Cable Bureau to Get AOL-Time Warner

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Washington -- Federal Communications Commission chairman
William Kennard wants the Cable Services Bureau to take the lead in the agency's review of
the $152.8 billion merger between America Online Inc. and Time Warner Inc., FCC sources
said last week.

While not totally unexpected, Kennard's move puts the CSB,
under chief Deborah Lathen, in position to identify and resolve the competitive issues
associated in the major combination between the country's leading Internet-service
provider and largest cable-system operator.

Once the AOL-Time Warner merger is filed with the FCC,
Kennard is expected to hand it over to Lathen's team, which reviewed AT&T Corp.'s
purchase of Tele-Communications Inc. last year and which is in the middle of reviewing
AT&T's proposed $56.4 billion acquisition of MediaOne Group Inc.

Lathen's team continues to carry out Kennard's orders to
monitor cable's broadband Internet-access policies, which AOL criticized as unfairly
closed to unaffiliated ISPs and urged Congress and the FCC to pry open.

Commission sources said they are concerned that AOL has
changed its position on open access. They added that before the merger, AOL sought
government-mandated nondiscriminatory access, but since the Jan. 10 announcement, it has
been endorsing commercial deals between ISPs and cable operators.

An AOL spokeswoman said soon after the merger was announced
that AOL Time Warner Inc. would allow customers to access the ISP of their choice without
having to pay twice.

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