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I.o <br />become fu~rnly establisheds. <br />Closed Access, the absence of Open Access, constitutes a power vested in cable - <br />telecommunication companies. This power, if not mitigated by government, can <br />result in a regime that determines how broadband gateway telecommunications <br />should develop. Closed Access grants the cable-telecommunication companies, <br />like AOL-Time Warner, a monopoly on the high-speed broadband platform. As <br />such, they have the ability to protect ,themselves from competitors by nat allowing <br />unaffiliated ISPs access to the broadband platform or by restricting or limiting <br />Internet traffic to unaffiliated competitive ISPs. <br />Common wisdom offers that the competitive marketplace, but not government <br />regulation, is the best means to assure widespread availability ofhigh-speed <br />Internet service. To make certain that a competitive mazketplace evolves, the <br />government should implement minimalist measures tv assure Open Access to the <br />broadband platform so that consumers can benefit from i) choice between content <br />providers, ii) lower prices and iii) improved service. <br />C. Financial .Aspects of the Deal for the CEOs <br />The deal creates several sets of multimillionaires and places Gerald Levin and Steve Case <br />squarely in the super wealth class. Recall that AOL is swapping 1.5 of its shares for each <br />Time Warner share. The day before the deal was announced, AOL stock was trading at <br />$7S per share, Time Warner was at $b4 per share. AOL is paying a bit above $ 110 a <br />share, a $4S premium over the pre-deal price of Time Warner. The merger represents a <br />good deal for Time Warner stock shareholders and Gerald Levin. The $110 price <br />increases the value of Levin's, unvested options by $12S million and the value of his <br />vested options by $240 million, total gain is $3S5 million. Steve Case is the clear winner. <br />The value of his unvested options exceeds $600 million, which he could not otherwise <br />sell unless AOL was traded to a new company. Mr. Case's vested options are valued at <br />near $775 million; his new found wealth approaches $1.375 billion6. <br />D. Public Poliey Questions to Consider <br />The questions for local government officials to weigh follow. <br />1. Without Open Access AOL-TW Internet service subscribers maybe directed first <br />to Company or affiliated content providers and would have to perform intense <br />gBroadband in the Public Interest, February 10, 2000 -Volume I, No. 7 <br />6Cable Carried Incentive for AOL Merger, Allan Sloaq Newsweek. <br />-6- <br />