More questions than answers

-- Broadcasting & Cable, 6/19/2000

We don't envy Washington policymakers these days. Over the next several years, they are going to have come up with answers to a bunch of tough questions about how the Internet should or should not be regulated.

Should Web sites and ISPs have a blanket copyright license so they can retransmit TV and radio stations? Should they be required to get a TV station's retransmission consent as cable and satellite TV now do? Should sites be penalized for facilitating copying of audio and video content? How about for collecting and selling information about their users?

And what restrictions and obligations, if any, should be imposed on the companies that control the final and critical high-speed Internet links to the home? Unlike some of the others, this is one question that the policymakers won't be able to put off for long. As documented in our cover story this week, it is being raised in the context of the AOL-Time Warner merger now pending before the FCC and the Federal Trade Commission.

We'll tell you right now that we don't have the answer-not yet anyway. But if the regulators granted every wish of every critic of the merger, AOL Time Warner would not roar into the future, but limp there. That's not to say the critics don't have some valid points.

Let's take caching, for instance. Disney wants assurances that its Web sites are cached or stored at Time Warner headends right alongside those of AOL Time Warner so that the Disney services look as good and are transmitted to homes just as quickly. If it doesn't get equal caching treatment, Disney fears, its Web services will be at a severe marketplace disadvantage, especially as the services fill with bandwidth-hogging video and audio.

If nothing else, the controversy surrounding the merger is crystallizing the issues of TV and radio in the Internet Age. Maybe AOL and Time Warner are right when they suggest it's a bad idea to make policy on the fly-as part of a merger review. And maybe the FCC and FTC agree. But sooner or later, the issues will have to be addressed in private negotiations among the companies or, that failing, in the public-policy arena.