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=09Broadband Fight Still On Despite Megamerger=20
?????The proposed merger between Internet giant America Online and=20 entertainment behemoth Time Warner will do little to cool the ongoing fight= =20 over how to regulate new high-speed Internet services, industry watchers sa= id=20 Monday.=20 =09 =09 =09 =09 =09 =09 =09 =09 =09 =09 =09 =09 ?????It is unclear how or whether AOL would allow competing Internet servic= e=20 providers access to its proposed cable network, said industry analyst Bill= =20 Whyman of the merger, currently valued at $350 billion. AOL has fought=20 aggressively over the past year in Congress, the Federal Communications=20 Commission and with local governments to force AT&T to open its high-speed= =20 cable network to competitors.=20 ?????"It's one of the monster issues," said Whyman, who is a principal at= =20 Legg Mason's Precursor Group. AOL CEO Steve Case "said they're committed to= =20 consumer choice. What we don't know is whether other ISPs besides AOL will= =20 have nondiscriminatory access to Time Warner networks."=20 ?????Whyman said the merger will likely turn the Internet into a video=20 vehicle quicker than initially expected, which will ultimately put pressure= =20 on telephone companies to speed up their deployment of high speed digital= =20 subscriber lines (DSL).=20 ?????Barbara Dooley, executive director of the Commercial Internet eXchange= =20 Association, said the merger proves that the marketplace is working, and th= at=20 it's too early to determine which way broadband will grow. She added that= =20 smaller ISPs are still in a position to make deals with other broadband=20 providers.=20 ?????"There will be other alternatives to cable," she said. "An ISP in a=20 particular area will not have to offer all options."=20 ?????On the cable side, AT&T, a frequent sparring partner with AOL over=20 broadband issues, said the merger reconfirms the importance of cable=20 broadband.=20 ?????"The proposed deal underscores the significance of broadband=20 distribution and it reconfirms the value of AT&T's considerable broadband= =20 assets," a spokeswoman said.=20 ?????And National Cable Television Association President and CEO Robert Sac= hs=20 boasted in a statement that the deal proves that cable is the future of=20 high-speed Internet service and that regulators have been wise to stay out = of=20 the broadband fight to date.=20 ?????The Baby Bells remained adamant in their argument that they need=20 regulatory relief to compete with the new mega companies like AT&T and now= =20 AOL.=20 ?????"This new mega-company would be providing cable, Internet and telephon= y=20 virtually regulation free," said David Bolger, spokesman for the United=20 States Telecom Association, which represents the Bells. "We have the shackl= es=20 and they don't."=20 ?????The merger must pass muster with the Justice Department and the Federa= l=20 Communications Commission. The FCC had no comment on the AOL-Time Warner=20 announcement.=20 =09=09 ?=09=09- by Rebecca S. Weiner =09 ?=09=09AntitrustAntitrust Anticipation Follows Merger Announcement=20 ?????Opponents of the proposed merger of America Online and Time Warner=20 raised antitrust concerns Monday about the monopolization of the market for= =20 high-speed Internet access and consolidation of content on the Web.=20 ?????But proponents of the merger said the announcement underscored the=20 marketplace ability=01,s to resolve competitive concerns, and noted a combi= ned=20 AOL-Time Warner would present a potent new competitor to Microsoft and to= =20 AT&T.=20 ?????"Consumers do not want to be beholden to a giant media-Internet=20 dictatorship, even if it promises to be a benevolent one," said Andy=20 Schwartzman, president of the Media Access Project, which issued a joint=20 statement with Consumers Union, the Consumer Federation of America, and the= =20 Center for Media Education expressing strong reservations about what would = be=20 the biggest corporate merger in U.S. history.=20 ?????The groups are calling for the Federal Communications Commission to=20 require cable and other high-speed Internet access providers to open their= =20 networks to competitors and asking that AT&T's ownership interests in Time= =20 Warner are severed.=20 ?????But others dismissed those arguments, noting that "over the past two= =20 years, we have this phenomenon whereby a new merger or technology is=20 announced and some company is immediately put forward as the media giant,"= =20 said James Gattuso, vice president for policy and management at the=20 Competitive Enterprise Institute, citing a string of prognostications about= =20 SBC, BellAtlantic, Microsoft, AT&T, and now AOL-Time Warner.=20 ?????If consummated, the merger is also likely to benefit Microsoft=01,s de= fense=20 against the Department of Justice=01,s antitrust lawsuit, said William Kova= cic,=20 an antitrust law expert at George Washington University Law School. "The fa= ct=20 that the industry environment is extremely turbulent and unpredictable and= =20 can change the position of companies in a real hurry makes it hard to=20 prescribe remedies that won=01,t go into affect for two-and-a-half years."= =20 ?????A spokesman for Microsoft said the company had no comment on the merge= r.=20 ?????Kovacic also said he anticipated a free-for-all among regulatory=20 agencies seeking jurisdiction to review the proposed merger, including the= =20 Department of Justice, the Federal Trade Commission, the FCC, state attorne= ys=20 general, municipalities, public service regulatory bodies and foreign=20 governments.=20 =09=09?????The merger's critics are particularly concerned that AOL will re= verse=20 its long-standing argument to force broadband networks open.=20 ?????"I think [AOL CEO] Steve Case is the Benedict Arnold of the digital=20 age," said Jeff Chester, executive director of the Center for Media=20 Education. "To me, what I heard today was a reversal of their public=20 position," said Chester.=20 =09 ?=09=09- by Drew Clark =09 ?=09=09On The Hill Lawmaker Calls For Antitrust Hearings=20 ?????Senate Judiciary Antitrust Subcommittee Chairman Mike DeWine, R-OH, sa= id=20 Monday that the Judiciary Committee intends to hold hearings to scrutinize= =20 the proposed America Online-Time Warner merger.=20 ?????"It seems that this deal could make sense for consumers by creating an= =20 organization that will deliver news and information more efficiently across= =20 the video/broadband spectrum," DeWine said in a statement.=20 ?????"However, whenever a dominant Internet company merges with a leading= =20 media conglomerate, it raises a whole host of competition and public policy= =20 issues," DeWine said. "One concern in particular is the impact this may hav= e=20 on the so-called 'marketplace of ideas.' We need to examine the many=20 implications of this deal."=20 ?????"This merger also adds a new wrinkle to the broadband 'open-access'=20 debate by potentially resolving it through private negotiation rather than = by=20 government regulation," DeWine concluded.=20 ?????In a statement released Monday, Senate Judiciary Committee ranking=20 member Patrick Leahy, D-VT, expressed more skepticism. "We will have to loo= k=20 closely at whether it makes public policy sense to consolidate control of= =20 content, cable and Internet service distribution channels," he said. "At so= me=20 point, all of this concentration and convergence has implications for=20 consumers because it will minimize competition and choice, giving us fewer= =20 voices and fewer pipelines in the marketplace."=20 ?????Although Leahy said, "this merger between one of the largest owners of= =20 content with the largest provider of Internet services may have been=20 inevitable," he added, "an element of caution is only prudent given the sco= pe=20 and impact of this planned merger."=20 ?????"The great promise of the Internet has been to allow people a wide ran= ge=20 of information sources and choices," said Leahy. "What we should do is make= =20 sure that all that information does not become funneled and controlled by= =20 just two or three sources."=20 ?????A spokesman for Senate Commerce Committee Chairman John McCain, R-AZ,= =20 said he had no comment about the proposed merger. =09
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