Broadband Fight Still On Despite Megamerger 
?????The proposed merger between Internet giant America Online and 
entertainment behemoth Time Warner will do little to cool the ongoing fight 
over how to regulate new high-speed Internet services, industry watchers said 
Monday. 
	
	
	
	

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