America Online says it will voluntarily adhere
to principles that it asked the government to mandate just a year
AOL chief Steve Case, appearing before the same Senate panel he
did last year, said Thursday that the marketplace has answered the
problem he had brought to lawmakers one year earlier. Back then, he
had urged government action to ensure competition on high-speed
That was before AOL made its plan to acquire Time Warner, which
gives the Internet provider a massive network of high-speed cable
pipes for itself over which to deliver its service.
In the second Capitol Hill hearing this week about the company's
$133 billion merger, Case said he still remains committed to giving
consumers a choice of providers for the next generation of
super-fast Web connections.
"I've been very consistent on this issue," he told the Senate
The Federal Communications Commission and lawmakers chose not to
step in when AOL asked that other cable operators offering Internet
service be forced to open their lines to competing providers. In
the meantime, the market has started to address those issues, Case
"Maybe it shows that the Congress and the FCC are smarter than
I," Case said.
AOL and Time Warner earlier this week promised to open up their
cable television lines to other Internet service providers. Some
senators questioned Thursday whether that pledge would hold without
any binding agreement.
"You could make a determination to change it," said Sen.
Richard Bryan, D-Nev.
But Case and Time Warner chief Gerald Levin insisted that the
policy makes good business sense and that a definitive agreement
would be forthcoming.
"The consumer really wants more choice than an AOL service on
Time Warner systems," Levin said.
Other senators raised concerns about creating one company for
both media content and the delivery of that content.
AOL, with more than 20 million subscribers, is the nation's
largest Internet provider. Time Warner is the biggest media
conglomerate, with Time magazine, Warner Bros. studios, HBO and
"We're going down the Microsoft route that has got them in
court," said Sen. Ernest Hollings, D-S.C.
"Our country could be left with only a handful of major media
companies," said Robert Lande, senior research scholar at the
American Antitrust Institute.
AOL also was questioned about claims that it was not working
toward an industrywide solution to make its popular instant
messaging service work with similar services provided by other
Officials from AT&T;, ExciteAtHome, MSN.com and others had sent a
letter to Commerce Committee leaders earlier this week accusing AOL
of blocking consumers of rival service from exchanging instant
messages or real-time text over the Internet with AOL's 50
Case refuted the claim and noted that AOL broadly licenses its
software to other companies to build their own messaging service.
Asked also about the need for legislation to ensure consumer
privacy on the Internet, Case said he wasn't opposed to such an
effort if it is the only way to rein in companies not willing to
But, he added, "it would be better if companies could do it on