Disney's response to AOL/TWX Merger...
LOS ANGELES (CBS.MW) -- The supposed losers in the America Online-Time Warner
merger tried to sound like winners Thursday after the Federal Trade Commission's approval of
the $111 billion merger.
Walt Disney Co. (DIS: news, msgs), Qwest Communications International Inc. (Q: news,
msgs), Yahoo Inc. (YHOO: news, msgs) and small Internet service providers all sounded notes
ranging from cautious optimism to near glee, saying the FTC's ruling accomplished what they
hoped.
The FTC ordered that America Online Inc. (AOL: news, msgs)
and Time Warner Inc. (TWX: news, msgs) keep open Time
Warner's formidable network of cable lines. The panel wanted to
ensure access to coming broadband technologies for a number of
Internet service providers, not just AOL.
In addition to a recent deal struck with Earthlink Inc. (ELNK:
news, msgs), AOL-Time Warner must open their lines to two
other service providers within 90 days, and others after that. The
FTC also is appointing a monitor to keep track of compliance.
Perhaps the most optimistic words came from the most unlikely
source: Disney. Sounding almost Al Gore-esque, the
entertainment giant offered a gracious statement after it had
strongly protested the merger throughout the approval process.
"The unprecedented open access
and non-discrimination conditions
imposed by the FTC today
represent a huge victory for
consumers and for competition,"
said Preston Padden, Disney's
executive vice president for
government relations, said in a
statement.
"With these safeguards in place, we congratulate AOL and Time Warner on their merger and
wish them well," the statement went on to say. "We look forward to working with the newly
combined company in all areas, including the development of new media."
After balking at first on a comment, Yahoo officials later echoed Disney's statement.
"The AOL and Time Warner pending merger clearly endorses
the value of the Web," the company said in a statement. Yahoo
officials said advertisers will see the Web as a legitimate
platform as a result of this deal.
But Steve Davis, senior vice president of policy and law at
Qwest, was a little more cautious. He reserved comment until he
saw further word from the FTC on the conditions.
Davis agreed that Time Warner, the nation's second-largest cable
provider, is going further to open its lines than any other cable firm. But he said it might be a
small victory.
"Saying this goes farther than any other deal is a pretty low bar," Davis said. "(But) it's an
opportunity to get the issue to the forefront."
The FTC voiced strong concerns about the ability to keep
broadband access open to all users.
"I believe this was an illegal merger that was remedied by this
order," said Richard Parker, director of the commission's bureau
of competition. "There will never be a time AOL has a
first-mover advantage on this platform."
At least one small Internet service provider said he was
encouraged by the deal. Steve Heins, director of marketing for
NorthNet Inc., a small Internet provider in Oshkosh, Wis., has been a vocal opponent to the
merger in recent weeks. Heins has sent a number of letters on the deal to various media outlets
warning of the deal's dangers.
"I think it is more than we expected to get two or three days ago," Heins said of the FTC
conditions. "I think our efforts paid off."
Heins said there were eight provisions that he was pleased with, including the creation of a
monitor, an enforceable right to negotiate access, First Amendment protections for content and
a complaint hotline direct to the FTC.
