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8 <br />The US Congress and local governments brought sufficient pressure to bear upon <br />the parties whereby on February 29~', AOL and Tune Warner issued a MOU or <br />Memorandum ofUnderstanding (Exhibit A) committing their cable network to an <br />open access standard to offer consumers a choice between unaffiliated Internet <br />Service providers. <br />The MOU will allow independent ISPs to sell Internet portal and content services <br />directly AOL-Time Warner customers thereby establishing a direct link between <br />the ISP and the customer. Road Runner (RR) will be among the ISP choices <br />available to AOL-Tune Warner customers. <br />Absent the MOU, the merger could have enhanced the parties (AOL, Time <br />Warner and AT&T) ability to restrict or even cut off customers from gaining <br />access to Internet based competition. Because the MOU was "freely" offered by <br />the parties, the Federal Government has withdrawn Open Access as a condition of <br />merger approval. <br />The new company will have lots of cash, lots of customers, Tats of content, and <br />unmeasurable values like the synergy produced by crass-marketing web sites to <br />television to magazines. Management has been slow to announce operating plans. <br />Since the merger announcement, AOL has dropped about a third of its value, but <br />it will continue to attract new investors. Once the merger has been completed, <br />AOL-Time Warner will find itself well-positioned with cash flow that will grow <br />faster than a traditional cable or Internet company. <br />B. MediaOne - AT&T ,, <br />USWest, a farmer Regional Be11 Telephone Company (RBOC), made a corporate <br />decision in the 1990s to enter the cable television business. They purchased the <br />assets of multiple system providers (MSOs), such as Colony Cable as well as a <br />25% interest in Time Warner Entertainment. USWest named its cable division <br />MediaOne. Recently, USWest decided to concentrate on its core business, <br />telephone service and decided to divest itself of its cable television assets.. <br />Simultaneously, AT&.T, a long distance telephone company, received authority <br />from the federal government to provide local telephone service. AT&T reasoned <br />that they could either lease `Bell' lines or deploy their awn network. AT&T <br />decided to pursue the third alternative, to purchase cable systems and use those <br />wires to provide local and long distance telephone service to its customers and <br />compete against the Bell telephone companies and GTE. <br />-4- <br />