CAN AOLTW BEAT THE DEADLINE?

But the Federal Trade Commission's recent demand that the companies sign a cable-access deal with a competing Internet service provider may open the door to further delays, The Wall Street Journal reports, as well as giving opponents of the deal additional time to object.

In order to give the companies more time to come up with an Internet-access deal, the FTC last week delayed a vote on the pending deal until Nov. 30. But it might be impossible for the FTC to vote on the merger by that deadline, since TW has to negotiate an access deal before the FTC can review it.

An article in Thursday's (11/16) Wall Street Journal reports that the delay is shedding light on the differences in strategy on dealing with the regulators between AOL and TW. According to sources, Time Warner wanted to force the commission to vote last week, but AOL didn't want to risk the commission voting to block the deal. Although AOL Senior VP Ken Lerer said suggestions that there were strategic differences between the company were "flat out wrong."

Insiders worry that the extra time increases the possibility of the deal being blocked. One TW insider quoted by the Journal said that in the last week the chances had risen from "less than 5%" to somewhere between 20% and 30%.

But AOL's Lerer remained confident about completing the deal and said that the three-week delay didn't "change that confidence."

AOL and Time Warner first announced the deal on Jan. 10.

The key to completing the deal by the deadline is signing a deal with another ISP, however, and talks with EarthLink, the nation's number-two provider have reached an impasse. But a Reuters story posted Wednesday (11/15) stated that talks between AOL-TW and Juno, the nation's number-three ISP, had "picked up significantly" in the last couple weeks.

In July, Juno struck a deal with TW to have access to its cable lines, but the terms of the deal, including a date for the access, were not ironed out at the time. While Juno and AOL-TW were "getting closer," according to a Juno spokesman, the negotiations were not yet finished.

Some industry analysts have expected AOL-TW to attempt to strike deals with more than one national ISP, thus easing further regulatory concerns.

Spokesmen for AOL, TW and EarthLink declined to comment.