GE threatened to file anti-trust charges against AOL-Time Warner for their efforts to demote the more popular CNBC to channel 66 or was it 64? At least that is what Kernan and Haines were joking about this morning....They said it would be the first antitrust lawsuit over channel placement...
AOL and Time Warner both abuse their dominant positions. But Time Warner especially has contributed millions for years to politicians. They are the third biggest contributor to the Senate Judiciary Committee. Schumer is on the Senate Judiciary Committee, he is also a Senator from NY, home of Time Warner..
Just do the math...even with Microsoft's increased political contributions since '98; when this antitrust case was filed; their competitors still give at least four times as much. So who will the politicians root for...
In 2000 MSFT gave $4 million versus $11 million for the competitors - Sun, ORCL, IBM, AOL, ProComp, SIIA, CIIA, Technet, Novel, Netscape etc...And that does not include Time Warner
And this administration new attorney general- Charles James just said he will 'carry on' just like Klein...
U.S. "Antitrust Chief Sees No Policy `Sea Change"
by William Selway
Washington, Aug. 2 (Bloomberg) -- "Charles James, the head of the U.S. Justice Department's antitrust division, said he won't enforce antitrust laws much differently than his predecessor, Business Week reported, citing an interview with the official."
quote.bloomberg.com
"As President George W. Bush appointed pro-business nominees to several key posts, observers expected he would appoint someone to head the antitrust department who was more less aggressive than Joel Klein, the former chief who started the case against Microsoft Corp., the magazine reported.
``I don't really anticipate there will be any sea change in enforcement policy,'' James said, according to the magazine. ``The antitrust division has been left in very good shape by Joel Klein,'' he told the magazine.
An older article, nothing has changed...
"AOL once led the charge to make cable operaters provide open access; then they bought Time Warner, the number 2 cable provider in the US, they no longer thought it was a good idea to force cable operators to open up." from "Merger Puts AOL's Methods on Trial -
Rivals Decry What Analysts Praise as Regulators Ready Their Verdict"
washingtonpost.com
..."As it turned out, Time Warner also is a tough negotiator. Or so Heins realized when he heard from the company six months later. In an August term sheet, Time Warner said it would give NorthNet access to its cable lines, but only if Time Warner received 75 percent of the Internet service provider's revenue from all subscriber fees, the lifeblood of NorthNet's business."
"Time Warner also wanted 25 percent of NorthNet's revenue from other sources, such as advertising and other e-commerce fees, even though they were not transactions directly related to Time Warner's cable business. In addition, Time Warner wanted approval control over NorthNet's home page. The terms were so onerous that they effectively undermined AOL and Time Warner's open access pledge, Heins contends. "It was a profit squeeze that probably made [using Time Warner's cable lines] a money losing proposition from the get-go" for NorthNet, he said."
"Some other companies received similar Time Warner offers, including EarthLink Inc., the nation's second-largest Internet service provider; another Wisconsin firm; and about 40 small companies in Texas.. When asked about the offers, Time Warner insisted that the term sheets were only starting points in its negotiations."
"Regardless, some analysts say, Time Warner was well within its rights to offer whatever it wanted to. After all, Time Warner's cable lines, which serve about 20 percent of the market, are not a public works project, but a private enterprise. Time Warner took the financial risk to spend billions of dollars over the past several years to build up its cable network, and naturally it wants a return on its investment, analysts say
Microsoft is a private enterprise too, but if they even tried to rip off customers or OEM's like that; the DOJ would have shut them down within days. AOL-Time Warner owns the media and the analysts and buys PR firms to spin it all. However I did hear Rob Enderle, one of the many MSFT bashers, say it would be political suicide for a politician to try to block Windows XP now...I guess it all depends on what the media tells the gullible public...
Case said: " The merger of AOL and Time Warner will benefit consumers and serve the public interest," he said in written remarks to the FCC. Case went on to assure the regulators reviewing the merger that AOL does not--and will not--favor its own Web content over that of its rivals."
AOL contracts with Walt Disney Co. have suggested otherwise. Critics raised questions about AOL's public statements after revelations last month that AOL has imposed contractual conditions on Disney in recent years that aimed to deter users from leaving AOL's online network to reach competitors on the Web.
Under one contractual provision, Disney's ABC News unit agreed in 1997 to deter users from leaving the AOL network by limiting or removing specially highlighted connections called hyperlinks to other Web sites. If 25 percent or more of the traffic left AOL's offerings, AOL could cancel the contract.
The Disney contracts only fueled the fear of rivals who say AOL has erected a "walled garden." By keeping consumers within the AOL network, opponents say, AOL can attract more advertising revenue, which it can use to create more content and attract more users.
"No other [Internet service provider] has created the kind of walled garden they have," said Preston Padden, Disney's top lobbyist. "They say in public they're in favor of consumer choice, then they write contracts to remove navigation links that can only be characterized as reducing consumer choice."
AOL says it did nothing wrong. "The idea that AOL has a walled garden is a bunch of bunk," said Paul Cappuccio, the company's senior vice president and general counsel. "We succeed precisely because we make it is so very easy for consumers to reach whatever content they want, whether it's Disney, Time Warner, ours or anyone else's."
Since its merger was announced on Jan. 10, AOL has been locked in an escalating feud with competitors on another front: instant messaging. For months, AOL has said it is working on ways that would make its AOL Instant Messenger service interoperable with other instant-messaging services. Instant messaging allows users to send short notes to each other in real time over the Internet.
But rivals say AOL has done virtually nothing to help other messaging systems connect to its own. Odigo Inc., a New York instant-messaging firm, says that since May AOL has blocked users of Odigo's instant-messaging system from communicating with AOL's instant-messaging system more than 25 times.
"AOL counts 61 million users of Instant Messenger. It also offers an instant-messaging system called ICQ, which has about 80 million users. Together, they account for as much as 90 percent of the market, according to some industry estimates. Until recently, AOL executives have played down the economic potential of instant messaging. At a congressional hearing in September, Case said, "We've always viewed it as a feature, not a business."
But company documents emerged last month showing that AOL does recognize the potential. AOL accused Prodigy Communications Corp. of improperly linking its instant-messaging system to AOL's, interfering with what AOL called its "prospective economic advantage."
Critics say AOL's intransigence is restricting innovation and consumer choice. Imagine the harm, they say, if one company controlled all the telephone lines.
"But some analysts applaud AOL for defending its instant-messaging system. In part, they say, it's a matter of protecting an investment. In 1998, AOL acquired ICQ for nearly $300 million, which at the time seemed like a steep price. Now that AOL has built a lead in the field, why should it give it up?" |
