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Tuesday, Nov 24, 2009
A group of consumer advocates and content providers is fighting the merger of AOL and Time Warner. These strange bedfellows won't kill the deal, but they could alter it for the better.
Jun 14, 2000 | As the merger of America Online and Time Warner lumbers toward its sweaty conclusion, odd pockets of resistance -- all joined by a singular desire to derail this megamarriage before it starts -- are cropping up in unlikely places.
Among the strange bedfellows: Internet service providers and Web sites that fear a lockout from an AOL Time Warner network, the authors of much of the content of the Time Inc. magazine division, skeptical congressmen from both political parties and a consortium of consumer advocacy groups encouraged by Disney.
Though this motley insurgency stands a snowball's chance in hell of actually derailing the merger -- the government has until the end of the year to approve it -- the assorted partisans (most of whom are fighting in the name of public interest and consumer protection) could wind up altering the nature of the agreement, quite likely for the better.
Open Sesame
The biggest gun in the arsenal aimed at AOL Time Warner is a 158-page "Petition to Deny" presented to the Federal Communications Commission and the Federal Trade Commission by a consortium of consumer interest groups. The irate consumer organizations include the Consumers Union, the Consumer Federation of America, the Media Access Project and the Center for Media Education.
The consumer interest groups' argument against AOL Time Warner should be familiar to anyone who has paid even partial attention to the antitrust debates surrounding media mergers: It concerns the question of open access.
Simply stated, open access is the right of other ISPs to use the broadband networks that AOL Time Warner (and AT&T) will be tempted to hog by nature of their vast cable holdings.
"At the end of the day, these guys are going to control everything," says Jeffrey Chester of the CME. "That's why open access is important. If you're going to live in a world dominated by a few media companies, you have to have an architecture that permits a greater diversity of voices."
Even AOL used to think open access was important. Before the deal with Time Warner, Steve Case and company campaigned tirelessly for open access. Afraid that AT&T (which controls the Excite@Home network) and Time Warner (with its Roadrunner service) had sewed up the future using fiber-optic cable, AOL wanted Uncle Sam to guarantee that its own service would be delivered on that fast rail. It spent tens of millions of dollars funding OpenNET, an independent group that advocates open access via government regulation.
Then Case decided to buy Time Warner. And in a conversion that rivals Constantine's move to Christianity, the whole open-access problem was no longer quite so nettlesome.
