IP: Re: AOL TW MoU on "open access" [comments welcome djf]

[Dave Farber <farber@cis.upenn.edu>]

>X-Sender: jwarren@mail.well.com
>Date: Tue, 29 Feb 2000 11:01:08 -0800
>To: farber@cis.upenn.edu
>From: Jim Warren <jwarren@well.com>
>Subject: Re: IP: AOL TW MoU on "open access" [comments welcome djf]
>
>This widely-hyped AOL Time Warner publicity release smells like nothing
>more than political horse-apples, hoping to defuse well-founded
>congressional and FTC opposition to the merger of these two monoliths:
>
>1.  It is NOT a binding agreement.  It is nothing more than a highly
>publicized "intention."  There is no requirement to implement it, and if
>implemented, no restraint against later modifying or retracting it -- after
>the guv'ment lets AOL and Time Warner merger into a single cable-ISP cartel
>with monopoly control over much of the nations' one-and-only broadband
>cable systems in most of the communities they serve.
>
>2.  It says they "will make" -- sometime, somehow -- *some* kind of open
>access to other ISPs.  For instance, pay us enough money to compete with
>half of our company, and we'll let you on the cable systems that AOL-TW
>would own, if allowed to merge.  Or they could take a lesson from the
>regional phone companies and simply stonewall providing full access to
>competitors (even four years after the 1996 Telecom "Reform" Act "forced"
>them to do so; and with AOL-TW, there's no legislated force, at all).
>
>3.  The only "*binding* definitive agreement" they propose is to allow AOL,
>*alone*, to provide ISP services on TW's massive area-cable monopolies.
>But once merged into a single company, there'd be no need for such an
>agreement.
>
>4.  That agreement "will be used as a model for the *commercial*
>agreements" with AOL's competitors.  For instance, maybe only the price and
>quality of carrier service would change.
>
>5.  They are "committed to offer consumers a choice among multiple ISPs."
>That's about like IBM offering a choice between DOS operating systems on
>their original PCs -- the one from Microsoft came with the computer without
>extra cost; the other DOS OS came from Digital Reserarch Inc., that was the
>dominant DOS company of the time -- but at extra cost.  Surprise!  MS
>became the 800-pound gorilla that years of anti-trust litigation has been
>unable to tame, while DRI died an ignoble death.  We have *every* reason to
>believe that AOL-WT would offer the same kind of "choice" for AOL's
>competitors.
>
>6.  Phrases such as "will make" and "is the intention" and "will not be"
>are legal-beagle hypotheticals.
>
>7.  AOL has already illustrated its idea of "a quality consumer
>experience."  Its current client software "accidentally" makes it
>impossible for many users to reach many of AOL's competitor ISPs ... a
>problem so widespread that there are now class-action lawsuits moving
>forward against AOL for it's irresponsible "quality consumer experience."
>
>8.  Since when is a division (AOL) within a single corporation (the merged
>AOL-TW) considered merely "affiliated" with it?  They *propose* that, "AOL
>Time Warner will not discriminate in those economic arrangements based upon
>whether or not the ISP is affiliated with AOL Time Warner."  This makes
>sense only as long as AOL is *not*, itself, simply part of a single AOL-TW
>corporationy.
>
>9.  They say, "AOL Time Warner will allow ISPs to provide video streaming."
>So what?  For a high enough premium price, they would probably allow
>[some?] ISPs to do almost anything.
>
>10.  In one part of this legal gibberish, they say AOL-TW will allow ISPs
>to offer services on a "regional or local basis," and in the very next
>sentence they say they will "*not* allow ISPs to [serve] only a portion of
>an AOL Time Warner cable system."
>
>Near the end, they finally admit that their memorandum only "represents an
>initial step [to define] terms, conditions and parameters" for TW cable
>customers to access non-AOL ISPs.
>
>In other words, it's just non-binding, fully-revocable smoke blown for the
>FTC and Congress critters who are showing well-justified doubt about the
>trust/cartel nature of the *proposed* merger between AOL and TW.
>
>--jim, Jim Warren; jwarren@well.com
>Contributing Editor & technology public-policy columnist, MicroTimes Magazine
>Also GovAccess list-owner/editor; 345 Swett Rd, Woodside CA 94062
>   voice/650-851-7075; fax-for-the-quaint/650-851-2814
>
>[self-inflating puff: Hugh Hefner First-Amendment Award, Playboy Foundation;
>Electronic Frontier Foundation Pioneer Award (in its first year);
>James Madison Freedom-of-Information Award, Soc.of Prof.Journalists-Nor.Calif
>founded InfoWorld; the Computers, Freedom & Privacy Conferences; etc etc etc.]