AOL Unit May Be Hurt by WorldCom Collapse

Time Warner Telecom Inc. had a second-quarter loss as revenue fell 15%. The telephone and Internet-services company said it has enough money set aside in case WorldCom Inc., its largest customer, fails to pay its bills.

Time Warner Telecom, 44% owned by AOL Time Warner Inc., had a net loss of $30.8 million, or 27 cents a share, contrasted with net income of $4.4 million, or 4 cents, in the year-earlier period, the company said in a statement. Revenue fell to $184.6 million from $217.9 million.

The company had $31.1 million set aside as of June 30 to cover “doubtful accounts” from customers including WorldCom, a telephone company that filed the largest U.S. bankruptcy case. WorldCom accounts for 12% of Time Warner Telecom’s monthly revenue and owed it $14.7 million as of June 30. WorldCom buys phone, data and Internet capacity for its business customers on Time Warner Telecom’s fiber-optic network.

Time Warner Telecom said it had $324 million in cash as of June 30, an increase of $9 million from the first quarter, and is in compliance with its lending covenants.