SHOWDOWN AT THE FCC CORRAL
With The Government
Case and Levin pitched the benefits of the $120 billion AOL-TW merger to all five commissioners of the Federal Communications Commission, which must approve the deal. The commissioners questioned Case and Levin primarily on the subject their companies' pledge that consumers who subscribe to high-speed Internet service delivered over Time Warner's cable systems will have access to a number of Internet providers, not just AOL.
"I believe that the promise of the Internet is in its remarkable openness," said FCC Chairman William Kennard. "And I'm not just talking about the triple-X quality of the porn."
Kennard and the other commissioners challenged Case and Levin to offer more details, such as when the cable systems will begin carrying other Internet providers. Levin said the company is working now to restructure an exclusive agreement it has with cable Internet provider Road Runner (38%-owned by Time Warner) so that it can carry other services.
"We've heard a lot of good intentions and seen some non-binding industry agreements," Kennard said. "We've seen some technical trials, but it's my belief, until we see an open access platform…there will continue to be a lot of skepticism, and for good reason."
"We are…deeply committed to delivering access to a broad array of the best content available, regardless of who produces it," Case reassured the commissioners. "And I'm not just talking about porn."
Disney reps were in attendance to restate the company's opposition to the deal as it is currently structured. The company has asked the FCC to consider requiring Time Warner to separate its ownership of media distribution and production properties, a suggestion that TW President richard parsons',390,400);">richard parsons',390,400);">Richard Parsons labeled "almost laughable."
"We don't think you can rely on promises of good behavior," said Disney Executive VP of Government Relations Preston Padden. Disney has recently been joined in its opposition stance by NBC and some consumer groups. Yesterday, rupert murdoch',390,400);">rupert murdoch',390,400);">Rupert Murdoch's News Corp. (which owns Fox Broadcasting, among other concerns) announced it would not stand against the merger (hitsdailydouble, 7/27).
Other foes of the merger warned that the combined AOL-TW could too easily limit access to programming, as well as stifle technological advances and overall competition.
"The Internet is going to be an open platform, and AOL-Time Warner should not bottleneck access," said James Love, director of the Consumer Project on Technology. "And I'm not just talking about porn."
The AOL-Time Warner merger must also get approval of the Federal Trade Commission, who will examine whether the merger would violate U.S. antitrust laws.
