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AOL Time Warner merger could net consumers more and less

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January 11, 2001
Web posted at: 7:07 p.m. EST (0007 GMT)


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FTC requires open cable lines

RELATED STORIES, SITES icon



(CNN) -- The AOL Time Warner merger could have an impact on every one of the estimated 122 million Internet users in the United States.

What does the biggest merger in American history mean to the average U.S. family? If they subscribe to AOL, it will mean easy access to Time Warner properties that produce everything from movies to cartoons.

But civil liberties activists worry that Time Warner rivals could have a difficult time reaching Internet consumers.

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"They (Time Warner) have proprietary content. They have a lot of services that a lot of people are going to want to have. The question is whether their competitors are going to be able to offer their services," said Barry Steinhardt of the American Civil Liberties Union.

Time Warner, the parent company of CNN and CNN.com, supplies 20 percent of cable television hookups in the United States. That cable line promises subscribers super-fast broadband Internet connections.

Combine that broadband with Time Warner's broad range of content, including Warner Brothers, HBO, Time, Sports Illustrated, the Cartoon Network, Warner Music Group and CNN -- along with AOL's current offerings, like Compuserve, Netscape and instant message services such as ICQ and AIM -- and you have one company controlling both the content and the conduit.

Throughout a year of merger negotiations, government regulators have worried whether Time Warner will allow competing Internet service providers to deliver their content over AOL Time Warner cable lines. And, whether they would be able to deliver all those Time Warner programs.

FTC requires open cable lines

The Federal Trade Commission is requiring AOL Time Warner to open its 20 million high-speed cable lines to competitors, as many as six per local market, and to make sure competitors have access to some Time Warner content.

"And those little guys are still going to have to fight to get on those systems. It remains to be seen if the process is fair," said Mark Cooper of the Consumer Federation.

Another concern for Internet consumer advocates is that, in non-Time Warner cable markets, AOL will steer subscribers to AOL sites as it has done in the past.

"I think consumers are going to be concerned, a year or two from now, when they sign onto the Internet and suddenly find that they can't get to Web site they want to visit. That, for example, those wanting to visit a small Web site that has medical information might find themselves diverted to WebMD, which is a partner of Time Warner," said Steinhardt.

But a recent statement issued by Time Warner and AOL said the deal will provide enhanced options for consumers.

"This agreement advances the commitment the companies made last winter to offer consumers a choice among multiple ISPs on AOL Time Warner cable systems," the companies said. "The companies expect that their commitment to consumer choice embodied in the FTC agreement will become a model for other cable systems throughout the country."

The merger also offers the potential of more interactive services, like ordering a movie, a meal or an outfit on the same set that brings favorite television shows.

However, critics wonder if consumers will be able to choose from any television show, or just those owned by AOL Time Warner.



RELATED STORIES:
FTC delays AOL Time Warner decision
November 13, 2000
AOL asks appeals court to make 'forward-looking remedy'
November 3, 2000
AOL, Time Warner urge FCC to leave AT&T out of debate
October 12, 2000
Sunday Telegraph: Time Warner and EMI set for music mega-merger
January 22, 2000
Welcome! Why You've Now Got AOL Time Warner
January 20, 2000

RELATED SITES:
AOL
Time Warner
American Civil Liberties Union
Federal Trade Commission
Consumer Federation


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