Feds request more key info from TW, AOL

FCC wants to know

WASHINGTON — Federal regulators examining the proposed $124 billion merger of America Online and Time Warner have requested more information on several key issues to determine the effect of the combination on competition.

The Federal Communications Commission asked that AOL provide data about its instant messaging software and its ownership interest in Hughes Electronics Corp. while requesting Time Warner provide insight into plans to deploy high-speed Internet, local telephone and digital cable services.

“We anticipate that additional requests will be forthcoming,” To-Quyen Truong, associate chief of the FCC’s cable services bureau, said in a letter to lawyers for the world’s largest Internet services provider and the cable operator.

He requested in the letter, which was made available Monday, that the information be provided to the agency no later than June 30.

Normal procedure

“This is a normal part of the process, and we look forward to responding to the commission’s questions in an expeditious manner,” said Dulles, Va.-based AOL spokeswoman Kathy McKiernan.

Time Warner’s reaction was similar, with Edward Adler, a spokesman for the New York-based company, saying: “The letter is routine and we look forward to answering quickly and working with the commission.”

Specifically, the FCC asked AOL whether it is working with other Internet companies on drawing up standards to allow customers using various instant messaging programs to interact and, if not, what benefits that provides to AOL customers.

Instant messaging, a feature that allows users to use the Internet to chat back and forth instantly, is one of the most popular functions on AOL.

If various Internet companies are working together to establish standards, the FCC asked whether other instant message providers are required to sign licensing agreements that include payments to AOL for access to its customers and vice-versa.

Competitors to AOL’s instant messaging software include Microsoft’s Instant Messaging, Yahoo!’s Yahoo IM and CMGI’s Tribal Voice.

The request came just two days after 43 technology and instant messaging companies sent a letter to the FCC and the Federal Trade Commission, which is also reviewing the merger for antitrust purposes, complaining that AOL holds a virtual stranglehold on the IM market.

At the same time, the regulators demanded information about Time Warner’s past, present and future roll-out plans for digital cable, local telephone and high-speed Internet services, including how much it plans to invest and the number of homes and subscribers it now serves and plans to serve.

Additionally, the agency asked the two companies to outline stakes and voting rights they hold in any company providing telephone service, including local or long-distance and circuit-switched or packet-switched service.

Details on Hughes stock

The agency also requested specific details about AOL’s ownership interest of preference stock in Hughes Electronics, including the value, percentage and conversion rights.

That request comes as Microsoft announced an alliance with Hughes Electronics’ DirecTV Incand Thomson Multimedia to market a system that will integrate digital programming, Internet access, interactive television and digital video recording in one package.

Later this month, AOL is expected to unveil its own AOL TV service which will allow users to surf the Internet, chat and e-mail as they watch television.

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