IP: Re: AOL TW MoU on "open access" [comments welcome djf]

[Dave Farber <farber () cis upenn edu>]

> X-Sender: jwarren () mail well com
> Date: Tue, 29 Feb 2000 11:01:08 -0800
> To: farber () cis upenn edu
> From: Jim Warren <jwarren () well com>
> Subject: Re: IP: AOL TW MoU on "open access" [comments welcome djf]
>
> This widely-hyped AOL Time Warner publicity release smells like nothing
> more than political horse-apples, hoping to defuse well-founded
> congressional and FTC opposition to the merger of these two monoliths:
>
> 1.  It is NOT a binding agreement.  It is nothing more than a highly
> publicized "intention."  There is no requirement to implement it, and if
> implemented, no restraint against later modifying or retracting it -- after
> the guv'ment lets AOL and Time Warner merger into a single cable-ISP cartel
> with monopoly control over much of the nations' one-and-only broadband
> cable systems in most of the communities they serve.
>
> 2.  It says they "will make" -- sometime, somehow -- *some* kind of open
> access to other ISPs.  For instance, pay us enough money to compete with
> half of our company, and we'll let you on the cable systems that AOL-TW
> would own, if allowed to merge.  Or they could take a lesson from the
> regional phone companies and simply stonewall providing full access to
> competitors (even four years after the 1996 Telecom "Reform" Act "forced"
> them to do so; and with AOL-TW, there's no legislated force, at all).
>
> 3.  The only "*binding* definitive agreement" they propose is to allow AOL,
> *alone*, to provide ISP services on TW's massive area-cable monopolies.
> But once merged into a single company, there'd be no need for such an
> agreement.
>
> 4.  That agreement "will be used as a model for the *commercial*
> agreements" with AOL's competitors.  For instance, maybe only the price and
> quality of carrier service would change.
>
> 5.  They are "committed to offer consumers a choice among multiple ISPs."
> That's about like IBM offering a choice between DOS operating systems on
> their original PCs -- the one from Microsoft came with the computer without
> extra cost; the other DOS OS came from Digital Reserarch Inc., that was the
> dominant DOS company of the time -- but at extra cost.  Surprise!  MS
> became the 800-pound gorilla that years of anti-trust litigation has been
> unable to tame, while DRI died an ignoble death.  We have *every* reason to
> believe that AOL-WT would offer the same kind of "choice" for AOL's
> competitors.
>
> 6.  Phrases such as "will make" and "is the intention" and "will not be"
> are legal-beagle hypotheticals.
>
> 7.  AOL has already illustrated its idea of "a quality consumer
> experience."  Its current client software "accidentally" makes it
> impossible for many users to reach many of AOL's competitor ISPs ... a
> problem so widespread that there are now class-action lawsuits moving
> forward against AOL for it's irresponsible "quality consumer experience."
>
> 8.  Since when is a division (AOL) within a single corporation (the merged
> AOL-TW) considered merely "affiliated" with it?  They *propose* that, "AOL
> Time Warner will not discriminate in those economic arrangements based upon
> whether or not the ISP is affiliated with AOL Time Warner."  This makes
> sense only as long as AOL is *not*, itself, simply part of a single AOL-TW
> corporationy.
>
> 9.  They say, "AOL Time Warner will allow ISPs to provide video streaming."
> So what?  For a high enough premium price, they would probably allow
> [some?] ISPs to do almost anything.
>
> 10.  In one part of this legal gibberish, they say AOL-TW will allow ISPs
> to offer services on a "regional or local basis," and in the very next
> sentence they say they will "*not* allow ISPs to [serve] only a portion of
> an AOL Time Warner cable system."
>
> Near the end, they finally admit that their memorandum only "represents an
> initial step [to define] terms, conditions and parameters" for TW cable
> customers to access non-AOL ISPs.
>
> In other words, it's just non-binding, fully-revocable smoke blown for the
> FTC and Congress critters who are showing well-justified doubt about the
> trust/cartel nature of the *proposed* merger between AOL and TW.
>
> --jim, Jim Warren; jwarren () well com
> Contributing Editor & technology public-policy columnist, MicroTimes Magazine
> Also GovAccess list-owner/editor; 345 Swett Rd, Woodside CA 94062
>   voice/650-851-7075; fax-for-the-quaint/650-851-2814
>
> [self-inflating puff: Hugh Hefner First-Amendment Award, Playboy Foundation;
> Electronic Frontier Foundation Pioneer Award (in its first year);
> James Madison Freedom-of-Information Award, Soc.of Prof.Journalists-Nor.Calif
> founded InfoWorld; the Computers, Freedom & Privacy Conferences; etc etc etc.]