Rep. Markey urges limits on AOL/TW
Solon concerned about privacy, open access
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In a letter to Federal Communications Commission chairman William Kennard made public late last week, Markey warned that limits already imposed by the Federal Trade Commission won't stop AOL Time Warner from becoming a monopoly.
"AOL and Time Warner have consistently promoted their combination as achieving a synergy that is both pro-competitive and pro-consumer," Markey said. "While many of the benefits of the 'synergy' ... may ultimately serve consumer interests and competitive policy goals, I have a number of concerns about potential negative consequences of the merger regarding privacy, open access, Instant Messaging interpretability and media concentration."
The FCC is expected to act on the merger in the next few weeks, capping an extended review beset by charges that AOL Time Warner will control both content and conduit. Consumer groups and corporations including Microsoft continue to lobby the FCC to restrict the deal.
Earlier this month, the FTC approved the merger after imposing significant conditions forcing the mega-company to open up valuable high-speed cable lines to competing Internet service providers.
Points of contention
Markey said he's still not convinced that the issue of open access has been addressed satisfactorily by the FTC and is still concerned that smaller ISPs could be wiped out by the merger. He thus wants the FCC to reconsider the matter. Markey also raised the thorny issue of AT&T's 25% stake in Time Warner Entertainment (TWE), which includes cable systems and Warner Bros. studio. AT&T wants to shed TWE, but has complained that Time Warner -- which owns the remaining stake -- hasn't been willing to negotiate a fair price.
Siding with AT&T, Markey said the FCC should order Time Warner to facilitate AT&T's sale of TWE. Otherwise, the partnership between AT&T and AOL Time Warner could hamper competition.
The FCC has ordered AT&T in no uncertain terms to shed its TWE interest if the telco wants to complete its merger with MediaOne Group, since the union pushes AT&T over federal cable caps.
AT&T has said it has every intention of meeting the FCC's order by May 19.
FCC authority questioned
Meanwhile, some in Washington say the FCC oversteps its limited authority to review mergers when transferring licenses from one company to another, and that the proper authority for such review rests with the FTC and Justice Dept.
A strong advocate of this position is Sen. Joseph Ashcroft (R-Missouri), a conservative Republican who has been nominated by President-elect George W. Bush to serve as attorney general. Ashcroft, who lost his Senate re-election bid in the November election, co-sponsored legislation earlier this year that would eliminate the FCC from the merger review process.
