Open Access Encouraged by AOL-TW Proposed Merger

While it's too early to predict what regulatory hurdles may obstruct the merger, FCC chariman Wm. Kennard sees the deal as vindicating his no-regulation view on cable access.

by Patricia Fusco
of internetnews.com
[January 20, 2000]

The top federal telecom regulator gave America Online Inc. and Time Warner Inc. the federal thumb's up Wednesday: William E. Kennard, Federal Communications Commission chairman, said the deal was an encouraging sign that market forces are working to keep high-speed Internet cable access open and competitive.

Kennard has chanted the FCC's official "hands off" regulatory mantra since the open access debate first became prominent early last year. Kennard said the FCC has no interest in requiring cable companies to share their networks with independent Internet service providers.

"I think it's encouraging," Kennard said. "I've been saying since the very beginning of this debate that the marketplace should work this out."

AOL weighs in
American Online (AOL) spearheaded the "open access" lobbying force unleashed on the FCC and Congress demanding that regulators require cable companies share lines with competitors. Even with the proposed Time Warner (TWX) merger in view, AOL Chairman Steve Case remains a steadfast proponent of open access to cable networks.

At the press conference announcing the Time Warner deal, Case restated AOL's commitment to voluntarily opening Time Warner's lines, noting that regulatory intervention was no longer required.

Off the record
Kennard noted that his comments were by no means his agency's official view, because the companies had not yet filed for approval of the deal. "This transaction will raise some interesting new issues that we haven't confronted before,"' Kennard said.

Kennard said the FCC would carefully review AOL's written commitments to open access that would likely accompany such a filing. "Now the devil is in the details and we'll have to look and see what is really being committed to but, yes, I'm optimistic and still encouraged."

Hurdles await?
Potential regulatory obstructions to completing the proposed merger will not be revealed until the two companies file with the federal agencies. The Hart-Scott-Rodino Antitrust Improvement Act requires that a merger of this magnitude come under federal antitrust review.

Both the U.S. Department of Justice and the Federal Trade Commission could be a part of the congressional merger review. Kennard will most likely testify at the hearings and weigh in with his agency's separate review of the merger.

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