FTC meets but takes no action on AOL/Time Warner
By David Lawsky
WASHINGTON, Nov 29 (Reuters) - The Federal Trade Commission met in closed session
Wednesday for an update on America Online Inc.'s (NYSE:AOL - news) proposed purchase of
Time Warner Inc. (NYSE:TWX - news) but took no action, sources said.
The FTC held a wide-ranging discussion on the issues surrounding the mergers, sources said.
Others, who are familiar with the talks from the perspective of the companies, are optimistic that talks are nearing an end.
These sources say that issues have been narrowed and a deal will be struck within the next two weeks.
A spokesman for the FTC had no comment, nor did a spokeswoman for AOL at its headquarters in Dulles, Va.
Overall, the FTC is concerned about the preservation of competition for high speed Internet over Time Warner's lines.
AOL would use Time Warner's cable systems to deliver high speed Internet service. AOL would also feature entertainment
produced by Time Warner but the FTC has been insisting that AOL not launch that service until others are available.
As recently as last week AOL, took a first step to ameliorate some of the agency's concerns. Time Warner agreed to let
Internet service EarthLink Network Inc. (NasdaqNM:ELNK - news) use Time Warner's cable lines during the second half of
2001 for high speed Internet.
Now, the FTC is checking with competitors to see what they think of the deal. Some smaller Internet providers fear they will
be squeezed out of business.
The FTC staff has been negotiating to make sure that AOL preserves competition by opening up Time Warner's cable lines to
two additional Internet competitors within 90 days after the deal wins final approval by the antitrust agency.
There are many different points of view within the FTC on such negotiations. But, from at least one point of view, it is
difficult to see whether AOL can successfully and fairly meet that deadline.
In case talks do break down, the commission staff has sent letters to several companies and consumer groups from which it
has gathered information laying the groundwork for court action.
So far, dire predictions warning that the company would be sued if no deal were reached by a certain date and optimistic
predictions claiming that a deal would be reached by a certain date have both proved to be wrong. Instead, 10 months after
the deal was announced, the talks drag on. |
