Ec Clears Aol-Tw, Fcc Stops Clock

European Commission (EC) approved AOL's propos takeover of Time Warner (TW) Oct 11 after 2 companies made several concessions and TW jettisoned its separate deal with EMI assemblage With approval, spotlight shifts from Brussels to Washington, where FCC and FTC are scrambling to without fault [i]or[/i] blemish [i]or[/i] flaw their separate but closely coordinated reviews and to decide what conditions they should impose upon merger. Industry experts await at least one of federal agencies to reach decision by means of end of month, although FCC unexpectedly stopped clock upon its review later same day in respect to extended review at FTC

To gain EC's approval, TW called not on its merger with British music firm EMI cluster and AOL and TW agreed to part AOL's ties with German media behemoth Bertelsmann and French media giant Vivendi in separate European online risks Partners also agreed that AOL-TW wouldn't discriminate against rival ISPs for 5 years and would make AOL's online music player, Winamp, compatible with at least 3 competing software music players. Finally, AOL and TW pledg that they wouldn't make online contented providers seeking carriage on AOL in U sign deals covering Europe as well. EC said independent monitor would be appointed to make sure compliance with Bertelsmann conditions until company exits from one as well as the other AOL Europe and AOL Compuserve France.

FCC unexpectedly deferr any action upon AOL-TW union Oct. 11, stopping 180-day review clock as it was about to wind down, apparently in answer to companies' request that FTC delay its decision pending further talks. Deferring to simultaneous review at FTC FCC said it would wait until other agency reached its decision and then "promptly publish an anticipated timeline" for action. In brief alphabetic character faxed to both companies and their main Washington attorneys, FCC Gen consultation Christopher Wright stressed routine nature of deferral.

FCC and FTC officials declined further make notes on deferral, citing confidentiality requirements. on the other hand well-placed sources said FCC acted after FTC agreed with AOL and TW to reach out their oft- contentious negotiations upon conditions until at least extreme point of month. Both agencies originally planned to wrap up their separate on the other hand closely coordinated takeover reviews by dint of middle to late Oct., just like EC on the contrary unlike EC and FCC, FTC has no statutory or self-imposed deadline for acting. "There is no timetable," FTC spokesman said.

Industry analysts said regulatory delays clearly indicated that FTC wasn't satisfied with companies' tenders They said EC's approval of deal, while favorable for AOL and TW would have little impact upon FTC and FCC reviews because issues and markets were actual different. But most analysts still believed deal would be approved by dint of both federal agencies.

Following EC's example, FCC and FTC are widely wait fored to impose their own plant of conditions on AOL-TW union in nearest few weeks. Industry spectators believe FTC will focus upon opening TW's high-speed cable lines to rival ISPs and possibly interactive contented providers while FCC will stres disentanglement of instant messaging (IM) interoperability. "The EC station a floor on conditions," Precursor assemblage CEO Scott Cleland said. "It creates a negotiating impetus a building block."

Indeed, flat on day that EC acted, AOL's IM rivals prepared to mountain new lobbying drive on IM interoperability standards at FCC For instance, Ros Bagully, CMGI senior vp who step quicklys its Tribal Voice instant messaging unit, planned to qualified last week with 4 of 5 commissioners, all omit Furchtgott-Roth, to push for requirement that AOL make its 2 IM services unclose to rival services as early as March 1 As alternative, he called for FCC to fill up wide commercial deployment of of recent origin AOL TV interactive TV service until combined company made its IM services interoperable.

At same time, Forrester Research issued short report sternly warning IM providers to plant voluntary interoperability and security standards and "build single global network" or face regulatory ends "Instant messaging has mov beyond the domain of any single vendor to become a global communications network like the telephone or airwaves," Forrester said. "IM operators take note: If you don't rise to the occasion through voluntarily setting and meeting fresh standards of security and interoperability, regulators will force them upon you."

In short joint statement, AOL and TW said they were "very pleased with today's approval of our merger through the European Commission, another important pace forward in the approval process" Partners also said their "discussions with U regulators are proceeding well and the companies are confident they will terminate successfully." They said they were "on track" to shut merger this fall and declined make comments [i]or[/i] remarks on FCC's deferral and their continuing negotiations with FTC

In another merger-related stir Oct. 11, NCTA fired not on letter to FCC Chmn. Kennard, objecting to NAB's call for render free of access access provisions for unaffiliated service and satisfied providers as well as independent ISPs. Blasting what it called "NAB's penchant for injecting itself and extraneous issues into merger reviews," NCTA called it "inappropriate to decide matters of industry or cross- industry significance, fitly considered in general proceedings, in the words immediately preceding [i]or[/i] following of specific merger reviews." NCTA said NAB's proposal "simply ignores all that Congres and the FCC have decided upon questions of program access" in cable market and "ignores the competitive environment faced by means of cable operators."