The biological father seems to want to provide support for the child - both financial and emotional. Good for him.

The decision made should be whatever is in the best interest of the child. Unless the father is abusive, an addict, or some other type that should not be around children, I think he should be allowed to have some type of visitation, particularly as he's agreed to help financially.

From the POV of the welfare of the child - having more adults involved to provide both emotional and financial support is a good thing.

The only caveat I have is that since the child probably considers Ted to be "Dad", the biological father needs to agree not to rock the boat on that, at least until the child is old enough to handle it. Again, the welfare of the child has to come first.