Ad Exclusion A Non-Issue: Levin


CHICAGO — The head of media giant AOL Time Warner Inc. brushed off complaints that his cable company won’t run television ads from Internet rivals.

“I don’t get anybody even making an issue out of this,” said Gerald Levin, the company’s chief executive officer, on Wednesday at the cable industry’s convention here. “Any advertising medium can choose and select its ads.”

Cable TV is no different, said Levin, who heads the nation’s second largest cable provider.

Phone companies that deliver high-speed Web service over digital subscriber lines, or DSL, have complained that they cannot get cable operators such as AOL Time Warner (AOL) and AT&T Corp. (T) to accept and carry their commercials. Many of those cable companies offer their own competing fast Internet access over their cable lines.

AOL Time Warner particularly has come under attack by consumer groups, which argue that the company is violating government conditions it agreed to in getting approval for the merger between America Online and Time Warner. Company executives agreed to allow competing Internet providers, besides AOL, on their cable Web service so customers could have a variety of choices. They also pledged not to discriminate against those rivals.

Consumer advocates assert that the company’s refusal to carry competing ads runs afoul of its deal with the Federal Trade Commission and is anticompetitive.

“It is hard to understand how the commission could have intended anything but the prevention of exactly the kind of behavior in which AOL Time Warner is engaging,” public interest groups wrote to the FTC this week.

Mr. Levin sought to deflate the issue by asserting that many types of media outlets can decline rival ads. For example, certain network TV channels won’t take commercials for his HBO cable channel, he said.

“This has been going on for years,” Mr. Levin said.

AT&T also disputes that declining competitors’ ads is an unfair practice and say that DSL companies have any number of ways to promote their service besides cable.

“We are not put on this planet to make life for our competitors easy,” said Steve Lang of AT&T Broadband, the company’s cable division. Local markets make those decisions, he added, and in Dallas, the company has opted to run DSL ads.

Mr. Levin suggested that rivals are looking for ways to turn up the heat because cable has been so successful in selling its high-speed Web access.

Speaking more generally about the mammoth merger completed this year, Mr. Levin called “outrageous” the requirements placed on the company by the government — some that apply to still nascent services.

On future acquisitions, Mr. Levin said he has no interest in acquiring a major broadcast network. His company already owns an upstart — the WB.

But Mr. Levin said he isn’t surprised that some network broadcast executives would like to snap up or establish a business relationship with CNN, another of the company’s networks.

Mel Karmazin, president of Viacom Inc. (VIA), which owns CBS, expressed such an interest earlier this week.

Mr. Levin wouldn’t speculate on the possibilities for any type of deal but insisted that his job is “to preserve, protect and defend the news-gathering apparatus of CNN and Time.”

The company is shedding one business: its Warner Bros. stores. The company plans to sell off the real estate leases for the 150 stores it owns, Mr. Levin said. Instead, the company will license its material to other stores, such as Wal-Mart Stores Inc. (WMT), for new merchandise, he said.

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