It’s official. America Online will get to take over Time Warner, now that the FCC has signed off on the massive buyout.
The FCC’s approval, like the Federal Trade Commission’s earlier okay of the deal, came with some conditions. The question now is whether the conditions are useful and, if they are, whether AOL will ultimately honor its side of the deal. I have my doubts in both areas.
AOL Time Warner will be a powerhouse. It will control vast swaths of news and entertainment content, far more than any rival. There’s still some competition in this arena, anyway.
But AOL will control the way millions of customers view entertainment and information in the Digital Age, notably via cable TV systems that are one of the two most prominent ways Americans will obtain high-speed Internet access. And in its domination of instant-messaging, AOL will hold the key to one of tomorrow’s primary communications systems.
The FTC and FCC approvals go part of the way toward requiring AOL to make good on its promises not to abuse that power. In particular, the FCC has won AOL’s commitment to truly make its instant-messaging system interoperable with systems run by Internet rivals. But the conditions, while welcome, will be difficult to enforce — and they are far too limited.
The FCC only asks AOL to be interoperable with other messaging systems when and if it adds video to its own instant messaging. There’s no requirement to work with other providers in today’s text-based systems or, apparently, even a future audio-based operation.
Maybe the Bush administration’s appointees to the regulatory agencies will decide not to enforce the Clinton-era deals, anyway. That kind of thing has happened before.
Ultimately, even if you believe the Bush people will enforce the agreements, you should be wary of AOL’s intentions. The company has such overwhelming power and has already shown a willingness to abuse it. Its cynical stalling on making its instant-messaging system interoperable is the action of a company that understands — and plans to hang onto — the enormous value of its dominance.
The States Go to Work
The Wall Street Journal reports today that 20 states are opposing Orbitz (paid registration required to read this story), an online joint venture of major airlines. Leading the charge are the people who are going to take the consumer-protection lead in the next few years.
They are the state attorneys general, and they’re worried about Orbitz because of its enormous potential for collusion among the major carriers. Keep in mind that the airlines have a history of playing games with fares, including the infamous — and taped — offer a few years ago by one airline head to raise fares as soon as another carrier did so.
Good for the attorneys general. Online reservations are terrific. But this particular system looks anticompetitive.
Rupert Murdoch, Right Wing Hero, Versus Family Values
It never comes as a surprise anymore that Fox Television, which lives on slimy programming, has created yet another gutter-dwelling show. The latest is Temptation Island, which the Washington Post notes is not worth watching even if you’re a voyeur.
The premise for this garbage is that you collect four supposedly devoted couples at a resort and hire a bunch of willing single people to tempt them to stray from their supposed monogamy. Now that’s family values for you.
It would be less nauseating if Rupert Murdoch, the corporate media baron who runs News Corp., which owns Fox TV, weren’t such a right-wing maven. As hypocrites go, he’s in the top rank.
California Power Woes
The Calfornia Independent System Operator has declared a Stage Three alert today. This means rolling blackouts are a real possibility.
It’s not clear that Californians understand just how bad the energy situation has become. It’s utterly plain that east of the Rockies there’s almost no comprehension — except at the highest levels of government.
When you see emergency meetings that include the U.S. secretary of the treasury, you begin to grasp that the nation is on the brink of major-league trouble. The people in charge got us into this disaster. Let’s see if they have the ability to help us out.