FCC Pushes AOL, Time Warner on Open Access

The Federal Communication Commission pressed America Online Inc. and Time Warner Inc. on Thursday to offer a more concrete timetable for opening access to the companies’ cable systems as the agency’s regulators considered whether the mega-merger of the two companies was in the public interest.

Top company executives faced their detractors at a meeting held by the FCC as accusations swirled over whether the $120-billion deal would stifle competition.

The marriage of AOL, the world’s largest online company, with Time Warner’s huge publishing and entertainment empire has raised concerns that the combined companies will be able to muscle aside their competitors.

FCC Chairman William Kennard said open access by competitors to those high-speed cable lines was a key issue.

“We’ve heard a lot of good intentions and seen some nonbinding industry agreements, we’ve seen some technical trials, but it’s my belief, until we see an open access platform . . . there will continue to be a lot of skepticism, and for good reason,” Kennard said.

AOL Chief Executive Steve Case and Time Warner CEO Gerald Levin vowed to accelerate access to their networks and said the merger would stimulate competition, innovation and benefit consumers despite accusations to the contrary.

“We are confident that together, AOL and Time Warner will build a company that helps to take the Internet to the next level--connecting, informing and entertaining people around the world as never before,” Case said at the public hearing.

Foes of the merger warned that AOL and Time Warner could easily limit access to programming and content from competing networks, hinder technological advances and stifle overall competition in the growing industry.

“The Internet is going to be an open platform, and AOL-Time Warner should not bottleneck access,” said James Love, director of the Consumer Project on Technology in Washington.

Yet, amid all the complaints leveled by firms that compete with AOL and Time Warner, Kennard stressed that he did not want the agency’s review to be a platform for settling contractual disputes between the companies and its rivals.

“We don’t like processes here used as leverage in disputes,” Kennard said.

Before the two companies can merge, the FCC must determine whether the transfer of broadcast licenses to AOL is in the public interest. In addition, the Federal Trade Commission is examining whether the merger would violate U.S. antitrust law.

The issue of open access was thrown into the FCC’s court when a U.S. appeals court recently ruled that broadband infrastructure services were a form of telecommunications subject to regulation by the FCC, and that open-access rules designed for traditional cable services were not applicable.

Kennard said the agency will hold a proceeding this year to examine the implications of that ruling and impact on the industry.