Rivals pleased, look ahead to competition He added that "forced" access would delay and discourage investment in cable broadband upgrades. "In the end, forced access amounts to corporate welfare and consumers will be the losers," said ACT president Jonathan Zuck. Moreover, analysts argue that AOL is a master at wooing new customers, and that in five years the market will likely still be ripe for growth, and, no doubt, higher prices.īut the Association for Competitive Technology, an advocacy group for the technology industry, condemned the conditions, arguing that they could have significant impacts on the deployment of broadband Internet service. He said that - along with the companies - consumers and electronic producers will be winners if the deal is approved. Henry Blodget, Internet sector analyst with Merrill Lynch, said that he had expected the company to pursue almost all of these practices on its own, and that most will have no significant affect on its strategy or financial performance.īlodget said AOL intended to open access to Time Warner's cable lines in any case, so the concessions won't adversely affect the merger. "This will probably be the template that other cable operators keep their eye on." "This is the precedent," said SG Cowen media analyst Ed Hatch. In addition, AOL Time Warner must not interfere with content passed along the networks it has contracted to other ISPs.Īnalysts were somewhat surprised by the heft of the FTC terms, but saw them as the price paid for blazing this new trail where advanced technology and distribution meet. "The commission reserves the right to approve the second and third ISP - we don't want any weak sisters," Pitofsky told a press conference, adding that the FTC can appoint a monitor to keep tabs on AOL Time Warner's actions. It must then offer two other service provider options shortly after AOL launches its offering. Under terms of the agreement, AOL Time Warner must offer its subscribers the option to sign up to at least one nonaffiliated cable, high-speed Internet service provider via Time Warner's cable system before AOL itself begins offering such service. consumers have broadband links to the Internet. With this agreement, the FTC in effect sketched a blueprint by which other agreements involving high-speed access may be judged, even though less than five percent of U.S. Time Warner shares also closed higher, rising $1.90 to $74.50. Shares of America Online rose after the approval was announced, and closed at $50.00, up $1.65, after trading as low as $47.92 earlier on Thursday. "This order is intended to ensure that this new medium, characterized by openness, diversity and freedom, will not be closed down as a result of this merger," Pitofsky said. "In the broad sense, our concern was that the merger of these two powerful companies would deny to competitors access to this amazing new broadband technology," said Robert Pitofsky, chairman of the FTC, in a statement.Ĭlick here to read a copy of the FTC statement. The agreement between the companies and the government will remain in effect for five years. The FTC's vote came after an 11th hour-agreement by AOL and Time Warner aimed at safeguarding competition in high-speed Internet access, a key sticking point with opponents of the deal. Time Warner is the parent company of CNN and CNNfn. With a vote of 5-0, FTC commissioners approved the much-contested deal, which marries AOL ( AOL: Research, Estimates), the world's biggest Internet-service provider, with Time Warner ( TWX: Research, Estimates) a media conglomerate with major stakes in the publishing, film, broadcast and cable television markets. However, it sets up years of FTC monitoring as AOL Time Warner, as the new company will be called, offers "broadband" Internet access over its cable TV lines to more and more customers.ĬNNfn's Greg Clarkin reports from Washington on AOL-Time Warner merger. The unanimous nod from the FTC, the nation's competition watchdog, pushed the deal one giant leap closer to its completion. NEW YORK (CNNfn) - The Federal Trade Commission Thursday approved America Online's proposed $111 billion acquisition of Time Warner after the companies agreed to a series of unprecedented concessions aimed at protecting competition in the high-speed Internet access business. ![]() 14, 2000Ĭompetition watchdog FTC approves media marriage, but with conditions FTC approves AOL, Time Warner merger - Dec.
0 Comments
Leave a Reply. |