From their statement:
http://www.nytimes.com/2005/06/30/politics/30text-time.html?pagewanted=printDespite these concerns, Time Inc. shall deliver the subpoenaed records to the Special Counsel in accordance with its duties under the law. The same Constitution that protects the freedom of the press requires obedience to final decisions of the courts and respect for their rulings and judgments. That Time Inc. strongly disagrees with the courts provides no immunity. The innumerable Supreme Court decisions in which even Presidents have followed orders with which they strongly disagreed evidences that our nation lives by the rule of law and that none of us is above it.
We believe that our decision to provide the Special Prosecutor with the subpoenaed records obviates the need for Matt Cooper to testify and certainly removes any justification for incarceration.
Time Inc.'s decision doesn't represent a change in our philosophy, nor does it reflect a departure from our belief in the need for confidential sources. It does reflect a response to a profound departure from the practice of federal prosecutors when this case is compared with other landmark cases involving confidentiality over the past 30 years. Since the days of Attorney General John Mitchell, the Justice Department has sought confidential sources from reporters as a last resort, not as an easy option. Neither Archibald Cox, the Watergate Special Prosecutor, nor Judge John Sirica sought to force the Washington Post or its reporters to reveal the identity of "Deep Throat," the prized confidential source.