOL Time Warner to negotiate with local and regional ISPs in good faith. The FCC needs to act now to straighten this out before cable modem customers are deprived of choice in who serves them, and are locked into service with large national providers and local and regional ISPs are frozen out." McCollough continues, "What makes matters worse is that now AOL Time Warner is talking about taking over AT&T's cable operations. If they won't talk to us now, why would they when they control even more of the market?"

About Texas.Net

Texas.Net is the leading provider of dedicated, broadband Internet access and managed Internet infrastructure services for enterprises in the greater Texas business markets. Texas.Net offers corporate Internet solutions and managed services such as dedicated high-speed Internet access, Web hosting, collocation, outsourced e-mail, network security, and disaster recovery. Texas.Net manages a redundant network infrastructure of multiple Tier 1 backbone connections through its Network Operations Control Center located in Austin, Texas. More information on Texas.Net can be found at www.texas.net

Texas.Net is a trademark of Texas Networking Inc. All other trademarks mentioned in this document are the property of their respective owners.