UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
____________________________________
)
In the matter of )
)
America Online, Inc., )
a corporation, )
) File No. 001 0105
)
and )
)
Time Warner Inc., )
a corporation. )
____________________________________)
AGREEMENT CONTAINING CONSENT ORDERS
The Federal Trade Commission ("Commission"), having initiated an
investigation of the proposed merger of Respondent America Online, Inc. ("AOL")
and Respondent Time Warner Inc. ("Time Warner"), and it now appearing that AOL
and Time Warner, sometimes referred to as "Proposed Respondents," are willing
to enter into this Agreement Containing Consent Orders ("Consent Agreement")
to enter into certain agreements and providing for other relief:
IT IS XXXXXX AGREED by and between Proposed Respondents, by their duly
authorized officers and attorneys, and counsel for the Commission that:
1. Proposed Respondent America Online, Inc., is a corporation organized,
existing and doing business under and by virtue of the laws of the State of
Delaware, with its office and principal place of business located at 00000
XXX Xxx, Xxxxxx, Xxxxxxxx 00000.
2. Proposed Respondent Time Warner Inc. is a corporation organized, existing
and doing business under and by virtue of the laws of the State of
Delaware, with its office and principal place of business located at 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
3. Proposed Respondents admit all the jurisdictional facts set forth in the
draft of Complaint here attached.
4. Proposed Respondents waive:
a. any further procedural steps;
b. the requirement that the Commission's Decision and Order and Order to
Hold Separate, attached hereto and made a part hereof, contain a
statement of findings of fact and conclusions of law;
c. all rights to seek judicial review or otherwise to challenge or
contest the validity of the Decision and Order or the Order to Hold
Separate entered pursuant to this Consent Agreement; and
d. any claim under the Equal Access to Justice Act.
5. Proposed Respondents shall submit an initial report within thirty (30) days
after they execute this Consent Agreement and every thirty (30) days
thereafter until the Decision and Order becomes final, pursuant to Section
2.33 of the Commission's Rules, 16 C.F.R. 'SS' 2.33, signed and verified by
the Proposed Respondents setting forth in detail the manner in which the
Proposed Respondents have prepared to comply, are complying, and will
comply with the Decision and Order and Order to Hold Separate. Such reports
will not become part of the public record unless and until the Consent
Agreement, Decision and Order, and Order to Hold Separate are accepted by
the Commission for public comment.
6. Because there may be interim competitive harm, the Commission may issue its
Complaint and Order to Hold Separate in this matter at any time after it
accepts the Consent Agreement for public comment.
7. This Consent Agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
Consent Agreement is accepted by the Commission, it, together with the
draft of Complaint contemplated hereby, will be placed on the public record
for a period of thirty (30) days and information in respect thereto
publicly released. The Commission thereafter may either withdraw its
acceptance of this Consent Agreement and so notify Proposed Respondents, in
which event it will take such action as it may consider appropriate, or
issue or amend its Complaint (as the circumstances may require) and issue
its Decision and Order, in disposition of the proceeding.
8. This Consent Agreement is for settlement purposes only and does not
constitute an admission by Proposed Respondents that the law has been
violated as alleged in the draft of Complaint here attached, or that the
facts as alleged in the draft Complaint, other than jurisdictional facts,
are true.
9. This Consent Agreement contemplates that, if it is accepted by the
Commission, the Commission may (1) issue and serve its Complaint
corresponding in form and substance with the draft of Complaint here
attached, (2) issue and serve its Order to Hold Separate, and (3) make
information public with respect thereto. If such acceptance is not
Page 2
subsequently withdrawn by the Commission pursuant to the provisions of 'SS'
2.34 of the Commission's Rules, 16 C.F.R. 'SS' 2.34, the Commission may,
without further notice to Proposed Respondents, issue the attached Decision
and Order, in disposition of this proceeding. When final, the Decision and
Order and the Order to Hold Separate shall have the same force and effect
and may be altered, modified or set aside in the same manner and within the
same time provided by statute for other orders. The Decision and Order and
Order to Hold Separate shall become final upon service. Delivery of the
Complaint, Decision and Order, and Order to Hold Separate to Proposed
Respondents by any means specified in Commission Rule 4.4(a), 16 C.F.R.
'SS' 4.4(a), shall constitute service. The Proposed Respondents waive any
right they may have to any other manner of service. The Complaint may be
used in construing the terms of the Decision and Order and Order to Hold
Separate, and no agreement, understanding, representation, or
interpretation not contained in the Consent Agreement, Decision and Order,
or Order to Hold Separate may be used to vary or contradict the terms of
the Decision and Order or the Order to Hold Separate.
10. By signing this Consent Agreement, Proposed Respondents represent and
warrant that they can comply with the provisions of the attached Decision
and Order and Order to Hold Separate, and that all subsidiaries,
affiliates, and successors necessary to effectuate the full relief
contemplated by this Consent Agreement, the Decision and Order, and the
Order to Hold Separate are parties to the Consent Agreement.
11. Proposed Respondents have read the proposed Complaint, Decision and Order,
and Order to Hold Separate contemplated hereby. Proposed Respondents
understand that once the Decision and Order has been issued, they will be
required to file one or more compliance reports showing that they have
fully complied with the orders. Proposed Respondents agree to comply with
the proposed Decision and Order from the date they sign this Consent
Agreement. Proposed Respondents understand that they may be liable for
civil penalties in the amount provided by law for each violation of the
Decision and Order and Order to Hold Separate after they have become final.
Page 3
Signed this 13th day of December, 2000
AMERICA ONLINE, INC. FEDERAL TRADE COMMISSION
/s/ Xxxxxxx X. Case
BY: BY:
---------------------------------- -----------------------------------
Xxxxxxx X. Xxxx Xxxx X. Xxxxxx
Chairman and Attorney
Chief Executive Officer Mergers III
Bureau of Competition
APPROVED:
/s/ Xxx Xxxx
-------------------------------------- -----------------------------------
Xxx Xxxx Xxxxxxxxx X. Xxxxxxxxxx
Counsel for America Online, Inc. Deputy Assistant Director
Mergers III
Bureau of Competition
TIME WARNER INC.
/s/ Xxxxxx X. Xxxxx
-------------------------------------- -----------------------------------
Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Chairman and Assistant Director
Chief Executive Officer Xxxxxxx XXX
Bureau of Competition
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------- -----------------------------------
Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxxx
Counsel for Time Warner Inc. Deputy Director
Bureau of Competition
/s/ Xxxxxx Xxxx /s/ Xxxxxxx X. Xxxxxx
-------------------------------------- -----------------------------------
Xxxxxx Xxxx Xxxxxxx X. Xxxxxx
Counsel for Time Warner Inc. Director
Bureau of Competition
Page 4
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS: Xxxxxx Xxxxxxxx, Chairman
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxxx X. Xxxxx
__________________________________
)
In the matter of )
)
AMERICA ONLINE, INC., )
a corporation, )
) Docket No. C-
and )
)
TIME WARNER INC., )
a corporation. )
)
__________________________________)
DECISION AND ORDER
The Federal Trade Commission ("Commission") having initiated an
investigation of the proposed merger of Respondent America Online, Inc. ("AOL")
and Respondent Time Warner Inc. ("Time Warner"), and Respondents having been
furnished thereafter with a draft of Complaint that the Bureau of Competition
proposed to present to the Commission for its consideration and which, if issued
by the Commission, would charge Respondents with violations of Section 5 of the
Federal Trade Commission Act, as amended, 15 U.S.C. 'SS' 45, and Section 7 of
the Xxxxxxx Act, as amended, 15 U.S.C. 'SS' 18; and
Respondents, their attorneys, and counsel for the Commission having
thereafter executed an Agreement Containing Consent Orders ("Consent
Agreement"), containing an admission by Respondents of all the jurisdictional
facts set forth in the aforesaid draft of Complaint, a statement that the
signing of said Consent Agreement is for settlement purposes only and does not
constitute an admission by Respondents that the law has been violated as alleged
in such Complaint, or that the facts as alleged in such Complaint, other than
jurisdictional facts, are true, and waivers and other provisions as required by
the Commission's Rules; and
The Commission having thereafter considered the matter and having
determined that it had reason to believe that Respondents have violated said
Acts, and that a Complaint should issue stating its charges in that respect and
having thereupon issued its Complaint and its Order
to Hold Separate, and having accepted the executed Consent Agreement and placed
such Consent Agreement on the public record for a period of thirty (30) days for
the receipt and consideration of public comments, now in further conformity with
the procedure described in Commission Rule 2.34, 16 C.F.R. 'SS' 2.34, the
Commission hereby makes the following jurisdictional findings and issues the
following Decision and Order ("Order"):
1. Respondent AOL is a corporation organized, existing and doing
business under and by virtue of the laws of the State of Delaware,
with its office and principal place of business located at 00000 XXX
Xxx, Xxxxxx, Xxxxxxxx 00000.
2. Respondent Time Warner is a corporation organized, existing and doing
business under and by virtue of the laws of the State of Delaware,
with its office and principal place of business located at 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
3. The Federal Trade Commission has jurisdiction of the subject matter
of this proceeding and of Respondents, and the proceeding is in the
public interest.
I.
IT IS ORDERED that, as used in this Order, the following definitions
shall apply:
A. "AOL" means America Online, Inc., its directors, officers, employees,
agents, representatives, successors, and assigns; its subsidiaries,
divisions, groups and affiliates controlled by America Online, Inc.,
and the respective directors, officers, employees, agents,
representatives, successors, and assigns of each.
B. "Time Warner" means Time Warner Inc., its directors, officers,
employees, agents, representatives, successors, and assigns; its
subsidiaries, divisions (including, but not limited to, Time Warner
Entertainment Company, L.P.), groups and affiliates controlled by
Time Warner Inc. and the respective directors, officers, employees,
agents, representatives, successors, and assigns of each.
C. "Access" means the provision of a connection point at the connection
points within each Cable Division where Respondents are providing
connections for Respondents' ISPs and where Respondents have provided
all of the technology required to enable Non-affiliated ISPs to reach
Subscribers over Respondents' Cable Holdings.
D. "Adelphia" means Adelphia Communications Corporation, incorporated in
Delaware, with its principal place of business located at Xxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxxxxx, XX 00000-1141, and its subsidiaries,
divisions, groups and affiliates controlled by Adelphia, and the
successors and assigns of each.
Page 2
E. "Affiliated Cable Broadband ISP Service" means a Cable Broadband ISP
Service Affiliated with Respondent, excluding Road Runner.
F. "Affiliated" means having an attributable interest as defined in 47
C.F.R. 'SS' 76.501 (and accompanying notes), as that rule read on
July 1, 1996.
G. "Alternative Cable Broadband ISP Service Agreement" means an
agreement between Respondents and a Non-affiliated ISP to provide
Cable Broadband ISP Service on Respondents' Cable Holdings.
H. "AT&T" means AT&T Corp., incorporated in New York, with its principal
place of business located at 00 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000-2412 and its subsidiaries, divisions, groups and
affiliates controlled by AT&T, and the successors and assigns of
each.
I. "Available" means ready for immediate use at the request of a
Subscriber.
J. "Bandwidth" means the measure, in bits per second, of the speed of
data transmission.
K. "Broadband" means Bandwidth designed to operate at rates greater than
128 kilobits per second.
L. "Cable Broadband ISP Service" means any ISP Service provided via
Broadband over cable.
M. "Cable Division" means each collection of localized communication
networks, comprising one or more cable systems, that transmits
multi-channel video, as well as other Content and services, by means
of coaxial cables and/or fiber optics, that is located in the United
States and is Controlled by Respondents.
N. "Cablevision" means Cablevision Systems Corporation, incorporated in
Delaware, with its principal place of business located at 0000
Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, and its subsidiaries, divisions,
groups and affiliates controlled by Cablevision, and the successors
and assigns of each.
O. "Charter" means Charter Communications Holdings, LLC, incorporated in
Delaware, with its principal place of business located at 00000
Xxxxxxxxxxx Xxxxx, Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000, and its
subsidiaries, divisions, groups and affiliates controlled by Charter,
and the successors and assigns of each.
Page 3
P. "Comcast" means Comcast Cable Communications, Inc., incorporated in
Delaware, with its principal place of business located at 0000 Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000 and its subsidiaries,
divisions, groups and affiliates controlled by Comcast, and the
successors and assigns of each.
Q. "Commission" means the Federal Trade Commission.
R. "Content" means data packets carrying information including, but not
limited to, links, video, audio, text, e-mail, message, interactive
signals, and interactive triggers.
S. "Control" means (1) either (i) holding 50% or more of the outstanding
voting securities of a Person or (ii) in the case of a Person that
has no outstanding voting securities, having the right to 50% or more
of the profits of the Person, or having the right in the event of
dissolution to 50% or more of the assets of the Person or (2) having
the contractual power presently to designate 50% or more of the
directors of a Person that is a corporation, or in the case of
unincorporated Persons, of individuals exercising similar functions.
T. "Costs" means the prices charged (1) by a provider of DSL Services
for access to a data line, including for any local data traffic
aggregation, from a central office or remote terminal to a
Subscriber's home, (2) by a provider of DSL Services or a third party
for installation of DSL Services at a Subscriber's home, and (3) by a
provider of DSL Services or a third party for customer premise
equipment (such as a DSL modem) required to use such DSL Services by
a Subscriber.
U. "Cox" means Cox Communications, Inc., incorporated in Delaware, with
its principal place of business located at 0000 Xxxx Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000 and its subsidiaries, divisions, groups and
affiliates controlled by Cox, and the successors and assigns of each.
V. "DSL" means a digital subscriber line or a modem technology that
provides Broadband transport over telephone lines.
W. "DSL Services" means Broadband ISP Services delivered via DSL.
X. "Earthlink" means Earthlink, Inc., incorporated in Delaware, with its
principal place of business located at 0000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 and its subsidiaries, divisions,
groups and affiliates controlled by Earthlink, and the successors and
assigns of each.
Page 4
Y. "Earthlink Agreement" means the High-Speed Service Agreement
effective as of November 18, 2000, between Earthlink, Inc., and Time
Warner Entertainment Company, L.P.
Z. "Identified Cable Division" means each of the Cable Divisions
identified in Appendix A, as well as any other Cable Division with
300,000 Subscribers or more, that, after the date Respondents execute
the Consent Agreement, is, through acquisition or otherwise,
Controlled by Respondents.
AA. "ILEC" means incumbent local exchange carrier, a term used to refer
to a Regional Bell Operating Company.
BB. "ISP" means a provider of ISP Service.
CC. "ISP Service" means the provision of connectivity to and services
that enable the use of the Internet by an end-user.
DD. "ITV" means interactive television.
EE. "Merger" means the transaction contemplated by the Second Amended and
Restated Agreement and Plan of Merger, dated as of January 10, 2000,
among AOL Time Warner Inc., America Online, Inc., Time Warner Inc.,
America Online Merger Sub Inc., and Time Warner Merger Sub Inc.
FF. "MSO" means a multiple system operator, which is a major cable
television organization that has franchises in multiple locations.
GG. "MSO Agreement" means an agreement between Respondents and any one of
Adelphia, AT&T, Cablevision, Charter, Comcast, or Cox, pursuant to
which Respondents provide Cable Broadband ISP Service over any of
such MSO's cable systems.
HH. "Monitor Trustee" means any Person appointed by the Commission
pursuant to Paragraph V. of this Order to monitor Respondents'
compliance with their obligations pursuant to this Order and, if the
Commission so determines, to monitor compliance with Respondents'
obligations pursuant to the Order to Hold Separate issued in this
matter.
II. "Non-affiliated Cable Broadband ISP Service" means any Cable
Broadband ISP Service that is not Affiliated with or Controlled by
Respondents.
JJ. "Non-affiliated ISP" means any ISP that is not Affiliated with or
Controlled by Respondents.
Page 5
KK. "Offer" means in any way proffering, including, but not limited to,
advertising, promoting, or announcing the current or future
availability of service or its price.
LL. "Person" means any natural person, corporate entity, partnership,
association, joint venture, government entity, or trust.
MM. "RBOC" means Regional Bell Operating Companies, or the regional
holding companies that resulted from the divestitures by AT&T, each
of which has its own separate geographic area in which it operates as
the ILEC.
NN. "RBOC Territory" means that separate geographic area in which an
entity operates as the ILEC.
OO. "Respondents" means AOL and Time Warner.
PP. "Respondents' Cable Holdings" means each and every Cable Division.
QQ. "Respondents' ISP" means any ISP Controlled by or Affiliated with
Respondents.
RR. "Road Runner" means Road Runner LLC, organized in Delaware, with its
principal place of business located at 00000 Xxxxxxxx Xxxx Xxxx,
Xxxxxxx, Xxxxxxxx 00000, and any successor thereto.
SS. "Subscriber" means the end-user that has entered into an agreement
for the provision of a service.
II.
IT IS FURTHER ORDERED that:
A. In each Identified Cable Division:
1. Respondents shall not make Available to any Subscriber any
Affiliated Cable Broadband ISP Service until such time as
Non-affiliated Cable Broadband ISP Service provided by Earthlink
pursuant to the Earthlink Agreement (which agreement shall not
vary from or contradict or be construed to vary from or
contradict the terms of this Order) is Available to Subscribers
in that Identified Cable Division. Respondents shall not Offer
to any Subscriber in that Identified Cable Division any
Affiliated Cable Broadband ISP Service until: (x) the
Non-Affiliated Cable Broadband ISP Service provided by Earthlink
is Available in that
Page 6
Identified Cable Division or (y) Earthlink Offers its
Non-affiliated Cable Broadband ISP Service to Subscribers in
that Identified Cable Division, whichever occurs earlier. For
purposes of this Paragraph II.A.1., the terms "make Available"
and "Offer" shall not include tests that (i) involve a limited
number of Subscribers, (ii) are for a limited period of time,
and (iii) are not for commercial purposes but are conducted only
for technological and operational implementation purposes;
PROVIDED, HOWEVER, that Respondents shall engage in no
promotional activity in connection with such tests.
2. Within ninety (90) days after the date that Respondents make
Available to any Subscriber an Affiliated Cable Broadband ISP
Service, Respondents shall enter into Alternative Cable
Broadband ISP Service Agreements that have received the prior
approval of the Commission with at least two (2) Non-affiliated
ISPs (other than the Non-affiliated ISP that is party to the
Alternative Cable Broadband ISP Service Agreement approved by
the Commission pursuant to Paragraph II.A.1. of this Order in
that Identified Cable Division) that have received the prior
approval of the Commission to make Available additional
Non-affiliated Cable Broadband ISP Services to Subscribers in
that Identified Cable Division.
3. If Respondents fail to enter into the Alternative Cable
Broadband ISP Service Agreements required by Paragraph II.A.2 of
this Order within the time required, then the Commission may
appoint a trustee pursuant to Paragraph VI of this Order who,
for an additional ninety-day (90-day) period, shall have the
authority to enter into the Alternative Cable Broadband ISP
Service Agreements required by Paragraph II.A.2.of this Order.
Such agreements shall be subject to the prior approval of the
Commission and entered into with Non-affiliated ISPs that
receive the prior approval of the Commission. With respect to a
specific Identified Cable Division, these agreements shall be
(a) on terms that, taken as a whole, are comparable to either
(i) the Earthlink Agreement or (ii) any MSO Agreement; and (b)
in any event, on terms with respect to technological and
operational implementation for the provision of service that
could not reasonably be expected to adversely affect in any
significant respect the Cable Broadband ISP Services or any
other services provided by such Identified Cable Division. The
trustee shall consult with Respondents during the course of
negotiations relating to any Alternative Cable Broadband ISP
Agreement and shall consider in good faith any business,
technological or operational considerations expressed by
Respondents relating to such negotiations.
Page 7
B. In each of Respondents' Cable Divisions, excluding the Identified
Cable Divisions:
1. Within ninety (90) days after the date that Respondents make
Available to any Subscriber an Affiliated Cable Broadband ISP
Service in that Cable Division, Respondents shall enter into
Alternative Cable Broadband ISP Service Agreements that have
received the prior approval of the Commission with at least
three (3) Non-affiliated ISPs that have received the prior
approval of the Commission to make Available Non-affiliated
Cable Broadband ISP Services to Subscribers throughout that
Cable Division. For purposes of this Paragraph II..B.1., the
term "make Available" shall not include tests that (i) involve a
limited number of Subscribers, (ii) are for a limited period of
time, and (iii) are not for commercial purposes but are
conducted only for technological and operational implementation
purposes; PROVIDED, HOWEVER, that Respondents shall engage in no
promotional activity in connection with such tests. For purposes
of this Paragraph II.B.1., the Earthlink Agreement is an
Alternative Cable Broadband ISP Service Agreement that has
received the prior approval of the Commission, and Earthlink is
a Non-affiliated ISP that has received the prior approval of the
Commission.
2. If Respondents fail to enter into the Alternative Cable
Broadband ISP Service Agreements required by Paragraph II.B.1.
of this Order within the time required, then the Commission may
appoint a trustee pursuant to Paragraph VI of this Order who,
for an additional ninety-day (90-day) period, shall have the
authority to enter into the Alternative Cable Broadband ISP
Service Agreements required by Paragraph II.B.1. Such agreements
shall be subject to the prior approval of the Commission and
entered into with Non-affiliated ISPs that receive the prior
approval of the Commission. These agreements shall be (a) on
terms that, taken as a whole, are comparable to either (i) any
other Alternative Cable Broadband ISP Service Agreement between
Respondents and a Non-affiliated ISP to provide Cable Broadband
ISP Service in any of Respondents' Cable Holdings, or (ii) any
MSO Agreement; and (b) in any event, on terms with respect to
technological and operational implementation for the provision
of service that could not reasonably be expected to adversely
affect in any significant respect the Cable Broadband ISP
Services or any other services provided by such Cable Division.
The trustee shall consult with Respondents during the course of
negotiations relating to any Alternative Cable Broadband ISP
Agreement and shall consider in good faith any business,
technological or operational considerations expressed by
Respondents relating to such negotiations.
Page 8
C. Respondents shall include in all Alternative Cable Broadband ISP
Service Agreements submitted to the Commission for the Commission's
approval pursuant to Paragraphs II.A. and II.B.:
1. a "most favored nation clause" requiring that, in the event that
Respondents execute an MSO Agreement, Respondents shall: (1)
within five (5) business days of execution of the MSO Agreement,
notify the Monitor Trustee of the execution of the MSO Agreement
and, at the same time, provide the Monitor Trustee with a copy
of the MSO Agreement, (2) within five (5) business days of
execution of the MSO Agreement, notify each Non-affiliated ISP
that is party to an Alternative Cable Broadband ISP Service
Agreement to provide Non-affiliated Cable Broadband ISP Service
to Subscribers on any of Respondents' Cable Holdings that was
approved by the Commission pursuant to this Order of the
execution of the MSO Agreement, and (3) give such Non-affiliated
ISPs, for a minimum of thirty (30) days from the day the
Non-affiliated ISP is notified of the execution of the MSO
Agreement, the ability to convert to all of the rates and terms
in the MSO Agreement.
2. a requirement that, if Respondents make available different
levels of service (including, but not limited to, quality of
service guarantees, maximum and minimum throughput capacity, and
byte consumption per Subscriber) to Respondents' ISPs,
Respondents shall make those levels of service available to
Non-affiliated ISPs;
3. a requirement that, if Respondents make any network flow
monitoring data (regarding data transport between the ISP's
connection point to the cable network and the Subscriber's
location) or usage accounting available to any of Respondents'
ISPs, then Respondents shall make that same data or accounting
available to Non-affiliated ISPs; and
4. at the option of the Non-affiliated ISP, a requirement that
disputes in connection with compliance with any of the rates,
terms, and conditions in the Alternative Cable Broadband ISP
Service Agreement shall be submitted to binding arbitration;
PROVIDED, HOWEVER, that the arbitrator shall have no
responsibility or authority to resolve issues concerning
Respondents' compliance with this Order; and PROVIDED, FURTHER,
HOWEVER, that any non-monetary remedies granted by the
arbitrator shall be subject to judicial review, and monetary
remedies (including, but not limited to, the establishment of
price terms for different levels of service and percentage
splits) shall not be subject to judicial review.
Page 9
D. In the event that any one of the Alternative Cable Broadband ISP
Service Agreements approved by the Commission pursuant to Paragraphs
II.A. or II.B,
1. is for a term that terminates prior to expiration of this Order,
then Respondents shall enter into an additional Alternative
Cable Broadband ISP Service Agreement approved by the
Commission, with a Non-affiliated ISP approved by the
Commission, to provide Non-affiliated Cable Broadband ISP
Service, as required by Paragraph II.A. or II.B. of this Order,
as applicable, no later than ninety (90) days prior to
termination of the original agreement, the term of which, if
approved by the Commission, shall take effect immediately upon
expiration of the original agreement; PROVIDED, HOWEVER, that
with respect to any such Alternative Cable Broadband ISP Service
Agreement that is for a term that terminates prior to the
expiration of this Order but is for a term of at least three (3)
years, Respondents shall offer the Non-affiliated ISP that is
party to such Alternative Cable Broadband ISP Service Agreement
an option to renew such Alternative Cable Broadband ISP Service
Agreement for at least two (2) years;
2. is terminated by Respondents prior to expiration of this Order,
Respondents shall enter into an additional Alternative Cable
Broadband ISP Service Agreement approved by the Commission, with
a Non-affiliated ISP approved by the Commission, to provide
Non-affiliated Cable Broadband ISP Service, as required by
Paragraph II.A. or II.B. of this Order, as applicable, no later
than ninety (90) days prior to termination of the original
agreement, the term of which, if approved by the Commission,
shall take effect immediately upon expiration of the original
agreement; and
3. is terminated by the approved Non-affiliated ISP or the approved
Non-affiliated ISP ceases to make its Non-affiliated Cable
Broadband ISP Service Available to Subscribers in a particular
Identified Cable Division, then Respondents shall enter into an
additional Alternative Cable Broadband ISP Service Agreement,
approved by the Commission, with a Non-affiliated ISP, approved
by the Commission, as required by Paragraph II.A. or II.B. of
this Order, as applicable, within ninety (90) days after the
Non-affiliated Cable Broadband ISP Service is no longer
Available to Subscribers in that Identified Cable Division.
E. Throughout Respondents' Cable Holdings, Respondents shall negotiate
and enter into arms' length, commercial agreements with any
Non-affiliated ISP (in addition to Non-affiliated ISPs approved by
the Commission pursuant to Paragraphs II.A and II.B. of this Order)
that seeks to provide Cable Broadband
Page 10
ISP Service; provided, however, that Respondents may (1) decline to
negotiate or decline to enter into such agreements based on cable
broadband capacity constraints, other cable broadband technical
limitations, or cable broadband business considerations or (2) impose
rates, terms, or conditions based on cable broadband capacity
constraints, other cable broadband technical limitations, or cable
broadband business considerations but, as to either subparagraph
E.(1) or E.(2), only so long as such determinations are made without
discrimination on the basis of affiliation with respect to all ISPs
that enter into or seek to enter into or negotiate agreements with
Respondents to provide Cable Broadband ISP Service to Subscribers on
Respondents' Cable Holdings and are not based, in whole or in part,
on the impact or potential impact on Respondents' ISPs (including but
not limited to a decrease or potential decrease in Subscribers on
Respondents' ISPs).
F. The purpose of this Order is to ensure the provision and availability
of a full range of Content and services by Non-affiliated ISPs; to
prevent discrimination by Respondents as to Non-affiliated ISPs on
the basis of affiliation, which would interfere with the ability of
the Non-affiliated ISPs to provide a full range of Content and
services; and to remedy the lessening of competition in the market
for broadband ISP Service as alleged in the Commission's Complaint.
III.
IT IS FURTHER ORDERED that:
A. Respondents shall not interfere in any way, directly or indirectly,
with Content passed in either direction along the Bandwidth
contracted for and being used by any Non-affiliated ISP in compliance
with the Non-affiliated ISP's agreement with Respondents.
B. For any Non-affiliated ISP offering Cable Broadband ISP Service to
Subscribers on any of Respondents' Cable Divisions, Respondents
shall, upon the request of the Non-affiliated ISP, provide Access.
C. As to any of Respondents' Cable Holdings, Respondents shall not
interfere with the ability of a Subscriber to use, in conjunction
with ITV services provided by a Person that is not Affiliated with
Respondent, interactive signals, triggers, or other Content that
Respondents have agreed to carry.
D. Respondents shall not discriminate on the basis of affiliation in the
transmission or modification of Content that Respondents have
contracted to deliver to Subscribers over their cable systems.
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E. Respondents shall not enter into any agreement with any MSO that
would interfere with the ability of such MSO to enter into agreements
with any other ISP or provider of ITV services.
IV.
IT IS FURTHER ORDERED that within each RBOC Territory:
A. Respondents shall offer DSL Services to Subscribers in those
geographic areas in which any of Respondents' Cable Holdings are
located and Affiliated Cable Broadband ISP Service or Road Runner is
Available at retail pricing, terms, and conditions that are the same
as or comparable to those at which Respondents offer DSL Services to
Subscribers in those geographic areas in which neither Affiliated
Cable Broadband ISP Service nor Road Runner is Available; PROVIDED,
HOWEVER, that Respondents' pricing may reflect any actual differences
in Costs to Respondents charged by the provider of DSL Services. To
the extent that Respondents' pricing reflects differences in Costs,
Respondents shall include a description of these Cost differences in
the reports they are required to submit to the Commission (and the
Monitor Trustee) pursuant to Paragraph VII. of this Order.
B. Respondents shall market and promote DSL Services to Subscribers in
those geographic areas in which any of Respondents' Cable Holdings
are located and Affiliated Cable Broadband ISP Service or Road Runner
is Available at the same or comparable level and in the same or
comparable manner as Respondents market and promote DSL Services to
Subscribers in those areas in which neither Affiliated Cable
Broadband ISP Service nor Road Runner is Available.
V.
IT IS FURTHER ORDERED that, any time after Respondents execute the
Consent Agreement, the Commission may appoint a Monitor Trustee to monitor
Respondents' compliance with their obligations under this Order, which Monitor
Trustee shall have the necessary rights, duties, and responsibilities as
described below:
A. The Commission shall select the Monitor Trustee, subject to the
consent of Respondents, which consent shall not be unreasonably
withheld. If Respondents have not opposed, in writing, including the
reasons for opposing, the selection of any proposed Monitor Trustee
within ten (10) days after notice by the staff of the Commission to
Respondents of the identity of any proposed Monitor Trustee,
Respondents shall be deemed to have consented to the selection of the
proposed Monitor Trustee. Within ten (10) days after the appointment
of the Monitor Trustee, Respondents shall execute a trust agreement
that, subject to the prior
Page 12
approval of the Commission, confers on the Monitor Trustee all the
power and authority necessary to permit the Monitor Trustee to
monitor Respondents' compliance with the terms of this Order in a
manner consistent with the purposes of this Order.
B. The Monitor Trustee shall have the power and authority to monitor
Respondents' compliance with the terms of this Order and shall
exercise such power and authority and carry out the duties and
responsibilities of the Monitor Trustee in a manner consistent with
the purposes of this Order in consultation with the Commission.
C. The Monitor Trustee shall have full and complete access to all
personnel, books, records, documents and facilities of Respondents
related to compliance with this Order or to any other relevant
information, as the Monitor Trustee may reasonably request, including
but not limited to all documents and records kept in the normal
course of business that relate to Respondents' obligations under this
Order. Respondents shall develop such financial or other information
as such Monitor Trustee may reasonably request and shall cooperate
with the Monitor Trustee. Respondents shall take no action to
interfere with or impede the Monitor Trustee's ability to perform his
or her responsibilities or to monitor Respondents' compliance with
the Order.
D. Respondents may require the Monitor Trustee or any of the Persons
referred to in Paragraph V.E. to sign a confidentiality agreement
prohibiting the disclosure of any information gained as a result of
his or her role as Monitor Trustee to anyone other than the
Commission.
E. The Monitor Trustee shall have the authority to employ, at the cost
and expense of Respondents, such consultants, accountants, attorneys,
and other representatives and assistants as are reasonably necessary
to carry out the Monitor Trustee's duties and responsibilities. The
Monitor Trustee shall account for all expenses incurred, including
fees for his or her services, subject to the approval of the
Commission.
F. The Monitor Trustee shall serve, without bond or other security, at
the cost and expense of Respondents, on reasonable and customary
terms commensurate with the Monitor Trustee's experience and
responsibilities. Respondents shall indemnify the Monitor Trustee and
hold the Monitor Trustee harmless against any losses, claims,
damages, liabilities, or expenses arising out of, or in connection
with, the performance of the Monitor Trustee's duties, including all
reasonable fees of counsel and other expenses incurred in connection
with the preparation for, or defense of any claim, whether or not
resulting in any liability, except to the extent that such
liabilities, losses, damages, claims, or expenses
Page 13
result from misfeasance, gross negligence, willful or wanton acts,
or bad faith by the Monitor Trustee.
G. The Monitor Trustee shall have no responsibility or obligation for
the operation of Respondents' businesses.
H. The Monitor Trustee shall serve for the duration of this Order.
I. If the Commission determines that the Monitor Trustee has ceased to
act or failed to act diligently, the Commission may appoint a
substitute Monitor Trustee who shall have all the rights, duties,
powers, authorities, and responsibilities described in this
paragraph. The Commission shall select the substitute Monitor
Trustee, subject to the consent of Respondents, which consent shall
not be unreasonably withheld. If Respondents have not opposed, in
writing, including the reasons for opposing, the selection of any
proposed substitute Monitor Trustee within ten (10) days after notice
by the staff of the Commission to Respondents of the identity of any
proposed substitute Monitor Trustee, Respondents shall be deemed to
have consented to the selection of the proposed substitute Monitor
Trustee. Within ten (10) days after the appointment of the substitute
Monitor Trustee, Respondents shall execute a trust agreement that,
subject to the prior approval of the Commission, confers on the
substitute Monitor Trustee all the power and authority necessary to
permit the substitute Monitor Trustee to monitor Respondents'
compliance with the terms of this Order in a manner consistent with
the purposes of this Order.
J. The Commission may on its own initiative or at the request of the
Monitor Trustee issue such additional orders or directions as may be
necessary or appropriate to assure compliance with the requirements
of this Order.
K. The Monitor Trustee shall report in writing to the Commission
concerning Respondents' compliance with this Order thirty days after
execution of the trust agreement and every ninety days thereafter
until the Order terminates.
VI.
IT IS FURTHER ORDERED that:
A. If Respondents have not entered into the Alternative Cable Broadband
ISP Service Agreements as required by Paragraphs II.A.2. and II.B.1
of this Order in any Cable Division, the Commission may appoint a
trustee (who may be the same individual named in Paragraph V of this
Order), to enter into the Alternative Cable Broadband ISP Service
Agreements as described in Paragraphs II.A.3. or II.B.2., as
applicable to that Cable Division. In the event that the Commission
or
Page 14
the Attorney General brings an action pursuant to 'SS' 5(l) of the
Federal Trade Commission Act, 15 U.S.C. 'SS' 45(l), or any other
statute enforced by the Commission, Respondents shall consent to the
appointment of a trustee in such action. Neither the appointment of a
trustee nor a decision not to appoint a trustee under this Paragraph
shall preclude the Commission or the Attorney General from seeking
civil penalties or any other relief available to it, including a
court-appointed trustee, pursuant to 'SS' 5(l) of the Federal Trade
Commission Act, or any other statute enforced by the Commission, for
any failure by the Respondents to comply with this Order.
B. If a trustee is appointed by the Commission or a court pursuant to
Paragraph VI.A. of this Order, Respondents shall consent to the
following terms and conditions regarding the trustee's powers,
duties, authority, and responsibilities:
1. The Commission shall select the trustee, subject to the consent
of Respondents, which shall not be unreasonably withheld. If
Respondents have not opposed, in writing, including the reasons
for opposing, the selection of any proposed trustee within ten
(10) days after notice by the staff of the Commission to
Respondents of the identity of any proposed trustee, Respondents
shall be deemed to have consented to the selection of the
proposed trustee.
2. Within ten (10) days after appointment of the trustee,
Respondents shall execute a trust agreement that, subject to the
prior approval of the Commission and, in the case of a
court-appointed trustee, of the court, transfers to the trustee
all rights and powers necessary to permit the trustee to enter
into the Alternative Cable Broadband ISP Service Agreements
described by Paragraph II.A.3. and II.B.2 of this Order for the
applicable Cable Division.
3. Subject to the prior approval of the Commission, the trustee
shall have the sole power and authority to enter into the
Alternative Cable Broadband ISP Service Agreements as required
by Paragraph II.A.2 and II.B.1. and as described in Paragraph
II.A.3 and II.B.2 of this Order for the applicable Cable
Division.
4. The trustee shall have an additional ninety days after the
period allowed by Paragraphs II.A.2 or II.B.1. has expired in
the applicable Cable Division to enter into the Alternative
Cable Broadband ISP Services Agreements, required by Paragraphs
II.A.2 or II.B.1, applicable to that Cable Division; the
Non-affiliated ISP and the Alternative Cable Broadband ISP
Services Agreement shall be subject to the applicable
Page 15
requirements of Paragraph II.A. and II.B., and shall be subject
to the prior approval of the Commission.
5. The trustee shall have full and complete access to the
personnel, books, records and facilities related to the Cable
Broadband ISP Services Agreements required by Paragraph II. of
this Order or to any other relevant information, as the trustee
may request. Respondents shall develop such financial or other
information as such trustee may reasonably request and shall
cooperate with the trustee. Respondents shall take no action to
interfere with or impede the trustee's ability to perform his or
her responsibilities under this Order. Any delays caused by
Respondents shall extend the time for entering into the Cable
Broadband ISP Services Agreements as required by Paragraph II.
of this Order in an amount equal to the delay, as determined by
the Commission or, for a court-appointed trustee, by the court.
6. The trustee shall serve, without bond or other security, at the
cost and expense of Respondents, on such reasonable and
customary terms and conditions as the Commission or a court may
set. The trustee shall have the authority to employ, at the cost
and expense of Respondents, such consultants, accountants,
attorneys, and other representatives and assistants as are
necessary to carry out the trustee's duties and
responsibilities. The trustee shall account for all expenses
incurred, including fees for his or her services, subject to
approval of the Commission.
7. Respondents shall indemnify the trustee and hold the trustee
harmless against any losses, claims, damages, liabilities, or
expenses arising out of, or in connection with, the performance
of the trustee's duties, including all reasonable fees of
counsel and other expenses incurred in connection with the
preparation for, or defense of any claim, whether or not
resulting in any liability, except to the extent that such
liabilities, losses, damages, claims, or expenses result from
misfeasance, gross negligence, willful or wanton acts, or bad
faith by the trustee.
8. If the trustee ceases to act or fails to act diligently, a
substitute trustee shall be appointed in the same manner as
provided in Paragraph VI.A. and VI.B.1. of this Order.
9. The Commission or, in the case of a court-appointed trustee, the
court, may on its own initiative or at the request of the
trustee issue such additional orders or directions as may be
necessary or appropriate to accomplish the requirements of
Paragraph II. of this Order.
Page 16
10. The trustee shall report in writing to Respondents and the
Commission every thirty (30) days concerning the trustee's
efforts to accomplish the requirements of Paragraph II.
VII.
IT IS FURTHER ORDERED that
A. Within thirty (30) days after the date Respondents execute the
Consent Agreement, every thirty (30) days thereafter until
Respondents have complied with their obligations pursuant to
Paragraphs II.A. and II.B. of this Order, and every ninety (90) days
thereafter until termination of this Order, Respondents shall submit
to the Commission (with a copy to the Monitor Trustee) a verified
written report setting forth in detail, the manner and form in which
they intend to comply, are complying, and have complied with this
Order. Respondents shall include in their compliance reports a full
description of the efforts being made to comply with this Order,
including, but not limited to:
(1) a list by Cable Division of (i) all ISPs with whom
Respondents have entered into a Cable Broadband ISP Service
Agreement, including name of ISP and the telephone number of
contact person, (ii) the date of execution of the agreement with
the ISP, (iii) the date service is made Available to Subscribers
by ISP, (iv) the date Respondents Offer Affiliated Cable
Broadband ISP Service to Subscribers, (v) the identity of all
ISPs with whom Respondents are negotiating Cable Broadband ISP
Service Agreements, all who have expressed interest in
negotiating Cable Broadband ISP Service Agreements with
Respondents but with whom Respondents have refused to negotiate,
including the reasons why Respondents have refused to negotiate,
and all whom Respondents have contacted but have expressed no
interest in negotiating or entering into a Cable Broadband ISP
Service Agreement, (vi) the identity of all ISPs with whom
Respondents have declined to negotiate or to enter into an
agreement to provide Cable Broadband ISP Service, including the
reasons why Respondents declined to do so;
(2) a description of the negotiations with each ISP, including
submission of the latest draft of any Cable Broadband ISP
Service Agreement; and
(3) copies of all agreements with ISPs to provide Cable
Broadband ISP Service on Respondents' Cable Holdings (other than
Cable Broadband ISP Service Agreements approved by the
Commission pursuant to Paragraphs II.A. and II.B.).
Page 17
B. One (1) year from the date this Order becomes final, annually for the
next succeeding four (4) years on the anniversary of the date this
Order becomes final, and at other times as the Commission may
require, Respondents shall either include in the report submitted
pursuant to Paragraph VII.A. above or submit to the Commission (with
a copy to the Monitor Trustee) an additional verified written report
setting forth in detail a description of all complaints from any
Non-affiliated Broadband ISP or television programmer made in writing
to the General Counsel of Respondents relating to the failure of
Respondents to make available content, or to carry interactive
signals, triggers or content, including a copy of all such written
complaints, the identification of the Non-affiliated Broadband ISP or
television programmer, the name of a contact person from the
Non-affiliated Broadband ISP or television programmer, a description
of the original request if not contained in the written complaint,
and Respondents' response to the original request.
VIII.
IT IS FURTHER ORDERED that Respondents shall notify the Commission at
least thirty (30) days prior to any proposed change in the corporate Respondents
such as dissolution, assignment, sale resulting in the emergence of a successor
corporation, or the creation or dissolution of subsidiaries or any other change
in the corporation that may affect compliance obligations arising out of the
Order.
IX.
IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this Order, and subject to any legally recognized privilege,
upon written request with reasonable notice to Respondents, Respondents shall
permit any duly authorized representatives of the Commission:
A. Access, during office hours upon reasonable notice and in the
presence of counsel, to inspect and copy all books, ledgers,
accounts, correspondence, memoranda and other records and documents
in the possession or under the control of Respondents relating to any
matters contained in this Order; and
B. Upon five (5) business days' notice to Respondents and without
restraint or interference from Respondents, to interview officers,
directors, or employees of Respondents, who may have counsel present,
regarding such matters.
Page 18
X.
IT IS FURTHER ORDERED that:
A. This Order shall terminate five years from the date this Order
becomes final; PROVIDED, HOWEVER, that if Respondents abandon their
plans to consummate the proposed Merger and so notify the Commission,
this Order shall terminate on the day after the date Respondents
withdraw their respective Notification and Report Forms filed
pursuant to Section 7A of the Xxxxxxx Act, 15 U.S.C. 'SS' 18a, and
the regulations promulgated thereunder, 16 C.F.R. 'SS''SS' 800 et
seq. in connection with the proposed Merger.
B. Obligations in this Order applicable to any Cable Division shall
terminate upon the disposition of Respondents' Control over such
Cable Division.
By the Commission.
Xxxxxx X. Xxxxx
Secretary
SEAL
ISSUED:
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APPENDIX A
IDENTIFIED CABLE DIVISIONS
1. New York City
2. Tampa Bay
3. Central Florida
4. Houston
5. Raleigh/Fayetteville
6. Western Ohio
7. Northeast Ohio
8. Charlotte
9. Los Angeles
10. Milwaukee
11. Greensboro
12. Hawaii
13. Cincinnati
14. San Antonio
15. Syracuse
16. Kansas City
17. South Carolina
18. Columbus
19. Rochester
20. Albany
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