Agenda - 05-16-2000-9d - Laserfiche WebLink

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7 On occasion, discussions with Time Warner representatives were conducted to clarify issues and concerns related to the transactions. In addition to the franchise authority, the Federal Trade Commission conducts its own independent review of the transfer/merger. FTC attorneys have the ultimate responsibility to assess the impact of the merger upon the national competitive telecommunication environment. Both transactions, MediaOne to AT&T and the AOL-TWI merger must be approved by the FTC. Any decision by the franchise authority regazding the proposed merger and sale may be rendered moot, should the FTC rule that one or both transfers are not in the public's best interest and issue an order to disapprove either transaction. A thorough review of print and electronic media trade journals was performed to become better acquainted with the various aspects of the transaction. V. FINDINGS: A. Time Warner -America Qnline The merger is not about cable television per se, but about Time Warner's CEO, Gerry Levin, merging Time Warner's exceptionally branded content with the geometrically expanding Internet world of America Online driven by its CEO Stephen Case. Time Warner needs AOL's experience moving content over the Internet and AOL need's TIME WA.RNER's broadband pipe to grow its content businesses. The merger represents the best of both possible worlds for entrepreneurial businesses. The merger is a vertical integration of the businesses involved and it postures the new entity AOL-Time Warner as a dominant global force in the media entertainment business. Historically, vertical integration results in preferential treatment by the common ownership entities to the exclusion of other competing businesses. Continued vertical integration of content, intellectual property owners, and conduit, Internet-telecommunication, providers may severely disadvantage unaffiliated businesses and result in predatory service rates: . The preeminent concern relates to Open Access. Consumer groups feaz that cable operators, such as Time Warner and AT&T, offering high-speed cable modem Internet access could control access to the Internet and imperil the low cost ubiquitous nature of the Internet. Significant reputable consumer and industry groups, such as the Consumer's Federation of America, the Center for Media Federation in America and the OpenNet Coalition, raised the flag on this issue to demand an "open access2" platform. zThe ability of consumers to choose between and among multiple Internet Service Providers on a high- speed cable (television) telecommunication broadband platform. -3-