AOL-TW OK'D BY FCC

The Federal Communications Commission unanimously approved America Online's acquisition of Time-Warner today, though they are demanding concessions for the new company to allow third parties access to its instant messaging technology.

What, you were expecting free Earthlink subscriptions?

Said FCC Chairman William Kennard: "Our conditioned approval of the AOL-Time Warner merger is significant, not only for the size of the merger, but also for its scope. AOL-Time Warner is a marriage of old media and new media, content and conduit, 20th century know-how and 21st century vision. In a phrase, it's 'Convergence Illustrated.'"

The FCC's restrictions also include regulating high-speed Internet services delivered over cable and examining Time-Warner's ownership link with AT&T.

FCC commissioner Michael Powell (son of Secretary-of-State-Designate and AOL board member Colin), who reportedly will take over for outgoing chief Kennard as Chairman, announced that two of the five commissioners dissented on the imposition of any concessions.

The deal will create a $107.9 billion company. Although the partners lost approximately 40% of their combined value during the stock market's plunge over the last year, it's still one of the biggest mergers of all time.

Powell announced the deal's "silver lining" included benefits in the area of media convergence, but that the combined market power of the new entity raised "competition concerns." The incoming FCC boss hoped to balance the "positives and potential harm" of the pairing while protecting the interests of consumers.

AOL closed at $47.23 in trading today, up $2.34, while Time Warner's final price was $71.19, a boost of $4.19.

A 10 am (ET) press conference will be held tomorrow to release further details.