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15 <br />The combined revenues of the media giant are expected to exceed $30 billion. <br />Under the deal, Time Warner shareholders will receive l .5 shares of AOL-Time <br />Warner for each share of Time Warner stock. AOL stockholders will receive one <br />share of AOL-Time Warner stock for each share of America Online stock. The <br />market value of Time Warner is estimated to approach $97 billion and AOL is <br />currently valued at $164 billion. <br />AOL offers services in 15 countries and 7 languages. Time Warner, via CNN <br />serves 1 billion households world wide; it has 2.2 million CompuServe customers <br />and 120 million magazine readers. <br />~V. METHODOLOGY: <br />Time Warner's submission to the Franchise Authority was evaluated to determine <br />whether the operator provided information about the transferee consistent with the <br />procedures prescribed by the Federal Communications Commission. Both company <br />provided and public documents pertaining to the AOL and AT&T transactions were read <br />cazefully: Information furnished by the transferee was evaluated against similar <br />information known by the consultant as well as information gathered over time by the <br />consultant from trade journals and electronic information sources about the transferee's <br />chazacter, legal, technical, financial-business practices. <br />On occasion, discussions with Time Warner representatives were conducted to clarify <br />issues and concerns related to the transactions. in addition to the franchise authority, the <br />Federal Trade Commission conducts its own independent review of the transfer/merger. <br />FTC attorneys have the ultimate responsibility to assess the impact of the merger upon <br />the national competitive telecommunication environment. Both transactions, MediaOne <br />to AT&T and the AOL-TWI merger must be approved by the FTC. Any decision by the <br />franchise authority regazding the proposed transactions may be rendered moot, should the <br />FTC rule that one or both transfers are not in the public's best interest and issue an order <br />to disapprove either transaction. <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 />v. 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 Wamer's exceptionally branded content with the <br />geometrically expanding Internet world of America Online driven by its CEO <br />Franchise Fee U-Tax Auditing & Cable Television Administration <br />101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868 <br />