Statement of Senator Patrick Leahy, Ranking Member, Senate Judiciary Committee, AOL/Time Warner Hearing

February 29, 2000

This proposed merger reminds me of "A Tale of Two Cities" with portents of either the best of times or the worst of times. Today we get to ask questions to try to shed light on this proposal and the future.

Will this merger of the largest online service provider with a global information entertainment giant give consumers exciting new choices of multimedia content and e-commerce applications over their combination TV and computer screen?

To put this in more concrete terms, will this merger speed up the day when I am able to use a single screen and remote to watch the latest Warner Brothers' Batman movie, pause the movie to check my e-mail or to coordinate a family reunion online with our children in Vermont and California, simultaneously use instant messaging technology to find and purchase the cheapest airplane tickets back to Vermont for the reunion, and then return to the movie before finishing up with a cut from my favorite Grateful Dead album or Carlos Santana's "Supernatural"?

Or, will the consequence of this merger be that consumers will see their choices of Internet service providers dwindle and their viewing and listening choices over high-speed cable lines limited or directed toward AOL and Time Warner's favored content?

Will customers of the conglomerate company get a single bill that bundles the costs of high-speed Internet access through AOL, AOL's Instant Messenger technology, and access to Time Warner's music and video-programming catalogues and penalizes purchases from other sources? If customers want to use an alternative Internet service provider or listen to a Grammy Award winner who was not a Time Warner artist, will they have to pay more or wait longer? As one observer put it: "Together AOL and Time Warner have the potential to cross-exploit and cross-promote their assets to create a media monster. Push the Time Warner content through the AOL gateway and the AOL content through the TV screen."

When the proposed merger was announced several weeks ago, I cautioned that we would all want to consider how this development might help fulfill the promise of the Internet age, or constrain it.

Evaluating the potential effects on competition from this proposed merger forces us to look into the future. I thank both Jerry Levin and Steve Case for coming today to describe for us what they envision for the future. We will have an opportunity to explore the agreement that they are announcing today about the availability of Time Warner's cable platform to other Internet service providers. This afternoon we begin to flesh out the ways in which open access can translate into nondiscriminatory arrangements for Internet service providers, content providers and others. Finally, I will want to explore the issue of privacy. As we move ever closer to the time when our TV watching, Internet surfing, electronic messaging, and shopping take place using the same device, tracking our personal tastes and activities will be much easier. Every time we press a button on that remote in the future, what we will be doing can be tracked for information on the films we like to watch, the music we like, the services and items we like to buy online, and the people we communicate with regularly. This is valuable information to companies who spend millions on advertising and valuable to me and others who cherish our privacy.

I will want to hear how a merged AOL and Time Warner plan to use the information they will be able to collect on their customers and how they will protect their customers' privacy. Technology should always be our servant, not our master. Technological progress, conglomeration and globalization should not force us to sacrifice the personal privacy that Americans hold dear.