FCC Approves AOL-Time Warner Merger

Lots of people submitted this - we held off until we could find the FCC's information page. CNN and nearly every other news outlet on the planet have stories, but for the real info, you'll need to go straight to the FCC and read their documents. While you're pondering the meaning of this, consider: it used to be the policy of the U.S. government to keep content producers and carriers separate.

Comments

Re:Could be good??

[iamsure]

I hate to disagree, but..

I went and interviewed for a position with the software development group for AOL back in september, at which time they were already planning on the merger..

Anyways, while I was interviewing, they paid particular attention to my linux knowledge, and specifically said that 'certain products were being developed for that platform'.

She non-specifically made it clear that AOL intends to be *EVERYWHERE*, and that linux makes a nice way to do that.

Dont be so sure it wont happen. Remember, AOL generally hasnt switched to netscape code for their browser to keep their logo on windows machines, which is becoming less important.

They can still get away with making NON-windows versions that use the netscape code, ya know?

They also can do the same for compuserve, and all the companies that they license their technology to (prodigy).

FCC Doesn't Want to Look Bad on TV!

[scotteparte]

Remember your history? The FTC was formed to enforce and prosecute antitrust charges when the Sherman Antitrust Act was first passed. This is back when the word "Monopoly" was being coined, and Standard Oil was the only oil company around. Since then, it has had an inconsistent record on litigation.

They went after the first big boys on the block - the Carnegies, Rockefellers, etc., but they never went after Hearst even though he owned a newspaper in every city. He also owned all the production means, start to finish, to build a newspaper, and consistently used his papers to influence public opinion and put pressure on political figures. Hearst almost kept us out of WWII by defending and supporting the Nazis in his papers.

The FTC went after AT&T, but hasn't done anything as the Baby Bells have come back together to form (ugh!) Verizon. They haven't blinked when banks take over cities, and airlines consolidate. And they haven't offered more than trifling criticism on mass media deals. Why not?

If the merger were to be blocked, how do you think the FTC and FCC would look on CNN? Most people aren't smart enough to see the connection, and slowly but surely, the media would drop them down a notch. Who knows, CNN might be able to generate enough support to overturn Sherman Antitrust completely! And then where would we be? I mean, the media killed the Independent Counsel Act after the Clinton impeachment. I've seen five CNN correspondents tag-team a gov't PR official until he almost cracked ("Are there any questions from a non-CNN reporter?" was his exact quote). The power of the media in this country has reached the point of ridicule.

I think we should ask ourselves a question. If the founding fathers had known the speed and widespread audience that media could generate given the technology, would they have so vigorously defended the rights of the media? Or would there have been a responsiblity issue? I think that with technological advancement comes a responsibility not to abuse it, and the mass media has overstepped its bounds. I'm the last person in the world who wants to revisit the First Amendment (I think it's the most important part of our body of law), but there must be some mechanism to stop the glaring abuses going on. Any ideas?

No Open IM yet, though

[alanjstr]

To quote from the PCWorld article:

"AOL will be allowed to continue blocking users of competing instant-messaging services from communicating with users of its market-leading instant-messaging services known as AIM and ICQ.

"Only if AOL extends its instant-messaging services to include multimedia features like videoconferencing would the company be required to allow communications between its users and users of competing services."

And since most people have no use for video-conferencing, this doesn't seem like a big deal to me.

This is a bad thing for capitalism

[gaijin99]

The thing that so many of us don't remember is that capitalism is based on the idea of companies *competing*, not cooperating. The modern "merge and be friendly" attitude among the biggest players is leading us to higher prices and worse service.

While some people point out the provisions within the merger allowance requiring access for "non-premium" service (who decides what is "premium" and what is not?) the simple fact is that we now have content and provider being the same entity, a vertical monopoly. This is bad from any standpoint. Those who say "well, it isn't that bad, they'll be watched closely for five years" are ignoring the fact that this merger will still exist after five years have passed. Some corporations and managers know the value of patience; they can wait five years before they get nasty.

One of the functions of government in a capitalistic society must be to preserve competition, a function that our government cannot fulfill if it is owned by the big corporations. The AOL/TW merger is just a symptom of the larger problem of campaign financing. We must acknowledge that a "campaign contribution" is nothing more or less than a bribe. Our "elected representitives" appoint the FTC and the FCC, is it any surprise that they have appointed people who have weakened our watchdog orginizations when they owe their very elections to the corporations the FTC is supposed to be watching? The system of legalized bribery in politics must end or we will be seeing more and more mergers of this sort.

I find this VERY frightening

[RayChuang]

Folks,

While you folks are celebrating the supposed breakup of Microsoft (which may now never happen given Judge Jackson's recent public comments and the incoming Bush administration), that case has been rendered moot by the now-certain merger of AOL and Time Warner.

Think about it: AOL Time Warner is now the world's most powerful mass media entity, something right out of the James Bond movie TOMORROW NEVER DIES. Look at what they will own now:

1. The #1 ISP in the USA.

2. The #2 internet broadband provider in the USA.

3. The #2 cable system provider in the USA.

4. The most powerful cable/satellite TV content provider in the world with CNN networks, HBO networks, Turner Broadcasting networks (TBS, TNT, and TCM), and TVKO pay-per-view.

5. Their own TV network (WB Network).

6. A massive movie and TV production combine (Warner Brothers, New Line and Gramercy).

7. One of the largest magazine publishers in the world.

8. One of the largest music publishers in the world.

9. One of the largest comics publishers in the world.

This has the potential for First Amendment abuses that border on frightening. It may give new meaning to the phrases "bias media" and "conflict of interest."

gov't intervention

[J.J.]

You know, the idea of Instant Messenging service becoming a major sticking point between the merger of two multi-billion dollar corporations strikes me as somewhat silly. But while reading the constraints that AOL is bound to by the FCCs decision, I'm struck by an interesting thought.

In order to neutralize the effectiveness of AOLs IM in competetive situations, the FCC is trying to force AOL to create and adhere to a standard, so that any company can create an IM client, and interact with AOL's.

Using an established standard, to open up a company's monopoly on services.

What if the Justice Department had saddled Microsoft with similar constraints? Standardize the document and spreadsheet formats, so that any word processor or spreadsheet application can read, edit and save documents. For people in the business world, this is easily the biggest hurdle to switching to Linux. (yes, yes, yes, I know, "Linux will do it, freedom from the yoke of MS control! without their help!" spare me. it's not perfect, and it needs to be)

If people had the freedom to choose which program they used to read their documents, then Microsoft would have to work a lot harder to build better software. Attarct users based on the qualities of the software, not based on what format your files are in. We'd see more word processors crop up, more spreadsheet applications, because suddenly there would be this gigantic installed base of users, itching to try out something little/yellow/different/better.

So. That whole idea is not really fully developed, but I've got to run. You want to finish it off for me and solidify it bit, feel free.

J.J.

Picking the lesser of two evils

[Alien54]

Think about it: AOL Time Warner is now the world's most powerful mass media entity, something right out of the James Bond movie TOMORROW NEVER DIES. Look at what they will own now:

This is why I can see Microsoft looking to model themselves after AOL in the coming years, with their .NET proposal, etc.

Question is, is this enough to stop Microsoft? Are they a big enough opponent?

and is this something we would even want?

Or should we look forward to the rumored AOL OS in the works? (more spam, more often!)

Interesting articles on the merger in Salonmag

[andr0meda]

First, about the merger itself, some reactions from a few known and lesser-known people, and lastly a bit of content about what this means for competitive news&webcontent enterprises.

Not as bad as it might seem

[Masem]

First, since the FCC *and* FTC have both given the nod, this is it -- AOL and TW will now merge (if that's not already apparent).

I'm against this deal for sure, but you need to remember that a lot of things went into this: it took more than a year for FCC and FTC to review it, during which both AOL and TW stock tumbled; Initially, most pointed out that AOL was 'buying' TW, but with the value of the companies now, it's more now that TW is 'buying' AOL; both companies had to divest themselves of several smaller aspects (biggest one that I can recall was TW owning part of AT&T, which they were told to give up), so neither is as bohemith as before; both the FTC and FCC have put several restrictions on the merger, most importantly that the merged company must make open access for all that have finiacal means, including a required contract with at least two other ISPs (Earthlink is one, I believe, that they've already gotten a deal down for); and AOL's had to make several concessions on the lucrative instant messaging market.

Which means that for at least 5 years, AOL/TW will be under a government microscope -- if they so much as move to limit *non-premium* content from non AOL/TW users, you'd bet they have the goverment on their backs before you can say 'censorship'. Even with the DOJ on their case, Microsoft is much more free to do things now than AOL/TW is.

I think that the FTC/FCC is looking at this as an experiment with rather high odds for the companies involved. If it is possible for a content provider AND network provider to coexist as the same company while playing fair to all other content and network providers out there, then they might let further mergers go through. If AOL/TW play rotten tricks, they'll take action to prevent this further.

But as I mentioned above, the situation of the AOL/TW merger is drastically different now than the announcement a year ago that the thought of those two companies combined doesn't scare me as much -- it's still worrisome, but not as bad as, say, MS licensing issues.

There was no way this wouldn't go through

[Bojay Iverson]

FCC: No, Mr. Case, we're afraid we can't allow this takeover/merger to go ahead. It would create a monopoly far reaching in it's insidiousness.

AOL: Is that right Mr. Chairman? Do you remember when you signed up for AOL? Do you remember the groups and sites you visited on that account? We do. We have all the logs of your visits to bizzaro dwarf world & amputeens. Are you sure you won't let this go though?

FCC: Errm, OK. Please don't tell my wife about this.

AOL: Muuuahhhaaaa, haha haahahah hahahhaahahhahahah ahhahahahahh, etcetera, etcetera...

Turn another turn

[Markvs]

Back in the 19th century, it was normal that a company had it's own newspaper and general store.

So Time-AOL has content and bandwidth? SO WHAT!

Media of *any* kind is telling you something, it's what you want to believe that makes the news. Pravda was widely disbelieved in the USSR (and other countries) under Communism. My relatives in Communist Prague back in the 70s and 80s *knew* to read the news with a grain of salt.

Have we forgotten that?

Do we assume that the media should always be presented in truth... if so, who's truth?

Finally!

[Seumas]

Eventually, there will just be one giant media corporation that provides our entertainment and news. Once that happens, we'll finally be able to rely on the news that is provided to us, because there will be no other bothersome entities to provide conflicting reports! Finally -- news you can trust! *COUGH*
---
seumas.com

Could be good??

[cansecofan22]

I wonder how many people think that this could be a good thing? Think about it, AOL hates Microsoft. So, if AOL/TW jumped on the Linux bandwagon and released a version of AOL for Linux with, say, K-Office or Open Office integrated with a Red Hat or Mandrake (just an example) Distro, all on 1 cd that comes free with your time warner cable internet and cable tv. How many AOL members would switch to the AOL/Linux? I am betting a lot because of the Internet interface that they know and love and the FREE office suite and OS.
Just a thought passing through my head, it know it is HIGHLY unlikley, but it is possible!