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Disney squeals at AOL plan
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March 23, 2000: 7:09 p.m. ET
Mouse House worried about access to AOL Time Warner after the merger
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NEW YORK (CNNfn) - Walt Disney Co., concerned that its programming may be squeezed from the vast Internet and TV networks of a merged America Online and Time Warner, has been actively talking to Washington lawmakers, insisting the issue of access has not been "clearly defined."
Disney spokeswoman Chris Castro said the Burbank, Calif.-based conglomerate, home to Mickey Mouse, popular theme parks and the ABC television network, is not opposed to the merger, but wants to ensure that the issue of access is pursued before the government signs off on the deal.
"We have been on Capitol Hill, sharing our concerns regarding whether we will get equal treatment for our content from any competitor that has both cable and internet pipeline into the home," Castro said.
"Our issue is whether there will be true open access, for content. That concept has not been clearly defined yet," she added.
 Entertainment companies like Disney (DIS: Research, Estimates) are worried that AOL Time Warner, the company that will result from the $175 billion combination, might give its own vast lineup of television, movie and online content, preferential treatment over outside partners.
"We are looking at whether a company that controls the pipeline to the home will provide open access as opposed to favoring its own content," Castro said.
A spokeswoman for Dulles, Va.-based America Online (AOL: Research, Estimates) said the combined company intends to remain open to a range of content sources.
"Not only are we committed to carrying a diversity of content on AOL Time Warner, but also insuring the widest distribution of Time Warner's (TWX: Research, Estimates) content," on those Internet and television networks, she said.
Case: 'We do not intent to limit content'
Both representatives of both AOL and Time Warner, which is the parent of CNNfn.com, pointed to comments made by Time Warner Chairman Gerald Levin and AOL chairman Steve Case at the Senate Judiciary Committees hearing in February.
 "We do not intend to limit content diversity on any of our systems," Case told the committee on February 28. "If we limit content, if we do not promote a diversity of voices ... then consumers will waste no time migrating to other Internet and media services."
An aide for Vermont Senator Patrick Leahy, the senior Democrat on the Senate Judiciary Committee, said the Senator's office has had discussions with companies with concerns about the deal, but would not say if Disney was one.
"Some parties who are involved or interested in this merger have come in and discussed their concerns with us," the aide said from Washington.
While admitting that "several" parties have sought an audience with Leahy, the aide would neither confirm nor deny that any particular company came calling.
A representative of the Senate Judiciary Committee said the group will likely hold additional "information gathering" hearings in coming months, but that no dates were set.
Despite the political wrangling, the AOL spokeswoman said the company still expects the merger to close by the end of the year.
Analysts: Concerns not unfounded
Wall Street analysts noted that Disney does have a plausible concern, noting that while AOL will certainly be open to a variety of online entertainment, news and other content choices, in some cases it may choose to present its own product to its huge audience.
"(Others) are probably not going to have priority placement (within the service)," said one analyst, who requested anonymity.
"I'm sure that if Disney has good content, AOL is too smart to not put the Disney content on its servers. The question is, what's on page one, what's on page two and what's on page three," he said.
Interestingly, Disney Chairman Michael Eisner was not shaken when the merger was first announced. At the time, he said the deal could present problems for smaller content companies seeking access, but was less worried about that issue for Disney because of its ownership in the ABC television network and other assets.
Analysts also said the rumblings could be a function of other issues between the Disney and Time Warner, two of the biggest entertainment companies on Earth.
For example, they are currently embroiled in a much more public spat at several local U.S. television stations. In recent weeks Disney has threatened to pull its programming off Time Warner Cable's systems in several cities, including Houston, New York, and North Carolina cities Raleigh, Durham, and Fayetteville. 
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