PROBLEM TAKES CARE OF ITSELF

Having spent nine months mulling over the proposed merger ofAmerica Online Inc. and Time Warner Inc., it wasn't enough for theFederal Communications Commission to kiss the happy couple and wishthem well. This was the biggest new economy merger ever; surely thegovernment had to do something.

And so it did, but not enough to matter. And that's fine with me.

I've long been fretful about the perils of media conglomeration.Blame it on the event that brought me to Boston - the Detroitnewspaper strike of 1995. The city's two major papers formed a jointoperating agreement and used their newfound power to crush theirunions, and chase me all the way to Beantown. Where was Janet Renowhen I needed her?

Having had a taste of Big Media in action, I wouldn't have beenheartbroken had the government blocked the AOL-Time Warner merger.The new company combines the biggest Internet provider with thesecond-largest cable operator. That's a lot of power.

Still, it's not the same thing as allowing the only two papers intown to form a cabal. The new company is nowhere near a monopoly.There are plenty of alternatives to AOL Net access, and if you don'tlike Time Warner cable, you can always buy a satellite dish. Allthings considered, it's hard to see any harm in the AOL-Time Warnermerger.

Not that the government didn't try. Spurred on by consumer groupsand rival companies, they've cobbled together some curious mergerconditions. There's this "open access" business, for instance. Thenew AOL-Time Warner must allow at least three smaller Internetproviders to deliver services on the company's high-speed cable modemsystem. Remember that AOL itself had led a massive, nationwide openaccess campaign against the cable companies, then had a curiouschange of heart when it decided to become a cable company.

So it serves them right to be forced to open their network. Butit'd be fine by me if they'd tried to keep it closed. There are ahost of alternative high-speed access technologies either availableor being developed.

DSL's hit a rough patch, but only because the phone companies havedone such a lousy job delivering it. The basic technology works fine,and could be made available to about 80 percent of the US population.There are satellite- and land-based wireless Net systems, like theone being tested in Boston right now by WorldCom Inc. In a year ortwo, people in most US cities will probably be able to get all thehigh-speed Web access they want by hanging up a small antenna. And ifAOL-Time Warner were dumb enough to block access to its system, thisnew technology would catch on even faster.

The open access rule does no harm, I suppose. But the public wouldscarcely have been harmed if the FCC had left it out.

Mind you, I'm not arguing that the federal regulators are fools.Indeed, I see the hand of Solomon in the FCC's pronouncement on AOL'sinstant messaging monopoly. The ability to flash brief notes toothers using Internet-connected devices has become sensationallypopular, and AOL, with its Instant Messenger and ICQ systems, is byfar the market leader.

Indeed, AOL's grip on instant messaging is tight enough to inspirea delicious bout of hypocrisy from Microsoft chairman Bill Gates.Even as the Feds try to rip his company limb from limb, Gates was onthe phone to FCC chairman William Kennard, demanding that thegovernment force open AOL's sealed data protocols for instantmessaging. Sure, Bill. Only, you go first. Let's see the source codefor Windows. No? Why am I not surprised?

Just as Microsoft won its market domination by outfighting itsrivals, AOL captured the instant messaging market by realizing itsvalue years ahead of Microsoft or anybody else. Why should thecompany cede its lead to a pack of losers?

Apparently, the FCC feels the same way, but couldn't bring itselfto say so - Gates is so sensitive, you know. So AOL will be forced toopen up its instant messaging, but only when it begins offering a"next-generation" version, with stuff like video conferencing builtin. Of course, AOL is now hard at work on just such a product. Lookfor it on April 1, 2056.

Meanwhile, the other instant messaging companies are testing auniform data protocol that will allow all of their products to talkto each other. Once such a system is launched, it'll quickly rivalthe AOL service in popularity, thereby forcing AOL to open up itsnetwork or become irrelevant. Once again, instant messaging is a"problem" that the market will easily solve.

Think of the time and money the FCC could have saved, simply byasking me. Still, there are all those rival companies and theirallies in Congress; something had to be done to placate them. Justnot very much, thank goodness.

Hiawatha Bray is a member of the Globe staff. He can be reached bye-mail at bray@globe.com.