AOL, Time Warner make final proposal to FTC

By Matthew Woollacott, InfoWorld |  Government

AMERICA ONLINE AND Time Warner have told the U.S. Federal Trade Commission (FTC) of the final concessions they are prepared to make in order to get approval for their planned merger, according to Thursday's Washington Post.

The report quotes sources familiar with the matter as saying that the companies have refused one condition put forward by the FTC: That rival ISPs should be offered access to Time Warner content on the same terms as AOL. Officials at the companies are said to feel that agreeing to this would negate one of the main reasons for the merger.

The controversy mirrors another stumbling block in the negotiations: the issue of whether the merger could harm competition by shutting out rival ISPs from Time Warner's network. AOL and Time Warner pledged at the time they announced their merger to offer open access to the network, but the formula for achieving this has since proved to be a sticking point.

To try and allay competition concerns, Time Warner in November announced a deal with EarthLink Inc. under which EarthLink will be able to offer its high-speed ISP services to around 20 million homes over Time Warner's cable network.

Although the FTC delayed a vote on the AOL-Time Warner merger to consider the implications of the EarthLink deal, some FTC officials are said to feel that it did not go far enough. Microsoft Corp. has since added its voice to the debate, arguing that greater openness should be guaranteed before approval is granted.

The Post reported that the FTC is planning to vote on the merger next Wednesday or Thursday. It said that even without the concession on open access to content, the deal still stands a chance of being approved.

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