Disney Seeks AOL Time Warner Limitations

The Walt Disney Company asked the Federal Communications Commission (FCC) late Thursday to place “meaningful and enforceable conditions” on the proposed merger between America Online and Time Warner.

The mega-merger, announced in January and set to be finalized later this year, would allow AOL’s 22 million subscribers access to Time Warner’s vast movie library, media content and cable assets.

Round Two

Disney’s request comes on the heels of a much-publicized dispute with Time Warner. Earlier this month, the media giant cut off cable access to Disney’s ABC programming in 11 cities for 36 hours after the companies failed to reach an agreement on transmission fees.

Still, according to company spokesman John Dreyer, Disney “is not opposing the proposed merger.” He added that the company believes that “spelling out what is acceptable and unacceptable is vital in this proposed merger so that consumers know what they’re getting.”

The company’s filing said that AOL Time Warner would be an “immediate risk to competition and consumers” and that the “commission must unequivocally prohibit discrimination by the merged AOL/Time Warner against unaffiliated content providers and Internet service providers.”

Washington Weighs In

The proposed merger has attracted scrutiny from other quarters as well. Earlier this week, U.S. Senators Herb Kohl (D-Wisconsin) and Mike DeWine (R-Ohio) expressed concerns about the merger in a letter to Federal Trade Commission (FTC) chairman Robert Pitofsky and FCC chairman William Kennard.

Chief among the lawmakers’ concerns is the possibility that AOL Time Warner would use technology to speed access to some Web sites, such as those owned by Time Warner, and slow access to other sites.

IM World Joins the Fray

Last month, AOL’s instant messaging rival iCast filed a complaint with the FCC alleging that the proposed merger “will hurt the instant messaging (IM) world by increasing AOL’s dominance in the market.”

According to iCast CEO Margaret Hefferman, “Allowing AOL to merge with Time Warner will only increase its ability to dominate and restrict consumers’ freedom of choice in instant messaging. AOL has already proven that while they pay lip service to the principle of openness, they are doing everything they can to build a wall around the instant messaging market.”

“Bullies are bullies and getting bigger rarely makes them more responsible,” Hefferman added.

AOL, Time Warner Issue Assurances

AOL and Time Warner have repeatedly issued assurances that the new company will not be anti-competitive. In February, the companies announced they had signed a “memorandum of understanding” providing that AOL will not be the exclusive Internet service provider on Time Warner’s cable systems.

Despite AOL’s recent ABC cut-off, the company maintains that AOL and Time Warner “are also committed to offering consumers a broad choice of the best content available regardless of who produces it, and to distributing our own content as widely as possible on as many platforms as possible regardless of affiliation.”

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