http://www.washingtonpost.com/ac2/wp-dyn/A...anguage=printer
AOL Subscribers Down by 846,000
Questions on Deal Delay Cable Spinoff; Parent Company's Earnings Still Rise
By David A. Vise
Washington Post Staff Writer
Thursday, July 24, 2003; Page E01
America Online's subscriber base plunged by 846,000 in the second quarter, as hundreds of thousands left for cheaper or faster Internet connections and a similar number were dropped because they had been mistakenly counted in the past, AOL Time Warner Inc. disclosed yesterday.
In addition, new disclosures about a federal investigation into improper accounting at Northern Virginia-based America Online Inc. showed that the division's legal problems are hurting other parts of the AOL Time Warner media empire.
AOL Time Warner said yesterday that the Securities and Exchange Commission would not allow it to spin off a portion of its cable television unit until it resolves a dispute over how to account for hundreds of millions of dollars in questionable revenue from a complex deal with German media firm Bertelsmann AG.
AOL Time Warner also said it may restate previously reported profits and sales linked to the Bertelsmann transaction. And the company indicated that it could not determine how long the SEC and Justice Department investigations into its bookkeeping practices will last.