Consumers Union: FTC Pact With AOL Time Warner Is A "Landmark Agreement" That Could Bode Well For Internet Competition

Press Release
Thursday, December 14, 2000

Contact: Gene Kimmelman/David Butler
(202) 462-6262
Consumers Union Washington DC Office

CONSUMERS UNION: FTC PACT WITH AOL TIME WARNER IS
A "LANDMARK AGREEMENT" THAT COULD BODE WELL FOR INTERNET COMPETITION

WASHINGTON, D.C. -- Gene Kimmelman, Co-Director of Consumers Union's Washington DC office, today made the following statement in response to the Federal Trade Commission (FTC)'s unanimous vote in favor of the merger of the world's largest Internet service provider, America Online, Inc., and the nation's largest media and cable conglomerate, Time Warner, Inc.:

"This is a landmark agreement that could bode well for competition on the Internet. It begins to open competition in the market for high-speed Internet service, and it offers some protection for competition in the emerging market of interactive TV. For the first time, there will be accountability to the public for opening these markets to real competition.

"We commend FTC Chairman Robert Pitofsky and his fellow commissioners for standing firm on the issue of 'open access' -- the practice of allowing Internet service providers (ISPs) to lease access to cable lines so they can offer high-speed Internet service. We believe the FTC's open access requirements are sound and hopefully will provide adequate safeguards for consumers. "Thanks to this open access agreement, consumers should be able to count on having a variety of choices among ISPs and, eventually, interactive TV vendors. This agreement demonstrates that cable companies can open their networks to other Internet providers, and we believe this will prove to be the best model for competition and consumer choice in the future. This also provides a powerful incentive for the Federal Communications Commission (FCC) to apply the same standards to all ISPs and interactive TV vendors.

"While we are generally pleased with this agreement, we remain concerned about the overlapping ownership interests between AT&T and Time Warner, the nation's two largest cable providers that together have interests in cable systems serving more than half the consumers in the country. We are disappointed that this agreement doesn't do more to unravel the relationships between these two cable monopolies, but we will continue to press our concerns with the FCC. We believe the FCC is in the best position to require a separation of ownership between these cable giants and enhance opportunities for competition."

Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers

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