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July 27, 2000


Re:En Banc Hearing, Applications of America Online, Inc. and Time Warner, Inc. for Transfers of
Control (CS Docket No. 00-30)

I'm very pleased to be here this afternoon to hear what our distinguished panelists have to say about this proposed merger. I would also like to thank each of you for taking the time to appear before us today to discuss the very important issues this merger presents.

More than any other potential consolidation in recent memory, the proposed merger of AOL and Time Warner has captured the attention of the American public. One need only to look across this crowded room - or outside today on Twelfth Street - to witness firsthand the passions and fears that have been aroused by the possible merger of these two communications giants.

And for good reason. Currently, 2.7 million subscribers have high-speed broadband Internet access. It is projected that 16 million Americans will have high speed Internet access as of 2002 and 33% of U.S. households will have broadband high-speed access by 2003 Ultimately, this merger could ordain the essential nature of the broadband services that Americans receive. Will the merger deliver on the promises that have been made, including accelerated broadband deployment, innovative services, and a continued commitment to multiple broadband platforms? Will it usher in the anticipated convergence of the Internet with television, and unleash all of the intriguing possibilities therein? Or will it instead, as others contend, potentially impair the competitive, consumer-driven evolution of these technologies?

These are some of the major issues I eagerly anticipate hearing our panelists address today.

I'd also like to take a moment to discuss our perspective for reviewing mergers. We are not the only agency looking at this merger, and I welcome views on what the Commission's role ought to be in reviewing this deal. We are all here today because Congress has mandated that this Commission investigate whether approval of transactions such as this one are in public interest. As in all such transactions, we have a duty to verify that this merger will violate neither the Communications Act nor any of our rules. Moreover, as this Commission has indicated in other recent merger decisions, and in keeping with our statutory obligations, we also must examine whether this merger will frustrate the implementation or enforcement of the Communications Act, or interfere with progress toward any of this agency's statutorily directed objectives. Finally, the merging parties must also persuade us that this merger will yield clear public interest benefits, such that consumers will be made better off.

In their applications before us, AOL and TW claim that their union will accelerate the deployment of existing advanced services, and further, that the merger will enable and spur the creation of many new services. Innovation certainly lies at the heart of what this industry is seeking to accomplish for consumers, and we encourage the Applicants to bring their visions fully to life this morning.

Meanwhile, opponents of the deal have identified a variety of potential harms that allegedly may arise out of this merger. These include, but are not limited to, detrimental effects in markets for video programming, interactive television, instant messaging, electronic programming guides, Internet access services, and in local telephony. These opponents have further alleged that this merger threatens to stymie other efforts this Commission is undertaking--such as to foster the development of multiple broadband platforms, or to promote small business involvement in the telecom sector--by raising entry barriers. We look forward to hearing directly from those who hold these concerns.

We at the FCC believe that the heart and promise of the Internet since its inception has been openness. Indeed, the Internet's open protocols as well as FCC decisions not to regulate the Internet and to open up access to the phone network have spurred the Internet's amazing growth.

The World Wide Web has made once inaccessible information available to all and supplied local businesses with unfettered access to global markets. It has fostered an environment where everyone's voice can be heard.

I would hope that the proposed AOL-TW deal would only expand on this remarkable openness. I am very concerned about the issue of open access - so much so that we are opening a separate proceeding on the subject - and I very much want to hear what you have to say about it.

We should also scrutinize closely what effect this merger would have in closing the Digital Divide and allowing ever more Americans entry into the Information Age.

When it comes to openness, I do believe today's review is a debate about means and not ends. Everyone here agrees that platforms should be open: It's mainly a question of how we get there.

Finally, on the subject of openness, I want to mention that today's FCC review differs from those of other agencies in one key respect: This hearing is specifically intended as a public proceeding. During my tenure at the FCC, we have strived to open up these merger reviews and increase public input in the process. I believe it is imperative that the public gets this chance to listen to all the details and implications of the AOL-TW merger and to voice their hopes and concerns about such an important transaction.

I look forward to listening to and learning from the panelist's views on all sides of the issue today, and I trust that all parties involved share my ultimate commitment to doing what's best for the American consumer.