In the battle over control of Internet services, there’s a new player and his name is Mickey Mouse. Walt Disney Co. has announced that it wants the Federal Communications Commission (FCC) to split AOL-Time Warner in two: one company for content and one for distribution. This effort to use government to dislodge AOL-Time Warner from its advantageous market position is misguided and harmful for consumers.

With no cable lines of its own, Disney is clearly behind in the game of interactive Internet services. But asking the government to make up for its lack of foresight is clearly the wrong move in such a fast paced industry. Note to Disney: by the time the government makes a decision on your request, you will be even further behind. By then, cable (which is AOL-Time Warner’s distribution method) may not even be the favored method of accessing the Internet.

It’s still anyone’s guess which technology will dominate. Aside from cable, consumers could choose access through Digital Subscriber Lines (DSL), satellite technologies, and in the near future, access through your home’s electrical outlets.

Livid that AOL-Time Warner yanked ABC during the May cable sweeps, Disney has been conducting a high-stakes political battle that started with a campaign to convince local governments to force AOL-Time Warner to open up their cable lines to competitors.

When the U.S. 9th Circuit Court of Appeals ruled last month in San Francisco that high-speed cable lines are the purview of the FCC, not local governments, Disney shifted its focus to the federal agency. Disney argues that “content and broadband distribution will create undeniable economic incentives” for AOL-Time Warner to “favor its own affiliated content and to discriminate against unaffiliated content providers.” The company claims it is just trying to prevent “limiting and skewing consumer choice.” But scrape the surface a little, and consumer welfare is nowhere to be found.

Instead what one finds are the colors red for revenge and green for envy. Disney’s actions are a clear case of one big company demanding an advantage over another big firm, and asking the government to deliver it.

But in the battle between the big companies, governments should keep in mind what’s best for consumers, not for conglomerate scorecards. And the best thing for consumers is less regulation and more competition. If governments were to embrace Disney’s suggestion of monitoring and regulating AOL-Time Warner, consumers would be worse off.

Bogging AOL-Time Warner down in red tape would only serve to create inefficiencies and drive up prices for consumers. Further, if government gives Disney an advantage that it did not earn in the marketplace, it is stalling competition, not creating it. When rival firms get a leg up from government, that creates an incentive to continue to substitute political decisions for economic ones.

Economists call this government failure. Disney calls it “the public interest.” But the public has no interest in creating profits for Disney’s shareholders. Disney should stop wasting its time on lobbying, and instead find an alternative outlet for its products that it could use to compete with AOL-Time Warner. This would benefit consumers more than out of date government regulations.

There is ample proof that the market will bring consumers more choices at the best prices if left largely alone by government agencies. Just look at the high-speed Internet access market. It wasn’t until after Excite@Home cable introduced high-speed access at a price of $39.95 that Pacific Bell slashed the cost of their DSL service from $89.95 to $39.95.

If left alone, these market trends will continue. Meanwhile, the FCC should be wary.

When a sweet talking mouse comes your way asking for help in promoting the public interest, the best thing to do is tell him to be on his way. Rejecting this false ploy will ensure that consumers everywhere enjoy all sorts of Internet activities, including access to Disney.com, ranked by Media Matrix as America’s number one kids and family entertainment site.

* Sonia Arrison is director of the Center for Freedom and Technology at the California-based Pacific Research Institute.

For additional information, contact Sonia Arrison at (415) 989-0833.