Just as the Federal Communications Commission decided to suspend consideration of the proposed merger of America Online Inc. and Time Warner Inc., the pair of powerhouse companies is poised to offer federal regulators a deal on open access to their cable networks by competitors.
AOL (www.aol.com) and Time Warner (www.timewarner.com) reportedly are moving forward with federal antitrust regulators on the controversy over allowing open access to their cable networks.
Sources say that a deal could be inked this week that would give rival ISPs access to the companies' combined networks. In exchange, their merger would be approved by the FCC (www.fcc.gov). Such a deal, however, still would have to be approved by the Federal Trade Commission (FTC, www.ftc.gov), as well.
So far, the FTC has said it doesn't want AOL to have an advantage in the high-speed Internet race. The FTC wants assurances that competitive ISPs will be charged for access to the AOL/Time Warner cable network on a non- discriminatory basis. As of Friday, two draft agreements had been issued but no firm deal is finalized yet.
If negotiations fail, the FTC plans to challenge the merger in federal court. If the deal goes through, there remains a separate cable open-access proceeding at the FCC that would affect all cable operators, not just AOL-Time Warner.
Despite the ongoing open access issue, Senate Judiciary antitrust subcommittee leaders Mike DeWine (R-Ohio) and Herb Kohl (D-Wis.) are angered over the FCC's decision to suspend a ruling on the proposed AOL-Time Warner merger.
In a letter Nov. 3 to FCC Chairman William E. Kennard, Sens. DeWine and Kohl called the commission's action "troubling." They also said that the agency's self-imposed time limits for considering merger-related license transfers is inadequate.
Therefore, the senators contend, the FCC's decision to "stop the clock" on its review of AOL's acquisition of Time Warner demonstrates that legislative limits are needed instead.
