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Letter from Rep. Bob Goodlatte (R-VA) and Rep. Rick Boucher (D-VA) to FCC Chairman William Kennard and FTC Chairman Robert Pitofsky.
Re: AOL Time Warner merger, rule making proceedings, and HR 1685 and HR 1686.
Date: September 7, 2000.
Source: Office of Rep. Bob Goodlatte.

September 7, 2000

The Honorable William E. Kennard
Federal Communications Commission
Washington, D.C. 20554

The Honorable Robert Pitofsky
Federal Trade Commission
Washington, D.C. 20580

Dear Chairman Kennard and Chairman Pitofsky:

We are writing regarding your consideration of the pending AOL-Time Warner merger. We understand that the Commissions are giving consideration to placing conditions on the merger related to the issue of "open access" for Internet Service Providers. We are concerned that the application of such conditions without a comprehensive federal policy in place on this important issue could have detrimental effects on the current Internet marketplace and prove destructive to the fundamental structure of the Internet.

As strong supporters of open access policies for all high-speed Internet platforms, and the authors of legislation to require such policies, we are very interested in your consideration of this issue. Without the ability to choose an Internet Service Provider, Americans will lose the diversity of content and variety of options that make the Internet the revolutionary tool it is today. The Internet's highly competitive, decentralized and open marketplace will disappear, and the entrepreneurial spirit which has fueled the economic boom of the last decade will disappear with it. Instead, the Internet will be hijacked to benefit a select few, and the vast majority of Americans will be relegated to the sidelines. It is the ultimate irony that as we enter the information age, we face a possible scenario where the information is not as valuable as the wires, cables, and satellites that transmit it.

Ideally, the solution to this problem would be found through marketplace activity. However, the various technologies that are offering high-speed Internet service, including telephone, cable, satellite, and wireless technologies, are implementing open access policies at different rates. Some companies may actually be moving away from open access policies, seeking to vertically integrate and maximize the usage of their own services by limiting consumer choices or tying them to usage of the technology. Therefore, reliance on the various markets to self-implement open access policies is unrealistic at this time. Instead, these circumstances necessitate immediate government action.

In June, the Ninth U.S. Appeals Court in San Francisco reversed a lower court's ruling and found that the city of Portland, Oregon did not have the authority to require AT&T to open its cable plant to competing Internet service providers. The court found that local franchise authorities cannot regulate cable Internet services because those services are fundamentally telecommunications services and not cable services. In fact, in those states within the jurisdiction of the Ninth Circuit, open access is the law today by virtue of existing telecommunications regulations. This has created a regulatory disparity between the Ninth Circuit and the Federal government. As a result of the decision, the issue of open access and the corresponding disparity has been placed squarely (and appropriately, in our view) before the Federal government to resolve.

We introduced legislation in March of 1999 because it was clear, even at that time, that a comprehensive and national open access policy was necessary to avoid the marketplace scenarios that are becoming increasingly commonplace. The legislation that we have introduced uses existing antitrust law to encourage the private sector to implement their own open access policies. While we believe that our legislation is preferable to regulatory action, it has become clear that Congress is unlikely to act on our legislation in the remaining days of the 106th Congress. In addition, the various technologies are moving toward implementing open access at different speeds, none of which are acceptable. We therefore feel that it is critical that the FCC act immediately to formulate effective open access policies that apply to all of the various technologies offering high-speed Internet access.

We understand that following the Portland decision, the FCC announced the initiation of proceedings to look at open access issues. While we applaud this move, we urge the FCC to augment this study by initiating an official rulemaking that will consider all technologies currently offering high-speed Internet service and apply open access comprehensively to all technologies.

In addition, because the FCC will be evaluating the open access status of the various technologies during this rulemaking, placing conditions on any single merger before that evaluation is complete would be premature. No Federal agency should be picking winners and losers in the high-speed Internet marketplace. Forcing a merged AOL-Time Warner to allow competitors access to its cable systems while allowing those same competitors to refuse AOL-Time Warner access to their networks would place AOL-Time Warner at a crippling disadvantage.

Fair and equal application of the laws toward the various Internet technologies is critical to the maintenance of efficient and productive markets. Should the FCC or FTC require that a single company in a single high-speed Internet technology implement an open access policy, uncertainty in the marketplace would skyrocket. Unless the FCC is prepared to eventually apply similar conditions to all providers of high speed Internet service, we urge both commissions to refrain from imposing such conditions until a formal rulemaking can be completed. In this case, the ends of open access do not justify the means of applying it to one company at a time. As we begin the new century, we hope that we can work together to ensure that the qualities that made the narrowband Internet revolution a success - open access, low regulation, and high competition - remain fundamental characteristics of the new broadband Internet revolution.


Bob Goodlatte
Member of Congress
Rick Boucher
Member of Congress

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