FCC eyes AOL-TW

Commission asks for more info, sets July 27 hearing
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How tight a grip AOL-Time Warner will have on the broadband and cable industries is getting increased scrutiny at the FCC.

The FCC last week announced it will hold a hearing on the deal July 27. And as a sign of the fed's determination to gauge the merger's impact, the five commissioners themselves will run the proceedings, rather than the Cable Services Bureau staffers who have been doing the frontline duty on the merger review.

"This merger is going to require a lot of work," Cable Bureau Chief Deborah Lathen told reporters last week. The $181 billion merger would create the country's largest media company and one that, critics say, would have power to choke off cable- and Internet-distribution networks to rival programmers and content providers.

Because of that concern, public advocacy groups are stepping up their push for open-access rules that would require cable companies to let rival Internet service providers connect to their broadband networks (see story, page 14).

On a more ominous note for company officials, the agency also asked for detailed information by July 17 on exclusive contacts AOL and Time Warner have with Internet-content providers and the identity of all companies in which AOL or Time Warner hold a 5% or greater ownership interest and all partnerships with other companies.

The FCC hasn't been shy lately about forcing companies to shed their affiliations with rival conglomerates.

In that vein, the agency also has asked company officials to describe the ties their merged company and its AOL-TV will have with Hughes Network Systems' DirecTV and DirecPC. AOL has a large stake in Hughes through a $1.5 billion investment in General Motors, and consumer groups argue that the merger will lead to less vigorous competition between Time Warner cable systems and rival multichannel provider DirecTV.

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