The NewsHour with Jim Lehrer

JIM LEHRER: On the NewsHour tonight, Ray Suarez sorts through the facts and prospects of the big AOL-Time Warner merger. Two observers update the Syrian-Israeli talks, which went into recess today. Then, two in memoriam segments: Elizabeth Farnsworth looks at the work and impact of novelist Patrick O'Brian, and we again experience a 1984 discussion with Admiral Elmo Zumwalt and his son. It all follows our summary of the news this Monday.

NEWS SUMMARY

JIM LEHRER: America Online and Time Warner will come together in the largest corporate merger in history. That announcement was made today in New York. The deal involves AOL Buying Time Warner for about $166 billion in stock. The new company will be called AOL Time Warner. Its assets will include "Time" Magazine, CNN, Warner Brothers, and HBO, in addition to AOL's Internet services. AOL Founder Steve Case will be the chairman. And he spoke at the New York news conference.

STEVE CASE: We are very excited about joining forces with Time Warner because we share a common vision for the future. Time Warner is the first major media company to not only recognize but can fully embrace the new interactive world. Together we can change the future for the better. American Online and Time Warner are already long-time partners, and AOL-Time Warner together will be a perfect fit as one company.

JIM LEHRER: News of the merger helped drive stock market gains today. The Dow Jones Industrial Average closed up nearly 50 points at 11,572 for another record high. The NASDAQ Index had its biggest-ever one-day point gain. It closed up more than 4%, or 167 points, at 4049. We'll have more on the AOL-Time Warner story right after this News Summary. AOL also made another announcement today. It was that of a three-year alliance with PBS, which will provide programming content in exchange for AOL promotion of some PBS programs. Israel and Syria closed a week of peace talks today in Shepherdstown, West Virginia. They're to resume January 19 at a site to be determined. There were no agreements in the first round, but President Clinton said he was not discouraged. He spoke at the White House.

PRESIDENT CLINTON: These people really talked about the substance of their differences for the first time. They were very open. They were very candid. They covered all the issues. And I think that... I think they broke a lot of ground, but it's tough. I told you it was tough in the beginning. I still think we can get there, but they're going to have to come back here determined to do so, and I believe they will.

JIM LEHRER: We'll have more on this story later in the program tonight. A Miami judge ruled today that a six-year-old Cuban boy should not be sent back to his father in Cuba for now. The judge granted interim custody of Elian Gonzalez to his relatives in Florida, pending a hearing on March 6. The U.S. Immigration and Naturalization Service had said the boy must be returned by January 14. But Cuban exiles protested that ruling, and today, they claimed victory.

SPOKESPERSON: We have always said that we're looking for the second half of a miracle. I think that second half of a miracle is beginning to materialize now with this decision. We made also our pledge, and this remains our pledge, that in the event that the court hears the case of the child and that court decides that the child should go back the Cuba, we will respect it.

JIM LEHRER: The boy was rescued at sea in November, but his mother drowned in the attempt to get him to the U.S. since then, his father and the Cuban government have been demanding his return. In Chechnya today, Russian troops battled to hold key towns under rebel attack as casualties mounted. We have this report from Julian Manyon of Independent Television News. (Sound of machine gun fire and explosions)

JULIAN MANYON: Russian helicopter gun ships are blasting Chechen positions after a surprise rebel offensive that has caught the Russian army off balance. (Gunfire) While the Russians were concentrating on the siege of Grozny, the rebels staged commando raids on three other key towns that the Russians believed were secure. Heavy fighting is reported to be going on in Chechnya's second city, Gudermes, with the Russians admitting that an attempt to send in reinforcements failed; and rebels are also battling Russian troops in Argun and Shalif, which were captured by the Russians with a fanfare of publicity last month. Meanwhile, attempts to take Grozny have bogged down, with Russian troops still pounding the city, but forced to take cover when the rebels fire back. Some of the soldiers are openly grumbling about the difficulty of capturing the Chechen capital. (Speaking Russian)

SPOKESMAN: (translated): There is no point in fighting our way in. We will surround them, cut off their lifelines, and wait until they surrender.

JULIAN MANYON: The Russians are now admitting to serious losses, official figures of 26 dead, 30 wounded in the last 24 hours, and the real totals are likely to be more than that.

JIM LEHRER: The U.N. Security Council took up a health issue today for the first time, the AIDS epidemic in Africa. Officials said AIDS killed two million Africans in 1998 alone. That was ten times the number killed in wars. Vice President Gore announced the Clinton administration would ask Congress for $150 million to attack the problem. It would pay for education, prevention, and vaccine research. At the U.S. Supreme Court today, the Justices let stand lower court decisions on AIDS coverage and tobacco lawsuits. Without comment, they turned away a challenge to Mutual of Omaha's Policy on AIDS-related illnesses. The company provides less coverage for those ailments than for other medical problems. The court also refused to allow union health plans to sue the tobacco industry for the cost of treating sick smokers. And that's it for the News Summary tonight. Now it's on to the coming together of AOL and Time Warner; a pause in the Israeli-Syrian talks; some words about writer Patrick O'Brian; and a second look at Admiral Zumwalt and son.

FOCUS - MEGAMERGER - TIME WARNER

JIM LEHRER: Ray Suarez has the big merger story.

RAY SUAREZ: Today's blockbuster merger unites the biggest name in the world of traditional media with the biggest in new media. New York-based Time Warner, the world's largest media and entertainment company, produces television, movies, music, and magazines. The company owns CNN, HBO, the Cartoon Network; magazines like "Time," "People," "Fortune," and "Sports Illustrated"; and the Warner Brothers movie, television, and music studios. Time Warner employees 70,000 people, and before today was valued at about $100 billion. Time Warner itself is the product of several mergers, including bringing together Time, Inc. with Warner Brothers, and most recently folding Turner Broadcasting System. AOL, or America Online, based in Virginia, is the nation's largest online company, providing more than 20 million subscribers with access to the Internet. About 12,000 people work for AOL, and prior to the announcement, it was valued at $163 billion. America Online has also previously merged with other companies, including Netscape and CompuServe. The heads of both companies announced the deal at a New York press conference this morning. AOL will own 55% of the new company; Time Warner will own 45%. Time Warner's chief, Gerry Levin, will be the chief executive. He said the new company starts out with a large customer base.

GERRY LEVIN: You have all the obvious statistics here. When you look at the 22 million subscribers to AOL and CompuServe, the 135 million additional registered users for AOL, the 120 million readers of the more than 30 magazines of Time Inc., the 35 million subscriptions to HBO, its pay television services, the 20 million homes patched with digital cable. For TNT and TBS, our entertainment networks, they're received by 75 million homes. And probably, very significantly, and you'll hear from them shortly, CNN is really accessible to a billion people around the world. And, in fact, I view us and our combined company as the trustees for a remarkable heritage.

RAY SUAREZ: AOL's Steve Case will be the chairman of the newly proposed company.

STEVE CASE: This merger will launch the next Internet revolution. Building on those technological advancements and making the most of them to benefit our consumers. AOL-Time Warner's assets will include the world's largest Internet dialup network, a whole array of cutting edge interactive technologies and cable systems that reach more than 20% of American households, making it the second largest system in the nation. But there is another reason why this merger is so important, and it is not its size. It's really the company's potential for innovation and creation of new value and new choice for consumers. If we are going to develop all of the Internet's great possibilities, we can't just come up with faster, more affordable ways to deliver information. We also have to enrich and expand that information, making it even more central and more valuable to people's lives. AOL Time Warner will offer an incomparable portfolio of global brands that encompass the full spectrum of media and content, from the Internet to broadcast and cable television, to film, to music, to magazines, and to books. Ultimately, this is about serving consumers. So I want to talk a minute about what this will mean for consumers. It will mean new kinds of opportunities for entertainment. It will mean new opportunities for shopping for a variety of products and services that will improve their lives and add convenience to their lives. It will mean new opportunities to communicate, learn about one another, and learn about the world around them. So what will this mean for our core business? The merger will speed the delivery of media-rich broadband Internet services to mass market consumers and drive the growth of advertising and e-commerce across all of our combined brands. This is the first time a major Internet company has combined with a major media company and the possibilities are truly endless.

RAY SUAREZ: The two corporate heads were asked how their management teams would work together.

JOHN HIGGINS: Do you have a lot of cooks on stage, a lot of people with co's in their title? I mean, there's going to be a power shift. How does that work out?

GERALD LEVIN: I thought it was a plus that we had this group up here because it gives some indication of, not only the depth, but you can, you know, look at body language and see the interaction or the relationships that already exist. (Laughter) (applause) We're... we've become a company of high fives and hugs.

RAY SUAREZ: The merger sparked activity on Wall Street today. Time Warner stock surged up more than 40%, while AOL fell more than 2%. The $166 billion deal must be approved by federal regulators and shareholders from both companies.

RAY SUAREZ: Analysis of the deal now, from Jim Ledbetter, New York bureau chief for the "Industry Standard," a weekly newsmagazine covering the Internet economy; Bruce Leichtman, director of media and entertainment strategies at the Yankee group, a technology research and consulting firm; David Bennahum is a partner in an Internet venture capital firm, a contributing editor of "Wired" magazine, and the author of "Extra Life: Coming of Age in Cyberspace"; and Norman Solomon, syndicated columnist and author of the recent mass media critique, "The Habits of Highly Deceptive Media." Jim Ledbetter, why this merger? Why now? What did each want from the other?

JIM LEDBETTER: Well, I think, as you point out with your question, this is really a merger that allows each of the companies to get a piece of the Internet future that they could not themselves provide. In Time Warner's case, AOL really helps them move onto the Internet, you know, in a coherent and mass fashion. They were one of the early old media companies to embrace the Internet and have had some successes there, but not all of their attempts to organize the vast content that they have, have been real hits with consumers. For AOL, I think this is largely a deal about technology; that is to say, America Online has been the dominant leader in what might be termed the sort of first stage of Internet usage, that is people going on-line for e-mail and web surfing. But they have not had much of a strategy to go to the next level, so-called broadband access, where access to the Internet would be much faster and will allow for a much more complicated tasks. For example, one of the things the two companies talked today about is streaming video through your computer, whether that would be you just call up a video that you want to see, or to watch live news through the Internet in a way that one would through television, downloading music, these kinds of applications that right now are very difficult to do at the access speeds that most consumers have to the Internet. Time Warner, with its Road Runner service, potentially has the ability to deliver that, and AOL wants to be the content on what's going into those homes. So it makes sense from a strategic perspective, and of course, it also creates a globally powerful company that combines both old media power and content with new media speed.

RAY SUAREZ: Bruce Leichtman, AOL has been making strategic alliances with various content providers for years. I've been watching various network news spots using AOL as a platform for a long time. Why buy a great big company like Time Warner?

BRUCE LEICHTMAN: Well, I think to see this purely as a technology play is in the seeing the full range of media content that this company brings. Time Warner is the number one media and entertainment company in the world, creating 30 billion dollars of revenue every year. And you take with it all the assets that Time Warner has, that runs from Bugs Bunny and Superman to CNN, "Sports Illustrated", "Time" Magazine, these are some of the best brand names in the world. So, yes, Time Warner's technology, which actually only reaches 30% of Americans, there's a lot more deals that have to be done for them the truly get into that broadband play, but we can't look past this rich content asset that Time Warner possesses.

RAY SUAREZ: So what's in it for Time Warner?

BRUCE LEICHTMAN: What's in it for Time Warner is if you look at the company as a whole, $30 billion of revenue, which is tremendous, growing at about 10% to 15% a year, but where were they going to go from there? A great business, but what is the opportunity there? The opportunity is in the Internet. And as I look at it, I see that the torch has been passed to a new generation, and the new generation is the Internet. And that's where the opportunity lies in increased revenue beyond the 10 to 15% that Time Warner is currently making.

RAY SUAREZ: So David Bennahum, the last stamp, if anybody needed it, that the Internet is a mature business now that it's able to take on a giant like Time Warner?

DAVID BENNAHUM: Yeah, I have to agree a bit with Bruce there. What we're seeing here essentially is the maturation of the Internet as the platform for what will be the 21st century entertainment media universe. And what we've seen in this deal is not merely the conglomeration of some technology with some media, but essentially first shot across the bow of the 21st century media landscape. And what that will be predicated on is the idea that we can all get our entertainment and our news through this global Internet network. And this has ramifications for television networks, for cable networks, for radio networks. This is the beginning of a profound transformation, and so what Time Warner gets out of this is, first, advantage, moving enter the Internet. What AOL gets out of this is the incredible access of that content. And now what they both have to do, one of the many challenges they face, is to say, well, how do we then begin to create this next generation of media and content? How do we leverage all these connections in terms of marketing, in terms of relating to your audience? Because beneath all this is this unrelenting fact, which is that the Internet has fragmented and created a very heterogeneous media landscape. And it's very troubling for these big companies because we've shifted from this homogeneous, simple, you know, the three networks and a couple cable stations, to this great wash of stuff. Part of what this merger now has to do is figure out how to aggregate all these people, how do we in a sense capture their attention in this fragmented world? That's why you're going to see more and more of these very big mergers between Internet companies and well-known media companies. It's all about trying to recreate an ability to capture the consumer's, capture the public's attention in an increasingly fragmented world.

RAY SUAREZ: But why spend billions to in effect recreate what you can already do? People don't want to watch television on their computer. They usually have a television just a little ways away from where they're sitting at that computer. Time Warner and CNN have spent millions making televised versions of their magazines that almost nobody watches.

DAVID BENNAHUM: That's right, Ray. It's not about... It would be naive to think this is about watching TV on the Internet. It's not. It's about creating a new media eventually that uses elements of television and the Internet, media that's both interactive. The advertising will probably all be response-based, where you can click on the ads, respond to the ads. And the news and the shows will ultimately have increased interactivity or aspects of them that are interactive. So it's not merely let's put TV on the Internet. No. It's let's use assets from television. Let's use assets from the Internet to create something truly new. And what that is, we're not sure. I don't think anyone really knows yet. But this is the new phase of the Internet. It's creating this new paradigm for media.

RAY SUAREZ: Normal Solomon, what do you make of the deal?

NORMAN SOLOMON: What I make of it is we have a continual mass media discussion, and in the last couple minutes I think have typified it, to discuss what is in it for Time Warner, what's in it for AOL and relatively little discussion of what's in it for the public. I think primarily what's in it for the public is a narrowing of choices under the illusion of having more diversity. I'm afraid that we may look back on January 2000 as the time when de facto, the world wide web became essentially the world narrow web, which is counterintuitive because there's all this talk today, all this smoke being blown about how AOL and Time Warner will create these multiplicity of choices through the new media. The reality is, however, that these new media are being used to herd and goad and leverage the consumers, the media consumers into essentially cul-de-sacs where the links in these various new media are self-referential, not often labeled as such. People are going to be directed to and encouraged to go to various media products on the Internet and elsewhere under the guise of giving them a get deal of choice. I mean, we see that now with the corruption of more and more search engines and portals and so forth where it seems that, for instance, the 22 million people who already access the Internet through AOL in this country, it seems as though, hey, they're free wheeling through what used to be called the information superhighway, now increasingly in the mass media is simply being looked at as avenues for e-commerce. So, I think this is a tremendous blow for the potential for democracy in our society through genuine wide-ranging discourse. And we have not only in the news-gather, news-dissemination business, but as Gerald Levin said a few hours ago, the cutting edge here is what is often called entertainment: And that as well has to do with what people feel their possibilities are. We're essentially seeing the mass distribution of corporatization of consciousness, and this step today is a big stride down that very slippery and very dangerous road.

RAY SUAREZ: But weren't these companies that were already doing essentially different things? They're not apples merging with apples or oranges merging with oranges.

NORMAN SOLOMON: Well, there are reasons why they've merged -- because they feel there's a positive synergy. They can do a gardening process in different parts of the garden that will help each other to grow what they want to grow. And what they want to grow is profits. We heard one of these kingpins in the setup piece a few minutes ago talk about being trustees. Well, they are private trustees. They're not public trustees. And let's not forget the Internet was developed through enormous public subsidy, through taxpayer dollars. And yet now we're in a situation where these mergers are being greeted with exclamations of, if not surprise, then at least, wow, this is amazing; this is humongous, $350 billion. But the very mass media they're increasingly corporatized are not asking the fundamental questions about these mergers. And I think people who are sitting at home contemplating what this really portends need to look at demanding and need, in fact, to demand antitrust action because in lieu of that, this is going to be looked at as a horrendous, perhaps irreversible step, towards the concentration of media control in very, very few hands.

RAY SUAREZ: Bruce Leichtman, what do you think of that?

BRUCE LEICHTMAN: Well, I think we have got to look at how AOL got to where they are today. There are scores of ISP's out there that consumers can choose from, yet 20 million consumers in America have chosen AOL amongst the scores of options they have there. Consumers do have freedom of choice, and they've chosen to go to AOL.

NORMAN SOLOMON: Well, freedom of choice is to choose from choices that are handed down on high through marketing -- I'm afraid a nice theory, but a ludicrous claim that somehow people have all these different choices irrespective of the concentration of capital. The reality is there is enormous capital vested in these two companies, and they have the capability now to shift the entire terrain to tilt it in a certain direction so that when people go on-line, they're pointed in certain direction in that process.

BRUCE LEICHTMAN: But Warner... Time Warner-AOL have to look at how to leverage their assets the best.

NORMAN SOLOMON: But that's their problem, that's not the public's problem.

JIM LEDBETTER: Can I interject something here?

RAY SUAREZ: Sure.

JIM LEDBETTER: I think what Norman Solomon is saying is indisputable to the following extent. The Internet has grown from a sort of cacophonous medium, preaching the doctrine of democracy and existing largely outside of the realm of organized mass media into a division of mass media in very, very rapid succession. I don't know that today's announcement is necessarily quite as momentous as he's making it out to be, but certainly that trajectory has been an extremely rapid one. But there is another component here about the definition of public service, and that is whether or not consumers are really dying to get broadband access in their homes and workplaces. To date, there's been very little concrete evidence that that's what people want. I think that they may, in fact, want it and not know they yet want it. But to date, even Time Warner's Road Runner service has only about 350,000 subscribers, which is very small in these terms. But in order to bring that technology to people's homes, someone has to pay for it. Now, one can accept the premise that consumers have to pay for it or not, but the reality is that the history of making electronic media into mass media in this country is usually done by monopolies. Certainly the telephone developed that way. Television under the guise of free networks and a great deal of government control grew up that way before layers of public television and cable television were layered on. I'm not saying one has to accept that, but that is the way that these mass media tend to grow.

RAY SUAREZ: Well, let me go to David Bennahum, because part of what was portrayed as the mystique of the Internet was that you could grow without agglomerating huge companies, large amounts of capital. It was the anti-old medium.

DAVID BENNAHUM: That's right. The original ethos of the Internet in the early 90's when people first got aware of it was the idea of this information superhighway. And the image we had of it was of this global educational library, this network that will lead to a renaissance of discourse, democracy, this return of a kind of Jeffersonian ideal of the citizen educating himself or herself, and then we migrated in the mid-90's, around '95, into this image of the Internet as a sleaze, dark alley with child porn and pedophilia and all these things to be afraid of. And then around 1997, 1998, we segued into the Internet as a great strip mall, and now we find ourselves in the new narrative of the Internet, which is the Internet as a great media delivery tool. And what's worrisome about this, as we've been beginning to discuss here, is the question of the public voice. This is all happening so quickly that are we losing a chance right now to step back and make some sense of this and ask ourselves, what is the real public good in this, are we going to lose this idea of a heterogeneous revitalization of democracy and civic virtue through this communications network and turn into this more consolidated environment? The Internet did not occur by accident. It was constructed by human intention. And likewise, we should be careful today to assume that the market can just go ahead and create these new structures and that will have the best interest of everyone in mind. It won't necessarily.

RAY SUAREZ: David, I'm going to have to stop it there. Panel, thanks a lot for being with us.

DAVID BENNAHUM: Thank you.

JIM LEHRER: Still to come on the NewsHour tonight, the Syrian-Israeli talks; a remembrance of writer Patrick O'Brian; and a second look at Admiral Zumwalt and son.

UPDATE - PATH TO PEACE

JIM LEHRER: Now, our Middle East talks update. State Department Spokesman James Rubin briefed reporters this afternoon in Shepherdstown, West Virginia.

JAMES RUBIN: During the course of the Shepherdstown peace talks this week, we have had intensive negotiations on all of the key issues. All four committees have been established and have been working both formally and informally. We have presented a working document to the parties that lays the groundwork for a serious effort to bridge the important gaps that remain. We have decided to recess the talks for a short break. Prime Minister Barak and Foreign Minister Sharaa have agreed to return to the discussions and negotiations on January 19 to continue the negotiations and work further towards a peace agreement. I think it's fair to say that we believe that there is a historic opportunity that now exists, and we hope both sides seize this historic opportunity. Historic opportunities don't come around too often, or they wouldn't be historic. And so there are any number of issues that could make it harder for such an opportunity to be seized, and we think that one has to bear in mind that intervening events could make it harder, and so, yes, we would like to see this opportunity seized. At the same time, we recognize that these decisions are painful and serious ones for the peoples of the region and the governments in the region, and so we recognize that they're going to have to proceed at a pace they're comfortable with because ultimately it is they who will have to make the decisions.

JIM LEHRER: And to Hisham Melham, who has been covering the talks for the Beirut newspaper, "As-Safir"; and Joel Singer, who served on the Israeli delegation in the previous talks with Syria. He is now a lawyer in Washington.

JIM LEHRER: Hisham, how do you read this recess? Give us an overview of where things assistant tonight.

HISHAM MELHEM: This is a pause because of the inability of both sides to achieve substantive progress during these talks here, specifically on the issue of territory on the withdrawal. The committee on the withdrawal... on border committee met for the first time yesterday, Sunday, for an hour-and-a-half only. The Israelis over the last week refused to discuss this issue formally in the committees. So for the Syrians, this was an extremely frustrating situation, and it's very clear that unless there is progress on the border issue, I don't expect any progress on the other committees.

JIM LEHRER: Is the problem whether or not Israel's going to withdrawal, or is it how far they're going to withdrawal, when they're going to withdrawal or is it how far they're going to withdraw, when is it going to withdraw, or what, all of the above?

HISHAM MELHEM: Essentially all the above, but essentially the extent of the withdrawal, whether it's going to with withdraw to the area, the line of June 4, 1967 on the eve of the war of 1967. I think what you could say is there has been some progress in structuring the talks. Now there is a document written, an American document, which could be the basis in the future for a peace deal. This document enumerated the areas of agreement and disagreements and tells us where we are in terms of negotiations. So, on the issue of procedure, there has within some progress. For the first time they discussed these issues seriously in a tone that was devoid of recrimination, we were told. But when it comes to substance, there has been very little. So Shepherdstown, it was a plus in the area of procedure, but very little progress in the area of substance.

JIM LEHRER: Joel Singer, give us a clean, clear, short version of the Israeli position on the withdrawal thing, as to how far they are willing to go and where the line should be drawn, et cetera.

JOEL SINGER: I don't think that there has been any Israeli clear definition of where Israel is ready to withdraw to. I think that there was a formula presented repeatedly, according to which the depths of the withdrawal would be proportionate to the depths of peace and security arrangements that Syria is ready to provide to Israel. And because the other part of the equation has also remained unclear until now, I think that both sides of the equation are unclear, that is to say Israel is refusing to clarify its side of the equation until the Syrian delegation clarifies its side.

JIM LEHRER: So the position of Israel is that until we know what the security arrangements are going to be, we don't know where we want the put that line?

JOEL SINGER: Exactly.

JIM LEHRER: And is that the way you understand it, too, Hisham Melhem?

HISHAM MELHEM: Yes, that's the Israeli argument. But also the Syrians would argue that if we're going to talk about security arrangements, at least we would know from where those securities arrangements should begin, i.e., where the demilitarized zones should begin, if we don't know the line of demarcation between the two countries, how can you talk seriously about the security zones -- demilitarized zones, how can you talk about water resources if we don't know where the Syrian line will be at the northern shore of Lake Tiberius, for instance, and so on and so forth. I agree, at one time both sides should make it very clear. The Syrians have said that they accept full peace in return for full withdrawal. And you can hammer out the details. I think what happened here in Shepherdstown is that Ehud Barak was negotiating with both the Syrians as well as the Americans. He was negotiating with the Syrians to get a better deal for himself, but also he was negotiating with Bill Clinton to get the right price, quote unquote, for the deal, in terms of military hardware and upgrading the strategic relationship with the United States, as well as money to finance the withdrawal from the Golan.

JIM LEHRER: Let me ask Joel Singer about that, as far as what Barak's position was. Do you agree with that?

JOEL SINGER: Yeah. I think that what has become clear over the last years, not just the last week, is that Syria is not willing to provide the kind of security arrangements that Israel is interested in. And the question that is now posed before Barak and the Israeli government is whether they can be some sort of supplement provided by the United States in terms of providing Israel with a substitute for the strategic Golan Heights that together with the limited security arrangements proposed by Syria can make the deal happen.

JIM LEHRER: Such as what?

JOEL SINGER: Such as a system that would provide Israel with sufficient early warning and would provide Israel with a stronger response in case of a surprise attack.

JIM LEHRER: And that would be provided by the United States rather than Syria?

JOEL SINGER: In lieu of a sufficient Syrian security package.

JIM LEHRER: Is there any indication on what the United States' willingness is to do or not do that?

JOEL SINGER: I don't know. I know only that in parallel to the Israeli-Syrian negotiations, there is also another element of the Israeli delegation that is negotiating with the DOD on the size...

JIM LEHRER: Department of Defense -

JOEL SINGER: Department of Defense...on the size and contents of such a security package that Israel might receive.

JIM LEHRER: Let's go back to the general point that Hisham Melhem made a moment ago, that yes, there is a serious problem here on specifics, but Shepherdstown did make some progress on style and on tone, et cetera. Do you agree with that?

HISHAM MELHEM: Well, let me give you one example, and you can be the judge of whether this is progress or not. Almost four years ago I participated in the Wye negotiations with Syria in which with the exception of Foreign Minister Shara, most of the Syrian delegation was the same. We were shaking hands at the time. We were sharing the same eating places. We were eating dinners and lunches together. Now I hear they are eating separate places because Syria doesn't want its delegation to share the same place with Israel and no handshake. Is this progress? I don't know.

JIM LEHRER: Hisham Melham, how would you answer that?

HISHAM MELHEM: Well, look, I mean, this was Ramadan. They had separate times for eating in the trilateral meetings with the president and the American team. They sat at the same tables. They ate together. They broke bread. I mean, what do you want more than that? You cannot be more intimate than that while you're engaged in serious discussions about fateful issues and fateful decisions.

JIM LEHRER: We have discussed that before.

HISHAM MELHEM: Yes. I don't want to revisit it again.

JIM LEHRER: Yes, but that some things -- eating and shaking hands are important for the Israelis and not so important for the Syrians.

HISHAM MELHEM: Well, it's not that. I mean, the Syrians came here thinking that in a week or ten days we will make some headway on the issues of substance. And Israel is, as I said, they drag their feet on allowing a formal meeting for the border committee and the water committee until the last day. So you had seven days passing, until some day when they the committee on borders, the committee on waters had short meetings, official, formal meetings, while the committee on security arrangements and the committee on normal peaceful relationship, these are the two issues of paramount importance for the Israelis, were held formal discussions that lasted for hours on end.

JIM LEHRER: All right. Joel Singer, beginning with you, all of this said, and they've taking a recess, they're coming back on January 19, is there any reason to believe these things are still not on track toward a settlement?

JOEL SINGER: Oh, things are on track. This is something that I need to clarify, notwithstanding the somewhat moody atmosphere as a result of the fact that no agreement was reached within a week, we should look at things with a perspective. The bumps in the road, the gloomy faces, the walking back home without any signed agreement, the disagreements are all the part of the negotiating process. The negotiations are not over. The United States will continue to work with the parties independently and individually throughout the ten-day break between the two sessions. Sitting together individually, deliberating the position of the other parties respectively is part of the negotiations. Don't forget that President Assad is not present in these negotiations. Think about the practical difficulty for Foreign Minister Sharaa to report to Assad on a daily basis to get changes in the mandate. It's a good one hour-and-a-half drive between the Syrian embassy and Shepherdstown each way. So they need the time to consult and come back with adjusted positions.

JIM LEHRER: So you... we've got to go. Hisham Melhem, you would agree this isn't over by a long shot? Things are still moving.

HISHAM MELHEM: No, no, no. They will be back. There will be another round and another round. And I think the President today was extremely hopeful when he talked about two months wrapping up these agreements. I think he's too ambitious, but I think, as we've said earlier, these issues are complex, but they're not insurmountable.

JIM LEHRER: All right. We'll leave it there. Thank you both very much.

FINALLY - IN MEMORIAM

JIM LEHRER: Finally tonight, we note the passing of two men of the sea: One who wrote about it, the other who served on it. Elizabeth Farnsworth in San Francisco begins.

ELIZABETH FARNSWORTH: The author Patrick O'Brian died at age 85 in Dublin last week. He wrote 20 novels of the sea, beginning with "Master and Commander" in 1969 and ending with "Blue at the Mizzen" last year. The books chronicle the lives,loves, and wartime battles of British naval officer Jack Aubry and his friend, a ship's surgeon and spy, Stephen Maturin, during the Napoleonic wars of the early 19th century. O'Brian was little known in this country until 1989, when W.W. Norton began publishing his works, including the older ones. To date, more than two million copies have been sold. They seem to evoke strong passions in their fans, one of whom is Richard Snow, editor in chief of "American Heritage" Magazine, and an author of two historical novels himself.

Mr. Snow, you wrote in the "New York Times" Review about the sea novels, that O'Brian "reconstructed a civilization on the foundations of the Aubry-Maturin friendship." Explain that.

RICHARD SNOW: His two great characters are a British sea captain in the Napoleonic wars and the British sea captain's surgeon, best friend named Stephen Maturin. These two men could not be more different in temperament. Jack Aubry is gruff, burly, powerful, sort of a buffoon ashore, totally capable at sea and Stephen Maturin, whom he meets in the very first moments of the first book when, in fact, he gets in a quarrel and almost a duel with him in a concert, is shy, slightly shabby, quiet, absolutely brilliant, and a, as it turns out, a dedicated and effective counterrevolutionary spy against Napoleon, who of course at this time, Britain is fighting alone.

ELIZABETH FARNSWORTH: And tell me what you meant when you said that the author reconstructed a civilization on their friendship.

RICHARD SNOW: Well, the novels are quite extraordinary, I think, in that they work on every level. On the first level, they are terrific sea stories, adventure stories, but he manages, O'Brian, very skillfully and fully to summon up an entire world. He has his characters fall in love. He has his characters make friends. And over the course of 20 books, the women, the men, everybody, everyone who inhabits this becomes very real to us, even though they're living in a civilization far beyond the memory of any of us. It is a very different world. It is the world of early 19th century Britain. It is the world before steam power. It is the world before anything we associate with our world. And, yet, these people are entirely familiar to us because of their feelings vibrating with ours. And everyone I know who has gotten absorbed into these books believes in these people, they're every bit as alive and immediate as their own friends and in-laws.

ELIZABETH FARNSWORTH: He creates this role partly by using the language of the times, doesn't he?

RICHARD SNOW: Yes. He. It takes a little... I think it takes a little while to get into it. He makes no concessions to the modern ear. These people speak the way he feels that people spoke then. And it takes some getting used to. There are different cadences. There are arcane expressions. But once you're into it, it flows right along. It feels almost as though you're extremely fluent in a second language. And I find myself embarrassing myself - you know -- by suddenly popping out with suddenly popping out with some archaism like - you know -- give you joy of it when a friend has had some good fortune.

ELIZABETH FARNSWORTH: Would you read one of your favorite passages please.

RICHARD SNOW: Yes. This is how he introduces... it gets a little sensitive -- how O'Brian introduces his two characters in "The Hundred Days," which is next to the last of the books in the sequence. We are watching the British fleet come into Gibraltar. "The leading ships were close now, enough for people to be seen. The young lady gently took her father's telescope. 'Is that the famous Captain Aubry, she asked? Why, he's short, fat and red-faced. I am disappointed.' 'No, booby,' said her father. 'Come, child. Don't you see the broad pennant?' 'Oh, yes, sir,' she replied, training her glass on the Pamone's quarter deck. 'Pray, who is that very tall, fair-haired man in a rear admiral's uniform?' 'Why, Lizzie, that is your famous Jack Aubry.' 'Oh, isn't he beautiful? Who is that little man beside him in the black coat and drab britches?'

' Oh, that will be his surgeon, Dr. Maturin. They all sail together. He can clip off an arm or a leg faster than any man in the service, and it is a joy to see him carve a saddle of mutton.'"

ELIZABETH FARNSWORTH: Tell us about O'Brian as a person. You knew him.

RICHARD SNOW: Well, I did. I met him several times. He is almost as... I felt almost as much a magnificent creations in these series, a figure of the early 19th century. He is a man of the most extreme courtesy, although I was quite terrified of him most of the time I was with him. In one of the books he has Stephen say to his love, Diana, that he does not consider question and answer a civil form of conversation. And I think it was quite clear that O'Brian did not consider it that way either. Now for me this seems like sort of the only form of conversation. So, I dealt with him with great caution. He dealt with me with great courtesy. But it was always as though you were in the presence of someone who might well have been born while Lord Nelson was still alive.

ELIZABETH FARNSWORTH: He didn't like questions about his personal life partly because he was not what he seemed to be, isn't that right?

RICHARD SNOW: This just began to come out after he achieved his stateside celebrity. And as his fame grew, people began to dig into his background. And, yes, they found he had basically invented a life for himself, including a change of name. I was sort of shocked and fascinated and also kind of shied away from the story. I thought, here is a guy who's given me like 20 years of pure pleasure. If he doesn't want me to know about who he is, I'll back off.

ELIZABETH FARNSWORTH: Mr. Snow, why do you think... Why do you and why do other people love his books so much? You've told us about them, but what really grabs you so much?

RICHARD SNOW: I think, as I think I said earlier, they work on every level. It's a hell of a good story. You also encounter... But he is a very shrewd psychological observer. You encounter people feeling exactly the way you do about your own humiliations and triumphs. And there is... You understand and respond to so many people in these books that you actually do begin to feel, as all great literature does, that it's not a fictional exercise at all this - that this is a real place in the world that you can visit and find comfort and entertainment and indeed amusement there. He's very funny.

ELIZABETH FARNSWORTH: Who would you compare him to? What other author has created a whole world and this many books?

RICHARD SNOW: These are 20 books. And they are really distant. I mean, we really are setting them in the arcane world of the 19th century navy. I can't think of another author who has done something like this. And I can also not think of - I can't think of anybody else who has begun to have a success like this starting in basically his 80's. As of today, Norton has sold just in America over three million of these books.

ELIZABETH FARNSWORTH: Well, Richard Snow, thank you very much for being with us.

RICHARD SNOW: Well thank you.

JIM LEHRER: And now, remembering Admiral Elmo Zumwalt, who died last week at age 79. His funeral was today at the Naval Academy in Annapolis. 11 years ago, Zumwalt's son, also named Elmo, died of cancer, which was presumed to be the result of his Naval service in Vietnam. Here is an excerpt of a profile about the admiral and his son which the NewsHour broadcast in 1984. The correspondent is Charlayne Hunter-Gault.

CHARLAYNE HUNTER-GAULT: Admiral Zumwalt was one of the more controversial men to ever run the Navy, forcing the Navy to liberalize many of its strict regulations during his tenure as Chief of Naval Operations from 1970 to 1974. In 1962 he wrote a report urging the United States not to get involved militarily in Vietnam, but by 1968 he was commander of the Naval forces there, and committed to winning the war. A year later, his son Elmo volunteered for riverboat duty there.

ADMIRAL ELMO ZUMWALT: I had the power to prevent his coming to Vietnam, and was asked whether or not I would permit him to do so. I couldn't have been the father my son wanted me to be had I not let him go there.

ELMO ZUMWALT: Running river boats was a very dangerous situation. (Gunfire)

SPOKESMAN: Turn force 180!

ELMO ZUMWALT: There was a tremendous amount of responsibility in running an operation like that in a combat environment, and, you know, it was a test, and it was a test that I wanted to take. The helicopter pilots were used to be required to ride the boats so they could get a feel for what we went through, so they could react as quickly as possible when we called them in. And I'll never forget a helicopter pilot saying, you know, "we're the hunters up there in the air, but it's obvious that you all are the hunted down here." That is a precarious place to be.

CHARLAYNE HUNTER-GAULT: To protect his sailors, Admiral Zumwalt ordered stepping up the three-year-old campaign of agent orange spraying, especially in the Camau Peninsula area, an area where his son was patrolling.

ADMIRAL ELMO ZUMWALT: You must remember that we were watching the defoliation take place at a time when, in my case, for example, my sailors were taking casualties at the rate of 6% per month. So that on the average, my sailors and officers had about three-quarters of a... about a 75% probability of being a casualty during their year there. Anything that could be done to reduce the fearsome casualties that we were taking was an intelligent thing to do.

ELMO ZUMWALT: The areas around us were heavily defoliated, so defoliated that they looked like burned-out areas, many of them. You know, almost every day that you were in riverboat patrol, you were having... You were being subjected to the agent orange factor.

ADMIRAL ELMO ZUMWALT: It is the case that the particular area in Vietnam in which my son's boat operated a great deal of the time was an area that was sprayed upon my recommendation, and in that sense it's particularly ironic that in a sense, if the causal relationship can be established, I have become an instrument of my son's own tragedy.

CHARLAYNE HUNTER-GAULT: The admiral is convinced that he made the right decision, that spraying agent orange may have saved his son's life in Vietnam, as well as the lives of thousands of others, but what concerns him most is the futility of the sacrifice he sees his son and other veterans making.

ADMIRAL ELMO ZUMWALT: My son's illness has caused me to recall even more vividly the tragedies that flowed from the tragic war in Vietnam. If one knew then what we know now-- namely, that the United States would make a decision here to losethat war-- I would far have preferred that we never had gotten involved in the war.

ELMO ZUMWALT: As far as being bitter about it, I, you know, I intellectually made those decisions. I'm the one that decided to volunteer to go into the river boats, I'm the one that volunteered to run those risks, and, you know, I was a creator of my own destiny, and I have a hard time understanding about being bitter because if I am, if I'm going to be bitter, I'm going to have to be bitter with myself that I made those decisions, and I can't say that I necessarily regret making those decisions.

JIM LEHRER: Two years after that interview, the Zumwalts wrote a book together called "My Father, My Son." The younger Zumwalt died in 1988 at the age of 42. At the admiral's funeral today, President Clinton recalled that Zumwalt lived with the consequences of life's greatest loss. He saluted Zumwalt as the sailor who never stopped serving his country, never stopped fighting for the men and women in uniform, and never stopped being the conscience of the Navy.

RECAP

JIM LEHRER: Again, the major stories of this Monday: America Online and Time Warner announced they're merging in a deal worth $166 billion. It's the largest corporate merger in history. The latest round of Israeli-Syrian peace talks ended after a week. They'll resume January 19. And a Miami judge said a six- year-old Cuban boy must not be returned to his father in Cuba now, pending a full hearing in March. We'll see you online and again here tomorrow evening. I'm Jim Lehrer. Thank you, and good night.