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Regulators Quiet on Antitrust Case

January 11, 2000

WASHINGTON (AP) _ Regulators who may have to approve a mega-deal between Time Warner and AOL were noticeably quiet Monday, but the proposed merger received a chilly reception on Capitol Hill.

The Federal Communications Commission declined to comment on whether the proposed merger would trigger a fullscale review by the commission. The FCC typically looks at whether deals involving communication companies are in the public interest. That evaluation is separate from the review conducted by antitrust regulators.

The Justice Department said it was unclear whether it or the Federal Trade Commission will be asked to evaluate the proposed merger for antitrust concerns. Each agency has its own group of antitrust experts, and they typically split regulatory reviews after deciding among themselves whose experts are most appropriate.

Some observers predicted that the deal would clear regulatory hurdles, namely because it involves two companies operating in distinct arenas.

``There are enough players who also do this stuff that I don’t see anything incredibly onerous about it,″ said Kip Martin, an analyst with Meta Group, based in Stamford, Conn. ``There are lots of other content-creators, and a lot of other access mechanisms out there.″

Matthew Fairshter, an antitrust lawyer based in Pasadena, Calif., also said he didn’t anticipate any major roadblocks now. But the combined entity could eventually give rise to concerns about rival Internet companies getting equal access to cable TV lines over which to deliver their services, he said.

``I’m not sure that this has any big road bumps to get over,″ Fairshter said. There ``could be some concerns about access to the Internet.″

Members of Congress voiced those very worries on Monday.

``At some point, all of this concentration and convergence has implications for consumers because it will minimize competition and choice, giving us fewer voices and fewer pipelines in the marketplace,″ said Sen. Patrick Leahy, D-Vt, the Senate Judiciary Committee’s top Democrat. ``What we should do is to make sure that all that information does not become funneled and controlled by just two or three sources.″

Senate Judiciary Chairman Orrin Hatch, R-Utah, said his committee would study the merger carefully and expected to be briefed by representatives from both companies this week. Other members of the committee’s antitrust panel said they would hold hearings.

Some lawmakers and consumer advocates took announcement of the massive merger as an opportunity to renew their push for a national policy requiring cable companies _ like AT&T and a combined AOL/Time Warner _ to give rivals equal access to cable lines over which to deliver high-speed Internet connections.

``From a policy standpoint, consumer choice must be fostered for Internet-based telecommunications services,″ said Rep. Ed Markey, D-Mass., a member of the House Commerce telecommunications subcommittee.

The openNET Coalition, a lobbying group of which AOL is a key member, said it will continue to press the federal government to require that cable companies share their lines with competing Internet providers.

The FCC, thus far, has declined to do so, saying it prefers to let the marketplace resolve the issue.

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