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AOL-Time Warner Merger Opponents Set to Air Concerns at FCC HearingAired July 27, 2000 - 1:06 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU WATERS, CNN ANCHOR: In Washington this hour, opponents of the Time Warner-America Online merger are arguing about their concerns. Critics say the $120 billion proposed deal could affect what we see when we tune in and log on. Time Warner, as you know, is the parent company of CNN.
And CNN national correspondent Bob Franken has more on the story.
BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): What do you get when you cross a massive new-media company and a massive old- media company? Nobody knows exactly, but the competition believes that a huge AOL-Time Warner hybrid could squeeze them out.
PRESTON PADDEN, ABC-DISNEY: Our greatest fear is that a combined AOL-Time Warner will restrict consumer choice in ways that favor their own content and services.
FRANKEN: As the Federal Communications Commission considers the proposed AOL-Time Warner merger, the hearing is a battle of the corporate titans. The challenges are coming from the likes of Disney- ABC and NBC, owned by General Electric. Both have filed petitions before the FCC. They charge that AOL-Time Warner could concentrate too much power in too few hands and give preferential access to its own news and entertainment products on the vast, new combined cable/Internet network.
NBC and Disney-ABC want guarantees outside materials such as theirs will not be frozen out or shoved aside, and that consumers, as a result, will not be denied the widest possible selection of entertainment, technology, interactive shopping and news. AOL and Time Warner officials insist that couldn't happen.
STEVE CASE, CHMN. & CEO, AMERICA ONLINE: We provide access to everything. That's really what people are expecting if -- and it's, we think, the right thing to do in terms of building this medium. It's also the right thing to do in terms of building our business. If we were constraining choice, we would whither as a service.
FRANKEN: ABC's petition calls for the Time Warner cable systems to be split off from its divisions which provide programming for those systems. Other corporations demand agreements that include them as new, high-speed, high-capacity Internet technology develops.
The AOL-Time Warner executives have promised that their two companies would become one by autumn, but first they must successfully maneuver past FCC hearings and an FTC investigation into antitrust questions.
FRANKEN: Those are just two of the efforts, Lou, to make sure that the vast world of new media have more than one ruler -- Lou.
WATERS: Bob, what practical guarantees are the networks looking for? Steve case has already told the Senate Judiciary Committee there'll be open access. Is the suggestion here that we need government regulation?
FRANKEN: Well, that's exactly the suggestion. What the people who are opposed to this merger are trying to do is not necessarily stop it, but have the government entities such as the FCC put conditions on it, restrictions -- binding restrictions, actually, as opposed to just commitments from the executives. In effect, they're saying they don't trust them to live up to those commitments.
WATERS: And there's a hard move by the Disney Corporation for one -- that's the parent company of ABC Television -- with producing a videotape which we understand has been circulating around up there. What can you tell us about that?
FRANKEN: Well, Disney has been very, very, very straightforward about its staunch opposition to all this. Of course, this fight broke out into the open during that battle over placing Disney or ABC channels on some of the Time Warner cable systems.
But Disney has put out a videotape that has been circulating the Hill, as you said, which raises the questions about whether AOL and Time Warner have any intention of providing access to the Time Warner- AOL systems when it's all complete. The stakes are very high. We're talking about interactive shopping, we're talking about placement of programs, et cetera, et cetera. The complaint is that at least AOL- Time Warner would give its many entities favored treatment. And that is the kind of issue that is being discussed today. And Disney has even gone to the point of coming out with that video, which is getting a lot of notice.
WATERS: All right, Bob Franken covering the FCC hearings which are about to get under way.
We'll keep you posted throughout the day of any developments.
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