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The rustic college town of Boulder, Colo., boasts stunning Rocky Mountain views, all the organic food a health nut could want and more than 300 days of sunshine a year. Now Boulder has a new claim to fame: It’s an important outpost for the information economy. That’s not because Silicon Valley executives or New York media barons have developed a sudden addiction to granola and Birkenstocks. Boulder is the longtime home of Dale Hatfield, the grandfatherly, 63-year-old technology guru who’s been tapped to serve as the Federal Trade Commission’s watchdog over AOL Time Warner. In February, Hatfield was named “monitor trustee” as part of the deal the company struck with the Federal Trade Commission last December to win approval of its $112 billion merger. Three months into the job, Hatfield is still feeling his way along. But AOL Time Warner has charged ahead with its ambitious plans and has racked up impressive first-quarter numbers. That means Hatfield’s job — to blow the whistle if the company violates its agreements — will get busy soon. AOL Time Warner is actually obligated to pay Hatfield’s salary (he won’t disclose it), but he’s not likely to win any employee-of-the-month citations. Among other things, he’s gearing up to monitor the commission’s requirement that the new company hold off selling high-speed AOL Internet service on large Time Warner cable systems until it allows EarthLink, the No. 3 ISP, on those systems. In larger markets, the company must offer broadband Internet access from two other independent providers within 90 days after it starts offering AOL. The agreement also requires AOL Time Warner to negotiate with any independent ISP that wants to gain access to its cable systems, but it allows the media conglomerate to cite technical reasons for turning down such deals. For the five-year term of the agreement, Hatfield’s main job is to play traffic cop and one-man complaint department for the myriad number of small ISPs clamoring to offer broadband Internet service over Time Warner Cable networks. “This kind of position has the potential to function as a hotline for someone who feels bruised because the company isn’t providing access,” says William Kovacic, a former FTC official who is an antitrust expert at George Washington University Law School. FTC agreement or no, it’s going to be tough for small ISPs to break into the Time Warner network. Last year, Stephen Heins, a spokesman for the Wisconsin ISP Association, visited the FTC armed with a list of demands Time Warner had made of one small provider. Among the demands: that Time Warner receive 75 percent of the company’s subscription revenue. The old AOL had a reputation for such heavy-handed tactics, and Heins says he’s still “not very optimistic” that AOL Time Warner is going to play fair with independent ISPs. (An AOL spokeswoman wouldn’t comment on specific deals but confirmed the company is in talks with local ISPs.) “We have to be patient and get our facts together,” adds Heins. “When a violation occurs we have to make sure our whistle works.” Then it’s up to Hatfield to listen – and raise the alarm in Washington. He has unfettered access to AOL Time Warner’s files and personnel, and can alert the FTC to conduct that violates its agreement. The commission could then step in and take the company to court to enforce the deal. When it comes to watchdogging the world’s biggest media company, Hatfield is the real McCoy, says William Kennard, former FCC chairman and Hatfield’s ex-boss. The Boulder electrical engineer is “a national treasure,” he notes. “You can’t intimidate Dale Hatfield. He’s been at the table for all the major telecommunications policy debates of the past 25 years.” Hatfield comes to the job after more than 20 years of policy work at the Federal Communications Commission, the Commerce Department and the private sector. Hatfield’s love affair with technology began 50 years ago, when he started a lifelong ham-radio hobby by turning on a shortwave receiver and tuning in a broadcast from Morocco. “I’ve always been fascinated by technology,” he says. “You just don’t ever have to be bored with it.” He has spent his adult life at the intersection of technology and public policy. Besides his government work, Hatfield ran his own consulting firm out of Colorado; his clients included MCI and Fidelity Ventures. He’s spent time in former communist bloc countries lecturing on privatization of telecommunications systems, and on Native American reservations studying how to deliver wireless and Internet services. As a consultant, he lobbied for the landmark Telecommunications Act of 1996 to bring competition to local telephone markets. In short, few have his combination of technological chops and political savvy. “He’s an engineer who can speak to lawyers and other policy people in their language,” says David Nicoll, a spokesman for the National Cable and Telecommunications Association, one of Hatfield’s old clients. Hatfield won’t talk about his new gig, other than to say it “seemed like an interesting thing to do” to cap his career. (He also has signed a nondisclosure form with AOL Time Warner.) But he will say that he believes in using technology to make room for multiple players, and in having government regulate markets to ensure competition. He was a key lieutenant in Kennard’s push last year to issue licenses for hundreds of new low-power FM radio stations. The commercial broadcasters’ lobby and National Public Radio, concerned that low-power stations would interfere too much with their signals, saw to it that the initiative was dramatically watered down on Capitol Hill. “The spectrum has gotten so valuable that we all have to give a little bit,” says Hatfield. “I would argue the payoff to society from doing that is great.” Hatfield notes it’s too early to tell how much time he’ll spend on the job. But it looks like he’ll have his hands full. Last month, AOL Time Warner announced very healthy first-quarter numbers, including the addition of 2 million AOL subscribers and a 12 percent jump in cable revenues. The company also struck a national high-speed access deal with Juno. And last week the company nailed down a similar deal with High Speed Access Corp. But if Hatfield sees any violation of the company’s agreement, the FTC is ready to take on AOL Time Warner all over again. “If he sees a problem with noncompliance, he’s got a direct path to my door,” says FTC Commissioner Mozelle Thompson, who headed the agency’s review. Hatfield is also going to have plenty of help from AOL Time Warner’s competitors, and from watchdog groups like the Center for Media Education, which fiercely opposed the merger and pushed for stringent conditions. Jeffrey Chester, the center’s executive director, says his group, along with several others, recommended Hatfield for the job. “Dale is not going to roll over and ignore problems,” notes Chester. “But there will be plenty of public advocate groups in the ring with Dale, holding the chairs and the whips.” Related Articles from The Industry Standard: Terra Lycos Brought Down to Earth Will Red Tape Lick Stamps.com? StarMedia Has Good and Bad News Copyright � 2001 The Industry Standard

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