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FTC delays vote on AOL-Time Warner merger

A Federal Trade Commission official confirms the Nov. 30 vote on the megamerger has been postponed to more closely examine the companies' deal with rival Net service provider EarthLink.

An FTC official confirmed Tuesday that the Nov. 30 vote on the America Online-Time Warner merger has been postponed to more closely examine the companies' deal last week with rival Internet service provider EarthLink.

The source said that the delay should be about one to two weeks. Earlier in November, the Federal Trade Commission voted to extend its ruling deadline to the end of the month.

The delay brings another impasse in the approval of the merger of the giant Internet company with the media and entertainment company. The commission has taken the lead in reviewing the proposed merger but has delayed its decision to force AOL and Time Warner to open cable lines to competing ISPs.

The FTC wants the companies to live up to their promise that the merged company will open its cable network to rival Internet access services.

Last week, Time Warner signed a deal with EarthLink to share its high-speed cable network. Although details of the agreement remain unclear, EarthLink executives said Time Warner offered more amenable terms than initially presented.

AOL and Time Warner have inked a similar deal with Juno Online Services, a free ISP.

The FTC wants to take its time reviewing the EarthLink deal, the source said. Although that delay--which came amid speculation that the FTC was prepared to nix the deal--could bode well for the merging parties, the FTC official made it clear that the commissioners have not reached any conclusions.

You've got Time Warner Representatives contacted at Time Warner and AOL declined to comment on the vote delay. An FTC representative also declined to comment.

No decision has been made by the FTC on whether to approve the merger, and no communication has been made with AOL or Time Warner suggesting that approval is imminent, the source said.

Even if AOL and Time Warner clear the FTC, they will face a review by the Federal Communications Commission, which postponed its vote earlier this fall to let the FTC make a decision first. The FCC has a broader standard than the antitrust one applied by the FTC; it judges whether a merger is in the public interest.

FCC officials have expressed interest in several issues, including access to Time Warner's broadband plant and AOL's domination in the instant messaging market.