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Consumer Groups Plead for Open Broadband Policy

Consumer groups are lining up to show their disdain for the proposed America Online Inc. , Time-Warner Inc. merger on the eve of the Senate Judiciary Committee's initial review of the transaction.

Tuesday the Senate Committee on the Judiciary, under the chairmanship of Senator Orrin Hatch (R-UT), will begin its formal review of the proposed $160 billion merger.

Chairman Hatch said when the deal was announced Jan. 10 that it could have profound public policy implications. The Utah Republican called for caution before embracing it.

The Consumers Union, Consumer Federation of America and Media Access Project agree that the deal should be scrutinized. The group's fear that a conflict of content and conduit may create severe ramifications for broadband Internet access policy in the U.S., should the online giant and the media mogul marry.

CU, CFA and MAP leaders Monday released a detailed analysis of their official filings on open access to the broadband Internet by America Online (AOL) and AT&T Corp. in the U.S.

The study details how AOL and AT&T (T) reversed their position on open access since announcing plans to purchase major cable companies. The groups are asking that lawmakers thoroughly review the AOL-Time Warner deal, because AOL and AT&T have not delivered on promises to deliver open access to broadband networks.

Mark Cooper, CFA research director, said enforcement, not broken promises, is the essential to make open access work.

"Before AOL and AT&T bought cable companies, they both argued vigorously for government-backed obligations to provide open access to cable," Cooper said. "They no longer do, although they still support such a legal obligation on facilities owned by other companies."

Gene Kimmelman, co-director of CU's Washington office, said AOL and AT&T have done a policy flip-flop.

"They are asking policymakers to take a hands-off approach to open access, claiming they can be trusted to do what they previously claimed could only be done through regulation," Kimmelman said. "The companies have made honesty an issue. We believe it is appropriate to scrutinize whether these companies can be trusted."

Andrew Jay Schwartzman, MAP president, said open access must be enforced for the Internet to continue to thrive through the innovations made by independent service providers.

"Thousands of innovative ISPs serving entrepreneurs and millions of individual citizens will never be able to purchase their own cable wires," Schwartzman said. "Those ISPs still need the protections that these two huge corporations once demanded."

AOL backed away from its commitment to open up access to proprietary cable networks earlier this month. Prior to its January proposal to buy Time Warner (TWX), America Online had been a longstanding proponent of open access. As a result of the policy shift, AOL instructed its lobbyist to stop pushing for state legislation that would require open access in Virginia, Michigan, Maryland and Pennsylvania.

AT&T pledged its commitment to open access late last year. The telecom titan said that due to its exclusive contract with Excite@Home, open access would not be possible until the agreement expired in June 2002. Meanwhile, AT&T signed a letter of intent that would grant broadband cable access to

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