FCC EMBRACES MONSTER MERGER: AGENCY IMPOSES MILD OPEN ACCESS PROVISIONS ON AOL TIME WARNER. by Marshall Runkel.

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What do Bugs Bunny, Batman and Steve Case have in common? They are all now brothers in the same corporate family. So you ask, “What’s up with that, Doc?” From CNN to BMX Business News, Dancer in the Dark to The Sopranos, old-school publications like Time to new-school rap and roll, AOL Time Warner has now got it all.

A year and a day after AOL and Time Warner announced their merger on January 10, 2000, the FCC issued its final approval of it. One of the most contentious issues to be addressed in the merger was open access–whether or not companies like AOL Time Warner can restrict access to their cable lines to competing Internet Service Providers. Included in the approval were conditions, written by the Federal Trade Commission, requiring AOL to provide access to its newly acquired, high-speed cable network to at least a few other ISPs. Mindspring/Earthlink became the first company to complete a deal for access to AOL’s new network. The FCC also required AOL to make sure that the next generation of its dominant instant messaging software will interact with other instant messaging systems.

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The competition is already squawking. Allan Sloan, Newsweek’s Wall Street editor, wrote in the Washington Post, “First, no matter what anyone at the new company says, journalism–going out and looking for the truth, then presenting it to people–at AOL Time Warner will be less important than it was at Time Warner. Where, in turn, journalism was further down the food chain than it had been at the old Time Inc.” Then, as if to drive Mr. Sloan’s point home, CNN fired 400 employees.

Some media critics praised the relatively mild conditions imposed on the merged company. Andrew J. Schwartzman of Media Access Project said of the FCC decision “We got most of what we needed to protect free speech, economic growth, and competition in this new interactive medium.” But the conditions are not open access. The FCC only required AOL Time Warner to provide 4 or 5 nonaffiliated companies the ability to offer services on the AOL cable system. More significantly, the rules do not apply to other cable operators.

The restrictions were passed on a 3-2 party-line vote, and FCC Chairman William Kennard resigned on January 19, 2001. The new chair of the FCC, Michael Powell (yes, he is the General’s son), said in his dissent that saying that the “Majority [gave] in too much to their collective imaginations” in imposing any conditions at all.

Nobody who has visited Commissioner Powell’s Main Street-inspired website (www.fcc.gov/commissioners/powell) should have any doubt about his imagination. Just like those “Morning Again in America” commercials, Mr. Powell seems to embrace a sunny view of an America where June and Ward Cleaver sip coffee with Mr. Wilson commiserating over the latest terrible problems posed by that annoying Dennis the Menace.

Despite the fact that the FCC has officially opened a Notice of Inquiry on open access, meaning they will eventually schedule hearings on the topic, it is unlikely that the new commission chair will support any progress on this front. The FCC has yet to require any other cable company to provide access to other Internet service providers. And the giant AT&T combine (which controls the current legal maximum of 32.8 % of the U.S. cable market) is certainly not going to do so voluntarily. (See “The Future of Openness on the Internet, MediaFile, May/June 2000.)

So is that all folks? Should we grin and bear it as we watch the corporate colonization of the Internet? In a word, hell no. Congress is gonna have to decide this issue, not the FCC. Now is the time to educate yourself and your members of Congress about the future of the Internet.

National media watchdogs (www.nogatekeepers.org) and a coalition of Internet service providers (www.opennetcoalition.org) have excellent websites dedicated to the open access issue. Representatives Rick Boucher and Bob Goodlatte introduced legislation in the last Congress that would have established a national open access policy. Let’s hope their legislation will be reintroduced. This Congress may look more favorably on open access by virtue of the fact that many media corporations that do not own cable systems (ABC/Disney, Microsoft, etc.) have come to see the importance of open access to their continued profitability. Absent the voices of people like you though, Congress will be tempted to craft an “open access” policy that guarantees the right of big corporations to be heard and seen on the Internet, but will leave the rest of us out.

Marshall Runkel is an assistant to City Commissioner Erik Sten in Portland, Oregon.

Portland was the first city in the country to adopt an open access policy as a condition of transferring its local cable franchise from TCI to AT&T in December of 1998. AT&T sued the City of Portland for adopting the policy. The Federal District Court for Oregon upheld the city’s right to adopt an open access policy. But, on appeal, the 9th Circuit Court ruled that Portland did not have the right to impose the policy because providing Internet service over cable is a telecommunications service governed by state and federal law, not a cable service which local governments have much more discretion to regulate. At present, cable companies in the 9th Circuit are arguing that they should not be required to pay cable franchise fees for providing Internet service while simultaneously maintaining that their Internet service should not be subject to the open access requirements embedded in national telecommunications law.

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