FTC WANTS MORE FROM AOL, TW

The Wall Street Journal reported Tuesday (11/7) that the Federal Trade Commission demanded new concessions from America Online and Time Warner, as negotiators face a vote Thursday (11/9) on whether to approve a settlement or block the $122 billion merger.

A tentative settlement, being drafted by FTC antitrust staff and the companies, would require TW to open its high-speed cable lines to Internet competitors before AOL offers service over those same lines. Antitrust enforcers wanted to prevent AOL from getting a first-strike advantage in cities served by TW.

The five-member commission must approve any settlement, and some members are now insisting that the merger itself cannot be approved unless AOL and TW have negotiated terms with at least one of its rivals to provide Internet access service in competition with AOL, sources told the Journal.

The commission members are urging their colleagues to go to court to block the deal unless the companies agree to this concession, the sources said. The companies had been reluctant to agree to such a condition, because it could give competitors too much leverage in negotiating with TW.

If the FTC and the companies are still at odds following another round of talks here Wednesday (11/8), the companies are expected to ask that Thursday's vote be postponed. But some of those close to the talks said they thought it could be resolved in time.