AOL, Time Warner shrug off merger criticisms

By
13 October 2000 03:00 PM
Tags: aol, warner, tribal, merger, fcc

Responding to comments about their proposed merger, America Online and Time Warner shrug off allegations of monopolistic business practices and say that they have no intention of changing their stance on instant-messaging interoperability.

Indeed, AOL goes so far as to take credit for the explosive rise in popularity of IM on the Internet.

"Because of the free distribution of [AOL's] product and its generous licensing policies, IM services have rapidly grown in popularity and usage," the companies said in comments filed with the United States Federal Communications Commission on Thursday.

The FCC, along with the US Federal Trade Commission, is reviewing the proposed merger.

AOL, and New York-based Time Warner are responding in part to comments filed by Tribal Voice and iCAST, two rival IM providers that are seeking access to the 120 million users of AOL Instant Messenger and ICQ. AOL has consistently refused to allow users of outside clients to communicate with AIM or ICQ users, citing security and privacy issues.

In their comments to the FCC, AOL and Time Warner contend that AOL's battle with Tribal Voice and iCAST, among others, is a pre-existing dispute that should have no bearing on the proposed merger.

Sharp words from Tribal Voice
Tribal Voice and iCAST, both of which are units of CMGI, argue that if the merger is approved, AOL will be able to further tighten its grip on the IM market using Time Warner's various high-speed Internet properties to reach millions of new customers.

"Instant messaging will go as far as innovation can carry it," said Ross Bagully, CEO of Tribal Voice, in a statement. "If AOL does not open its doors to interoperability, it will be a very short trip."

Bagully has hinted previously that he would consider litigation against AOL if the issue isn't resolved soon.

The merging companies also dismissed any notion that their combined might could harm competitors or stifle the growth of the broadband Internet-access market.

"Claims that AOL Time Warner would have undue market power in any segment of the Internet arena simply cannot withstand reasoned analysis," the comments say. "Concerns framed in generalised terms about the 'fate of the Internet' are belied by the unprecedented growth, competition and diversity in Internet companies and content ... and that competition and diversity is only more intensifying [sic]."

Some competitors aren't satisfied with AOL and Time Warner's promises. In a separate filing with the FCC Thursday, Disney asked the commission to require the combined company to give competitors access to its high-speed cable lines.

Disney and others are concerned that they may not be able to deliver their content to customers if the only cable outlet in a certain locale is owned by AOL Time Warner.

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