001 0231

                          UNITED STATES OF AMERICA
                      BEFORE FEDERAL TRADE COMMISSION

   COMMISSIONERS:
          Timothy J. Muris, Chairman
          Sheila F. Anthony
          Mozelle W. Thompson
          Orson Swindle
          Thomas B. Leary

   In the Matter of
   WARNER COMMUNICATIONS INC., a corporation. Docket No. C-4025

   DECISION AND ORDER

   The Federal Trade Commission having initiated an investigation of
   certain acts and practices of Respondent, Warner Communications Inc.,
   and Respondent having been furnished thereafter with a copy of the
   draft of Complaint that the Bureau of Competition proposed to present
   to the Commission for its consideration and which, if issued, would
   charge Respondent with violations of Section 5 of the Federal Trade
   Commission Act, as amended, 15 U.S.C. § 45; and

   Respondent, its attorneys, and counsel for the Commission having
   thereafter executed an Agreement Containing Consent Order ("Consent
   Agreement"), containing an admission by Respondent of all the
   jurisdictional facts set forth in the aforesaid draft of Complaint, a
   statement that the signing of said Consent Agreement is for settlement
   purposes only and does not constitute an admission by Respondent that
   the law has been violated as alleged in such Complaint, or that the
   facts as alleged in such Complaint, other than jurisdictional facts,
   are true, and waivers and other provisions as required by the
   Commission's Rules; and

   The Commission having thereafter considered the matter and having
   determined that it had reason to believe that Respondent has violated
   the said Act, and that a Complaint should issue stating its charges in
   that respect, and having accepted the executed Consent Agreement and
   placed such Consent Agreement on the public record for a period of
   thirty (30) days for the receipt and consideration of public comments,
   now in further conformity with the procedure described in Commission
   Rule 2.34, 16 C.F.R. § 2.34, the Commission hereby issues its
   Complaint, makes the following jurisdictional findings and issues the
   following Order:

          1. Respondent Warner Communications Inc. is a corporation

                          UNITED STATES OF AMERICA
                      BEFORE FEDERAL TRADE COMMISSION
   In the Matter of
   WARNER COMMUNICATIONS INC., a corporation. File No. 001-0231

                     AGREEMENT CONTAINING CONSENT ORDER

   The Federal Trade Commission ("Commission"), having initiated an
   investigation of certain acts and practices of Warner Communications
   Inc., and it now appearing that Warner Communications Inc.,
   hereinafter sometimes referred to as "Proposed Respondent," is willing
   to enter into this Agreement Containing Consent Order ("Consent
   Agreement") to cease and desist from certain acts and practices and
   providing for other relief;

   IT IS HEREBY AGREED by and between Proposed Respondent, by its duly
   authorized officers and attorneys, and counsel for the Commission
   that:

   1. Proposed Respondent Warner Communications Inc. is a corporation
   organized, existing, and doing business under and by virtue of the
   laws of the State of Delaware, with its office and principal place of
   business located at 75 Rockefeller Plaza, New York, New York 10019.
   Proposed Respondent is an indirect subsidiary of AOL Time Warner Inc.

   2. Proposed Respondent admits all the jurisdictional facts set forth
   in the draft of Complaint here attached.

   3. Proposed Respondent waives:

          a. any further procedural steps;

          the requirement that the Commission's Decision and Order,
          attached hereto and made a part hereof, contain a statement of
          findings of fact and conclusions of law;

          b. all rights to seek judicial review or otherwise to challenge
          or contest the validity of the Decision and Order entered
          pursuant to this Consent Agreement; and

          c. any claim under the Equal Access to Justice Act.

   4. Proposed Respondent shall submit an initial compliance report
   within twenty (20) days of the date it signs this Consent Agreement,
   pursuant to Commission Rule 2.33, 16 C.F.R. § 2.33, signed by Proposed
   Respondent setting forth in detail the manner in which the Proposed
   Respondent has to date complied, has prepared to comply, and will
   comply with the Decision and Order. Such report will not become part

                                                                 001 0231

                          UNITED STATES OF AMERICA
                      BEFORE FEDERAL TRADE COMMISSION
   In the Matter of
   WARNER COMMUNICATIONS INC., a corporation. DOCKET NO. C-4025

                                 COMPLAINT

   Pursuant to the provisions of the Federal Trade Commission Act, and by
   virtue of the authority vested in it by said Act, the Federal Trade
   Commission ("Commission"), having reason to believe that Warner
   Communications Inc., a corporation, hereinafter sometimes referred to
   as "respondent," has violated the provisions of said Act, and it
   appearing to the Commission that a proceeding in respect thereof would
   be in the public interest, hereby issues its complaint stating its
   charges in that respect as follows:

   1. Respondent Warner Communications Inc. ("Warner") is a corporation
   organized, existing and doing business under and by virtue of the laws
   of the State of Delaware, with its office and principal place of
   business located at 75 Rockefeller Plaza, New York, New York 10019.
   Warner is a subsidiary of AOL Time Warner Inc.

   2. PolyGram Holding, Inc. ("PolyGram Holding") is a corporation
   organized, existing, and doing business under and by virtue of the
   laws of the State of Delaware with its office and principal place of
   business located at 825 Eighth Avenue, New York, New York 10019.

   3. Decca Music Group Limited ("Decca Music") is a corporation
   organized, existing and doing business under and by virtue of the laws
   of the United Kingdom, with its office and principal place of business
   located at 347-353 Chiswick High Road, London, England W4 4HS. Decca
   Music is successor to, and was formerly named, The Decca Record
   Company Limited ("Decca Records").

   4. UMG Recordings, Inc. ("UMG") is a corporation organized, existing
   and doing business under and by virtue of the laws of the State of
   Delaware, with its office and principal place of business located at
   2220 Colorado Avenue, Santa Monica, California 90404. UMG is successor
   to, and was formerly named, PolyGram Records, Inc. ("PolyGram
   Records").

   5. Universal Music & Video Distribution Corp. ("UMVD") is a
   corporation organized, existing and doing business under and by virtue
   of the laws of the State of Delaware, with its office and principal
   place of business located at 10 Universal City Plaza, Universal City,
   California 91608. UMVD became the successor corporation to PolyGram