LEVIN HITS GOVT. AOL-TW MERGER REVIEW AND ITV INQUIRY
AOL Time Warner CEO Gerald Levin lambasted federal govt. for taking one year and one day to approve AOL’s purchase of Time Warner in Jan., calling it “outrageous” that FTC and FCC took so long and scrutinized merger way they did. In wide-ranging stage interview with CNN’s Larry King at NCTA convention in Chicago Wed., Levin took federal agencies to task for “trying to apply 19th century concepts to 21st century reality” in merger review. “So many of these rules were put in place at a time to take care of a situation that doesn’t exist anymore,” he said. Without naming them directly, he criticized such rival media powerhouses as Disney and Viacom for lobbying for strict merger conditions while pursuing regulatory relief for themselves, calling it not “good form.”
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Levin also took issue with federal agencies for exploring possible imposition of rules on nascent interactive TV (ITV) market and his company’s ITV plans. While he has been “enthralled” with ITV for 20 years, he said, it’s still so amorphous that “nobody can tell you what it is” yet. He ridiculed notion that regulators effectively could shape competitive landscape this early in ITV’s development. “It’s very hard to answer antitrust questions for an area that hasn’t developed,” he said.
Stung by consumer group and phone company criticism of AOL Time Warner’s refusal to air commercials for rival DSL service on its high-speed cable lines, Levin went on offensive on issue and questioned critics’ motives. He argued that company, like any other media outlet, enjoyed full right to carry or not carry any ads that it chose. He also said “certain [broadcast] networks” have rejected commercials for his company’s HBO service for years. “I don’t get it,” he said. “There is no issue here. Zero. Period. Full stop.” Insisting that cable modem service was superior to DSL service, he said brouhaha over DSL ads “illustrates to me that cable modems must be selling like hotcakes.”
Questioned about interest in buying major broadcast network, Levin said he strongly doubted that AOL Time Warner ever would do so. “I would say no,” he said, noting that broadcasters badly need “another revenue stream” to survive in modern era. Professing his love for cable, he predicted basic cable networks could “surpass broadcast networks” soon in Nielsen ratings and said cable channels already offered superior programming. He declined comment on speculation that his company’s CNN and either CBS or ABC might merge some of their news operations but called it “not surprising” that 2 broadcasters would be interested in CNN and its worldwide, 24-hour operation.
Levin, describing himself as “a media nerd of some sort” who gets “tingly, teary” watching CNN and HBO, waxed euphoric about potential of video-on-demand (VoD). He said company, which has been tinkering with VoD in several cable markets and plans to unveil HBO’s new subscription VoD (SVoD) service in 2 markets this summer, sees bright future for on-demand services. “I believe all television will be distributed either real-time or on-demand,” he said, emphasizing that he meant everything ever written for TV. He argued that “on-demand system” of Internet had laid groundwork for VoD.
On other issues, Levin: (1) Contended media violence, like stem cell research, should not be political issue debated in election campaigns. (2) Said AOL Time Warner would sell all its Warner Bros. stores to focus on licensing and merchandising its characters: “I never liked the retail business.” (3) Said he didn’t believe bigness was problem but expressed concern about bad stuff creeping in when he opened up company for expansion. (4) Asserted that cable ownership cap, now suspended and under review at FCC, impaired free speech rights of companies such as his. (5) Predicted, fresh off business trip to China, that Mandarin/Chinese would replace English as predominant language on Internet over time. (6) Advised other American business executives to go beyond globalization and embrace one-world concept that views U.S. as just one piece of large planet. “Stop thinking as an American,” he said. “Just change your point of view.”