BUSINESSWEEK ONLINE : JULY 17, 2000 ISSUE
INFORMATION TECHNOLOGY Would AOL Time Warner Be Anticompetitive? The Federal Trade Commission and the Federal Communications Commission are studying whether the marriage of these two would create a powerhouse so big it would thwart competition. Here's what they're looking at: TOO COZY WITH AT&T AOL Time Warner and AT&T, the nation's No. 1 cable operator, are deeply entwined through AT&T's 9% stake in Time Warner and its 25.5% ownership of Time Warner Entertainment. Competitors, such as BellSouth and SBC Communications, worry this will lead to anticompetitive deals. One possible example: AOL Time Warner could get exclusive use of AT&T's cable system to deliver interactive TV. DOMINATING CONTENT AND ITS DELIVERY AOL is the dominant online service, while Time Warner is the No. 2 cable operator. Time Warner owns four of the most popular cable channels: CNN, TBS, TNT, and the Cartoon Network, as well as HBO, the leading premium cable network. Competitors, including Disney and RCN, fear that AOL Time Warner would favor delivering its own content over its broadband cable system and Internet service instead of rivals' programs. RULING INTERACTIVE TV Rivals, such as Disney and SBC, fear that AOL Time Warner will use its dominance to squeeze out competitors in the next incarnation of the Internet--interactive television, where consumers get Web access on their TV sets along with TV programming. Because AOL Time Warner would control the pipes that deliver I-TV, it could favor its interactive content and services. GOVERNING INSTANT MESSAGING With 90 million people signed up, AOL is a powerhouse in instant messaging, which allows consumers to send instantaneous e-mails to each other. Rivals, including Microsoft and startup Tribal Voice, say AOL unfairly blocks other companies' customers from exchanging instant messages with AOL's users, thus preventing competing services from thriving. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS A Real Test for Trustbusters TABLE: Would AOL Time Warner Be Anticompetitive? INTERACT E-Mail to Business Week Online

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