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Telecommunications industry

Internet Users' Choices Under Threat from Pending Mergers

Strategic Insights

— 1 min read

The future of Internet users' choices in various aspects such as entertainment, political candidates, and viewpoints may be severely limited due to the pending mergers between AT&T Corp. and MediaOne, and America Online Inc. and Time Warner Inc. Several participants in a Center for Media Education roundtable discussion warned about the potential loss of choice when a few media companies control the majority of broadband Internet services. The participants also urged the federal government to recognize that its failure to regulate these services allows market forces to decide, ultimately contributing to a more restrictive online society.

Key Takeaways:

  • The pending mergers between AT&T Corp. and MediaOne, and America Online Inc. and Time Warner Inc. could lead to a loss of choice for Internet users in various aspects such as entertainment, political candidates, and viewpoints.
  • The mergers would result in a handful of media companies controlling the majority of broadband Internet services, limiting consumer choice.
  • The federal government's failure to regulate these services contributes to a more restrictive online society.
  • AOL's previous support for open access, which allows ISPs to use cable companies' networks to offer broadband services, should be used against the company now that it has turned its back on the open-access fight.
  • The AT&T-MediaOne merger creates a communications juggernaut with enormous proportions, which could kill competition and choice.
  • The cable industry has never behaved competitively, and the largest cable companies are joint-ventured in various aspects.
  • The focus should be on the way the Internet's architecture embeds certain providers over others, which enables discrimination.
  • Government inaction encourages the problem of limited choice and favors corporate interests.
  • Internet content filtering is another issue that arises when a few large ISPs control most Internet access, potentially reducing content choice for large numbers of people.

Statistics:

  • 25 percent: The amount of Time Warner Entertainment investing in MediaOne.
  • 80-90: The percentage of teenagers and young adults who use AOL.
  • 10-20: The number of major Internet Service Providers (ISPs) that will control 90% of the market.
  • 3-4: The number of major cable companies that control 60% of the market.

Sources:

  • Reported by Newsbytes.com, http://www.newsbytes.com.
  • Center for Media Education roundtable discussion.

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