By any standard, the proposed merger of America Online and Time Warner, currently under review in Washington, is enormous. Even in this era of mega-mergers, the marriage of the world’s largest Internet service provider (ISP) and the largest media conglomerate (which directly controls almost one-fifth of the nation’s cable subscribers and which, through a relationship with AT&T, has a stake in another 30 percent) stands out above the rest. What we don’t see, however–or rather won’t see, so extensive is the web of mergers and acquisitions, joint ventures and “co-branded properties” that ensnares the mass media today–may be the biggest story of all: the transformation of the Internet into a collection of commercially driven “walled gardens.”
Given cable’s clout (roughly two-thirds of all households currently subscribe), the broadband networks that AOL-TW, AT&T and other cable operators are in the process of introducing will very likely become the Internet delivery platform of choice for most Americans in the years to come. Wireless and satellite broadband transmissions are still two to three years off, and even if the phone companies’ new digital subscriber line (DSL) connections manage to maintain their small broadband market share (roughly 20 percent), cable’s fatter pipes will allow it to win the race to deliver the rich-media content of the next-generation Internet.
While the basic structure of the Internet itself won’t change–it will range as far and wide as ever–the means through which subscribers gain access to its varied resources, using systems modeled on cable’s closed video platform, will gradually constrict. New forms of interactive television, offering what amounts to “Internet Lite” via proprietary set-top boxes, will substitute ease of use for freedom of choice, featuring what AOL-TW euphemistically refers to as “next-generation branded content.” Over time, as cable broadband takes hold, the Internet for most Americans will evolve into what media historian Ben Bagdikian predicts will be “the biggest shopping mall in the world.”
Before he bought his way into the cable market, AOL’s Steve Case was a leading figure in the movement to break the cable industry’s stranglehold on the growing broadband market. But on the day AOL became an owner of cable with the announcement of its merger with Time Warner, that changed. In the words of TW’s Gerald Levin, “We’re going to take the open access issue out of Washington and out of City Hall and put it into the marketplace.” In other words, AOL-TW, AT&T and other cable giants will remain the Internet’s ultimate gatekeepers. In the absence of new regulatory safeguards, there’s nothing to prevent cable operators from narrowly defining the Internet experience for their subscribers in any number of ways. The cable ISP, for example, can determine both the “start page” at which the user’s online travels begin and the onscreen “real estate” and navigational menus, in which the user makes programming choices. It will even be possible for network operators to manage online traffic to expedite the delivery of affiliated content while relegating competitive material to second-class service.
Unfortunately, the FCC under chairman William Kennard has thus far taken a hands-off position. FTC chairman Robert Pitofsky appears to be much more keenly aware of what’s at stake. In the next few weeks, the FTC and the FCC will decide what kinds of conditions, if any, need to be imposed on the merger. Although formally opposed to the AOL-TW alliance, a coalition of consumer and public interest groups has asked that–if it is to be approved–there be at least two basic safeguards. One would require AOL-TW to agree to a policy of open access and nondiscriminatory transport, insuring that competitive ISPs and websites would have a legal right to use the company’s broadband pipes–including the set-top boxes that will become the crucial link between cable’s past and interactive television’s future. The other would cut the ownership ties between AOL-TW and AT&T. Without new cross-ownership restrictions, these two affiliated companies would have a chokehold on high-speed Internet content and distribution.
Open access to the broadband Internet is essential if we are to insure that a diverse range of voices has a chance of reaching out to citizens in the new era of high-speed communications. And once such access is secured, public-interest, nonprofit and other alternative voices must be prepared to offer interactive programming that will make a difference. For in the new world being created by AOL-TW and others, that kind of programming, free of brand identification, product tie-ins and other e-commerce opportunities, simply won’t be on the agenda.
