When Carl Icahn was needlessly hounding the Time Warner management (my employers), I urged caution and asked them to stay the course. A few weeks ago, a chart in The Economist showed that despite a checkered past, there is web life in this conglomerate called Time Warner.

It needs some work, according to my colleague Erick Schonfeld who has just published a piece, Five Ways To Fix Time Warner. It is a very Web 2.0 centric “quick-fix” recipe, and while I agree with the overall premise, I disagree with Erick’s contention –dump the distribution.

Time Warner should dump its capital-hungry distribution businesses — its cable operations and the dial-up part of America Online — and become a pure content company.

I tend to believe more in pipes and networks than in the new new mantras that preach that content and distribution should be independent of each other.

I think we have to be very careful about preaching radical change without taking into account the fact that we are living with an effective duopoly when it comes to the Internet access in the US. Time Warner Cable is one half of that duopoly, which puts it at an advantage. Giving up on distribution is giving up on a good thing.

Let me explain why. Given that about 70 odd analog channels bring in around $50 a month, the per-channel value is pretty low. However, that very same channel when used for broadband brings in about $40 a month. On an average, the cost of offering broadband is about $10 a month per subscriber.

Compared to the cost of content creation in a TV channel, and what Time Warner has to pay to say MTV or whomever; broadband is the cheapest and most effective use of spectrum available inside the cable system. Add voice to the mix, and the revenues increase to about $80 a month. Distribution, aka pipes, is a pretty good business. Even AOL dial-up makes money. AOL sells dial-up for $25 a month, but since the whole modem banks and management of the whole network is outsourced to Level 3, it really costs about $8 a month. Do that math: it may be dying a slow death, but dial-up is still cash money. It helps pay down the debt.

The problem with Web 2.0 is the one dimensional thinking. It only thinks about the web. The world has transformed – on one network rides voice, video, data and mobile. They are not discreet networks, but instead part of an big IP-mash-up. Any company which plans to remain relevant in the future has to treat these as features of a big network. And content is the glue that brings them together. Voice, for instance is the cheapest and unending user generated content, that only enhances the value of that “one network.”

Viacom is making all these herky-jerky digital moves because it doesn’t have the pipes. Similarly, News Corp. has that very same problem. TW on the other hand is not that much of a problem. With network neutrality in bit of a jeopardy, TW Cable can ensure that the company is first among equals – Comcast, AT&T, Verizon and Qwest. That pipe is going to ensure that rest of Erick’s suggestions actually get to see the light of the day. I could go on about this, but I will stop. Still, what is Erick’s best suggestion?

Meanwhile, the remaining AOL.com content business — which includes such underutilized assets as AOL Instant Messenger and MapQuest — should relocate from Dulles, Va., to Silicon Valley. That way it can cross-pollinate with the true innovators of the Web and possibly pick up some entrepreneurial zip that it has sorely lacked.