FTC members on opposite sides on AOL-Time Warner -sources
By David Lawsky
Thursday November 30, 12:27 pm Eastern Time
WASHINGTON, Nov 30 (Reuters) - Two members of the Federal Trade Commission are on opposite sides on whether America Online Inc.'s (NYSE:AOL - news) proposed purchase of Time Warner Inc.(NYSE:TWX - news) will hurt competition, persons close to the deal said on Thursday.
At issue is the agreement for EarthLink Network Inc. (NasdaqNM:ELNK - news) to use Time Warner's cable lines later next year to offer consumers an alternative Internet service to AOL's service across the high-speed pipeline, a deal that was widely seen as clearing a big hurdle to win FTC approval.
Commissioner Orson Swindle, a Republican appointee, believes the deal demonstrates AOL and Time Warner are willing to open cable systems to others and that therefore the deal should be permitted, these sources said.
Commissioner Mozelle Thompson, a Democrat appointee, believes the EarthLink deal is not enough to guarantee any competitive access by rivals and opposes the deal, the same people said.
Recently, the FTC staff has been trying to negotiate to ensure competition is preserved by demanding Time Warner's cable lines be opened up to two additional Internet competitors within 90 days of the deal winning final approval by the antitrust agency.
The views of the other three commissioners, Chairman Robert Pitofsky and Sheila Anthony, both Democrats, and Thomas Leary, a Republican, are not as well-articulated on these issues, the sources said.
Over a period of months, people involved on both sides of the situation have repeatedly predicted dates -- which have come and gone -- by which they expected a deal to be reached.
Another issue being hashed out by the commission is the question of the availability of Time Warner's huge library of magazine, music, television and movie content.
The commissioners have discussed twin concerns but no resolution has been reached yet, persons familiar with the situation said.
The questions concern whether a combined AOL-Time Warner -- worth $97.5 billion based on Wednesday's closing stock price -- would exclude or put rival content at a disadvantage on Time Warner's cable systems.
Additionally, the antitrust agency has pondered whether AOL-Time Warner would be reluctant to sell its content on an equal basis to rival Internet providers.
Either way, one person involved in the situation speculated the agency may not finish its work on the deal until after Dec 18, when the Electoral College meets to select the next U.S. president.
Others said on Wednesday they believed it would be only two weeks because the number of issues remaining has narrowed.
Shares of Dulles, Va.-based AOL were down $4.02 to $39.34 while shares of New York-based Time Warner were down $5.40 to $59 on the New York Stock Exchange. |
