FCC Nearing Approval of AOL Merger
The Federal Communications Commission is expected to approve the pending $95-billion merger of America Online and Time Warner, perhaps as early as today, according to sources familiar with the agency’s review.
FCC commissioners spent Wednesday trying to reach a compromise that probably would impose only modest conditions on the merger, chiefly related to AOL’s Instant Messenger service.
Once the FCC approves the deal, AOL and Time Warner are prepared to close their merger within hours.
AOL rivals, including Microsoft, Yahoo and Excite@Home, have lobbied the FCC for weeks to force the Dulles, Va.-based Internet company to make its Instant Messenger service compatible with their instant-messaging products. Instant messages allow Net users to exchange real-time messages while online.
AOL has blocked efforts by competing services to link with AOL Instant Messenger, saying it is concerned about protecting the privacy and security of AOL members. Critics say AOL is dragging its feet.
“AOL knows instant messaging is going to be a killer application, and they are just trying to hang on to their market dominance,” said Estela Mendoza, a spokeswoman for Excite@Home.
The five-member FCC, which had hoped to finalize its review by the end of 2000, has had difficulty forging a three-person majority.
Two commissioners, Michael Powell and Harold Furchgott-Roth, believe that the merger should be approved without conditions, said a person familiar with the review who spoke on condition of anonymity.
Commissioner Gloria Tristani is pushing for far-tougher conditions to force AOL to open up its instant-messaging service. She also has expressed interest in forcing AOL Time Warner to lease its cable wires to smaller Internet service providers.
FCC Chairman William Kennard and Commissioner Susan Ness favor only limited conditions on the merger, sources said.
None of the commissioners would comment Wednesday.
Shares of AOL rose 5% Wednesday, closing at $44.89, up $2.04. Time Warner stock rose 4%, or $2.60, to $67 a share. Both trade on the New York Stock Exchange.
