Agenda - 06-29-2000-5b - Laserfiche WebLink

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9 The MOU offers that AOL-TW will allow independent ISPs to sell Internet portal and content services directly AOL-Time Warner customers thereby establishing a direct link between the ISP and the customer. Road Runner (RR) will be among the ISP choices available to AOL-Time Warner customers. This commitment is non-binding, nor does it suggest unaffiliated providers will be able to gain access to the broadband platform on terms that are equivalent to those offered affiliated companies. Because the MOU was "freely" offered by the parties, the Federal Government has withdrawn Open Access as a condition of merger approval. The new company will have lots of cash, lots of customers, lots of content, and unrneasurable values like the synergy produced by cross-marketing web sites to television. to magazines. Management has been slow to announce operating plans. Since the merger announcement, AOL has dropped about a third of its value, but it will continue to attract new investors. Once the merger has been completed, AOL-Time Warner will find itself well-positioned with cash flow that will grow faster than a traditional cable or Internet company. On Apri125th, Consumer groups3 demanded a major restructuring of the proposed Time Warner - AOL merger because it would create dominate the Internet market and consumers would have fewer choices for Internet services and content. The fear is that the combined companies would offer only AOL's service on Time Warner's broadband cable modem platform; thus, blocking rival Internet service providers nondiscriminatory access to its customers via the cable system. Although the companies entered into a Memorandum of Understanding, see Exhibit I, pledging to open up their cable TV lines to other Internet service providers, consumer groups want "hard" assurances that any unaffiliated ISP would have access to the high-speed cable modem platform at "reasonable terms and conditions." This concept is known as "open access," and it has been the source of significant public policy debate across the country. With regard to the Open Access issue, a new United States District Court decision (MediaOne Group, Inc. et al v. County of Henrico, Virginia) was issued May 10, 2000. The Court ruled that a local government's authority on the Open Access issue is preempted by the Federal Cable Act. Last year, another United States District Court in Oregon held that a local government's authority on Open Access is not preempted by the Federal Cable Act, AT&T. Corp., et al v. City of Portland, aConsumer Federation of America, Consumers Union, etc. Franchise Fee U-Tax Auditing & Cable Television Administration 101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868