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8 <br />A thorough review of print and electronic media trade journals was performed to become <br />better acquainted with the various aspects of the transaction. <br />III. FINDINGS: <br />A. Time Warner -America Online <br />The merger is not about cable television per se, but about Time Warner's CEO, <br />Gerry Levin, merging Time Warner's exceptionally branded content with the <br />geometrically expanding Internet world of America Online driven by its CEO <br />Stephen Case. Time Warner needs AOL's experience moving content over the <br />Internet and AOL need's TIME WARNER's broadband pipe to grow its content <br />businesses. The merger represents the best of bath possible worlds for <br />entrepreneurial businesses. The merger is a vertical integration of the businesses <br />involved and it postures the new entity AOL-Time Warner as a dominant global <br />farce in the media entertainment business. Historically, vertical integration <br />results in preferential treatment by the common ownership entities to the <br />exclusion of other competing businesses. Continued vertical integration of <br />content, intellectual property owners, and conduit, Internet-telecommunication, <br />providers may severely disadvantage unaffiliated businesses and result in <br />predatory service rates. <br />The preeminent concern relates to Open Access. Consumer gaups feaz that cable <br />operators, such as Time Warner and AT&T, offering high-speed cable modem <br />Internet access could control access to the Internet and imperil the low cost <br />ubiquitous nature of the Internet. Significant reputable consumer and industry <br />groups, such as the Consumer's Federation of America, the Center for Media <br />Federation in America and the OpenNet Coalition, raised the flag on this issue to <br />demand an "open accessz" platform. <br />The US Congress and local governments brought sufficient pressure to beaz upon <br />the parties whereby on February 29th, AOL and Time Warner issued a MOU or <br />Memorandum of Understanding (Exhibit A) committing their cable network to an <br />open access standazd to offer consumers a choice between unaffiliated Internet <br />Service providers. <br />ZThe ability of consumers to choose between and among multiple Internet Service Providers on a <br />high-speed cable (television) telecommunication broadband platform. <br />Franchise Fee U-Tax Auditing & Cable Television Administration <br />101 Pocono Lane, Cary, North Cazolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868 <br />