"Too Close to Call," but Internet Economy Wins

The presidential race between Vice President Al Gore and Texas Governor George W. Bush is still too close to call, as a historic electoral dead heat comes down to the vote-tallying in Florida. As of early Wednesday morning, the only clear winner is the Internet Economy.

Both major party presidential candidates have run on campaign platforms that are pro-business and pro-technology, although there are some differences. Regardless of who wins the presidency, early returns indicate that the Republican Party has held on to slim majorities in both houses of Congress. Although key House committee chairmanships will be changing hands, Capitol Hill's high-tech tenor should remain the same.

Neither will the election's outcome affect the Federal Trade Commission's closely watched review of the AOL (AOL) -Time (TWX) Warner merger, which could be completed as soon as this week. The FTC is expected to force AOL and Time Warner to share their cable lines with competing Internet service providers. But the two sides are still squabbling over the prices AOL and Time Warner will be allowed to charge competitors for use of their lines, and the whole affair could end up in federal court.

Both Gore and Bush favor an extension of the current moratorium on sales tax collection for e-commerce. Both camps have been vague on the question of Internet privacy, but Gore is more likely to favor a new federal law next year. Both candidates want to spur international trade, protect intellectual property rights and close the digital divide.

However, the results of Florida's absentee-ballot count may change federal antitrust enforcement. Gore would likely continue the current administration's antitrust philosophy, which has resulted in high-profile cases against Microsoft (MSFT) and Intel (INTC) and a contentious AOL-Time Warner merger review. A Bush administration would be slower to challenge corporate mergers, especially "vertical mergers" linking companies that don't directly compete with each other. A senior Bush adviser says the Texas governor "respects the power of the marketplace and is very reluctant to be intrusive in high-technology areas."

Under Gore, FTC Chairman Robert Pitofsky, whose term expires next September, could be asked to stay on. If Bush wins, Pitofsky will resign, clearing the way for Bush to elevate either Thomas Leary or Orson Swindle, the two Republican commissioners currently serving, to an acting chairmanship while Bush searches for Pitofsky's replacement.

The election will have no immediate effect on the government's antitrust battle with Microsoft, which is now in the hands of a federal appellate court. But a Bush Justice Department would be more likely to reopen settlement talks, and less likely to challenge an appellate court ruling that sets aside the pending judicial order splitting the company. In a race that is closely watched in Redmond, incumbent Sen. Slade Gorton (R-Wash.), a staunch Microsoft defender, is in a dead heat with Democratic challenger Maria Cantwell.

Communications policy could be in for major changes should Bush appointees take control of the Federal Communications Commission next year. Under Republican leadership, the agency is likely to ease ownership limits on cable television, broadcast television and wireless telephone industries, allowing large firms to consolidate. All three industries are competing to offer broadband services for high-speed Internet access.

Should Bush win, FCC Chairman William Kennard, a Democrat appointed by President Clinton in 1997, would probably step down early next year. Bush could elevate current Republican Commissioner Michael Powell, son of the retired general and chairman of the Joint Chiefs of Staff Colin Powell, to the chairmanship. Bush could also nominate Pat Wood, head of the Texas Public Utility Commission, to replace Kennard.

Under Kennard, who enjoys the favor of the Gore camp, the FCC has avoided directly regulating the Internet, for example declining to force cable companies to provide competing Internet service providers with "open access" to the cable companies' high-speed cable lines. Kennard's term is set to expire in June, but a Gore administration might invite him to stay on.

The Vice President has been a key player in the Clinton administration's communications policy. A Gore administration would want to see healthy competition in broadband deployment, and genuine open access to broadband networks for competing Internet service providers. In keeping with his New Democrat philosophy, Gore is willing to let the market dictate open access for now, but he wouldn't be afraid to call for a new government mandate if he thought one were needed.

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