August 19, 2003, 8:29 AM — The U.S. Federal Communications Commission (FCC) is expected to lift a restriction that has kept America Online Inc. (AOL) from offering video entertainment over its instant messaging (IM) software, according to a report published Tuesday.
The Washington Post said in its online edition that the FCC is expected to announce the decision within the next 48 hours, marking a victory for AOL parent company AOL Time Warner Inc. (AOLTW), which has been lobbying against the ban.
The Post cited a source familiar with the decision this week.
However, AOLTW spokeswoman Tricia Primrose said Tuesday that the company had not heard anything official from the FCC yet.
"We think we made a compelling case and we hope to get a favorable decision," Primrose said.
The restriction was imposed as a condition of AOL's January 2001 purchase of Time Warner Inc. At that time, regulators feared that the combined strength of Time Warner's cable and film entertainment holdings and AOL's IM popularity would dominate the market.
However, since that time AOL Instant Messenger's (AIM) strength in the market has lessened and competitors like Yahoo Inc. have moved to shore up their IM offerings and add streamed video services.
AOLTW asked the FCC to lift the restriction, arguing that the agency's concerns that it would dominate the market are no longer relevant.
In a petition filed with the FCC last April, the company said that "AOL Time Warner today is competing vigorously with others to find the right mix or content, applications and services that will appeal to consumers in a broadband world."