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The AOLTW combination must also win approval from the FCC, which has said it will wait until the FTC's ruling before acting.

FTC GETTING CLOSER TO APPROVING AOL-TW DEAL

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Some progress is being made in talks between America Online and U.S. antitrust regulators on the company's bid to acquire Time Warner, and an agreement could be reached as soon as this week, according to published reports.

A source familiar with the talks told Reuters Monday (11/6) that the companies and the Federal Trade Commission staff must still resolve fundamental areas of disagreement. The source added that a deal was not guaranteed and the case could still go to court if the companies cannot iron out differences with the FTC.

The threat of going to court to block a deal, however, may bring about a settlement, which would allow the deal to move forward.

Sources said the two sides are trying to work out concerns that have threatened the deal since day one, including how to impose a requirement to allow competing Internet services access to TW's cable lines and thereby would provide consumers faster access to the Internet.

Any deal reached by FTC staffers must be submitted to the five-member FTC for approval.

Competitors have urged regulators to impose conditions on AOL and TW that mirror those governing the telephone industry, which require immediate and open access for competitors to their pipelines, the report said. Yet that model is impractical because of the FTC's position as an enforcer of antitrust laws, not a regulator that oversees companies like the Federal Communications Commission, the source said.

Because of this, negotiators are looking to the cable television model, which requires far less oversight. Typically, cable operators can demand a share of revenues from advertisers on their channel which, in this case, could be applied to the Internet service providers seeking carriage on the cable lines.

The AOLTW combination must also win approval from the FCC, which has said it will wait until the FTC's ruling before acting.

If the negotiations with the FTC break down and the case goes to court, it will be handled by Richard Parker, head of the FTC's bureau of competition, and Michael Antalics, one of his deputies, Reuters said, citing "a person familiar with the case."

It is possible Parker may leave the FTC early next year, but he would continue on the case anyway, the source said.

The European Union has already given its approval to the deal after the two companies agreed to sever most links with Bertelsmann.

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