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The recently consummated merger of America Online and Time Warner concluded a year-long struggle over the nature of monopoly power and open access in the broadband age. This battle, which pitted consumer advocates and corporate competitors alike against the twin media giants, ultimately yielded several important safeguards. Chief among these: the guarantee of open access to the cable network for rival Internet service providers, a similar provision barring discriminatory treatment of interactive television traffic, and a monitoring system to handle complaints from the new AOL Time Warner’s competitors.

But despite such safeguards, another even more important battle looms on the horizon. At stake is the future and form of the Internet for millions of Americans whose access to the online world comes through the set-top portals of cable television. Instead of the multivaried pathways of the World Wide Web, these users will be provided easy access to a much smaller subset of items and options that reflect the network owner’s online programming, as well as the offerings of its content partners. Dubbed “walled gardens” by supporters and skeptics alike, these new “managed-content areas” will therefore offer the illusion of online choice, while leading subscribers down well-worn paths of proprietary content and affiliated programming-in stark contrast to the great diversity of expression the Web seemed to promise in its heyday, way back in, say, 1997.

In their filings with the Federal Communications Commission during the merger-review process, AOL and Time Warner offered a chilling glimpse into this new online world by speaking rhapsodically of “next-generation branded content” and “powerful e-commerce applications.” Presumably, these will be the financial fruits-for the cable networks and their content partners-of the new walled gardens.

But AOL and Time Warner were much less forthright concerning the nature of these services-because their very existence puts up walls that will separate cable subscribers from the vast expanses of the Internet (or, at the very least, discourage all but the most adventuresome users from straying too far). This is because the underlying architecture of the new cable broadband networks, offered through sophisticated set-top boxes under the guise of “interactive television,” will permit network owners to favor their own online fare over that of their competitors. Menus, on-screen icons and the local caching of featured content (to speed its delivery) will all come into play, as the once-level online playing field is tilted sharply toward the network owner’s interests.

It was none other than the Walt Disney Company (itself no stranger to aggressive behavior in the media marketplace) that warned of the potential abuse of this power during the AOL-Time Warner merger review. By controlling both programming and the pipes through which that programming is delivered, Disney pointed out, the merged company would have “undeniable economic incentives and opportunityto favor its own affiliated content and to discriminate against unaffiliated content providers.”

That argument worked, at least in part. The strictures ultimately imposed on AOL Time Warner by the Federal Trade Commission-forcing it to provide unrestricted access to other Internet service providers and interactive television traffic-all but precluded it from exercising such control over its competitors. But the newly formed company reaches only 20 percent of all cable households in the United States, while the rest of the vast and still-growing cable market continues to operate without these restraints. Moreover,  judging from the claims of those who will actually be building new interactive TV systems-the networking hardware, software and “middleware” vendors whose products will likely establish the ground rules for the broadband future-the potential for abuse is great.

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