Berkeley Law

This article provides a framework for the analysis of the potential effects of the recent AOL/Time Warner merger on the markets for broadband Internet access and broadband Internet content. We consider two anticompetitive strategies that a vertically integrated firm such as AOL Time Warner, offering both broadband transport and portal services, could in theory profitably pursue. First, an integrated provider could engage in conduit discrimination - insulating its own conduit from conpetition by limiting its distribution of affiliated content and services over rival platforms. Second, an integrated provider could engage in content discrimination - insulating its own affiliated content from competion by blocking or degrading the quality of outside content. After examing the competitive conditions in the broadband portal and transport markets, we evluate the post-merger incentives of AOL Time Warner to engage in either or both forms of discrimination.