Last week’s deal which enables ISP Earthlink Inc. to offer high-speed Internet access services via Time Warner Inc.’s cable network has caused the Federal Trade Commission (FTC) to delay a vote on whether to block Time Warner’s merger with AOL Inc., according to a report in Tuesday’s Wall Street Journal.
The issue of how Time Warner would open its network to rival ISPs – a commitment it made at the time the merger with AOL was announced – has been central to the FTC officials’ deliberations on whether the deal would harm competition. According to the Journal, the Earthlink deal has encouraged officials that they might reach agreement with the companies on a formula that would not damage competition.
A vote on the deal had been scheduled for Thursday. While a deal that would allow a major ISP to offer services before AOL was an FTC precondition for approving the merger, it does not guarantee approval, according to the paper, and the companies could be asked for further concessions. Continued access to New York-based Time Warner’s content services by AOL’s rivals is said to be a continuing bone of contention.
The Journal reported that the Earthlink deal forms part of a draft settlement being hammered out with the FTC through which, among other things, AOL would delay offering services over Time Warner’s lines until at least one competitor was also in a position to do so. Time Warner would also be required to sign contracts with two additional rivals within 90 days.
