AOL, Time-Warner executives plead merger case in DC

By : |March 2, 2000 0

Concerned that federal regulators may seek to block their planned $130 billion merger, America Online and Time Warner announced they would allow other Internet service providers access to their cable TV networks so consumers will have a choice of online service providers. Competitor AT&T has so far refused to let companies other than Excite@Home offer high-speed access services on its vast cable network.

The announcement came just hours before AOL and Time Warner executives testified before the US Senate Judiciary Committee. During that meeting the company officials pledged to open up their cable TV lines to other Internet service providers. William Kennard, the powerful chairman of the Federal Communications Commission (FCC), called the companies’ pledge a welcome development. “For some time now, I have encouraged the marketplace to find business solutions to consumer demand as an alternative to intervention by government. Today’s announcement is a significant step in the right direction.”

Still, members of the Senate Committee said they remain concerned that mega media merger would allow AOL Time Warner to unfairly dominate the Internet and media worlds and invade the privacy of average citizens. During several hours of testimony AOL chairman Steve Case and Time Warner chairman Gerald Levin sought to assure the Senators that the new company would respect privacy and preserve journalistic independence. ”We share the same goal; protecting consumers and their families and establishing a new standard of privacy and security for the digital age, while permitting the Internet to flourish in these changing times.”

Before its decision to acquire Time Warner, AOL had been a strong advocate of ”open access,” to allow Internet companies to compete for business on various cable-based networks. The company had fought hard to get the government to force AT&T to open its cable network to AOL and other providers. Not to open the Time Warner cable services to competing ISP would have opened AOL to charges of being hypocritical.

Committee’s chairman Orrin Hatch told Case he doubted the company’s promise to voluntarily offer such access, saying it is vague and is not binding. ”Given that this agreement lacks both enforceability and

specificity, this committee remains to be convinced of its value beyond the boardroom and public relations office of AOL Time Warner.” Senator Dianne Feinstein, of California agreed: ”This does not seem like

a binding commitment,” she told Case and Levin.

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