FTC GIVES A-OK TO AOLTW

The unanimous 5-0 vote approves the biggest deal in U.S. history. Depending on whom you ask, AOL will pay between $109-180 billion for Time Warner's media and cable assets.

AOLTW will have 85,000 employees. According to the Washington Post, the company is expected to generate $40 billion worth of revenues in 2001, with Time Warner accounting for $30 billion.

The merger has faced challenges from competitors, with the FTC particularly concerned about how the company will run its cable and Internet operations. AOLTW has already made deals with rival Internet service providers EarthLink and Juno, giving the two entry to the AOLTW high-speed network. Apparently, that did the trick.

They're not very sexy, but the conditions of the merger that the FTC laid down are meant to ensure that the combined dominance of AOL in the ISP arena and Time Warner's growing power in the cable-broadband market won't crush other ISPs like the tiny little companies they are.

Mainly, the FTC is forcing AOLTW to make deals with outside ISPs, offering access to the coveted cable broadband. The company can't interfere with other ISPs' content, and it must also offer rivals the same quality of broadband connections as AOL's own service employs.

The conglom's deal with Earthlink is required to be the model for other open-access agreements with ISPs. In addition to the Earthlink pact, AOLTW is required to make deals with two other non-affiliated ISPs to provide cable broadband ISPs within 90 days of making AOL broadband available.

Shares of both companies rose on news of the FTC's action. Stock in AOL closed yesterday up $1.55 at $50; Time Warner was up $1.90 at $74.50.

The deal next faces Federal Communications Commission scrutiny, but those wimps will do whatever the FTC tells them to do.