FCC seeks more details about AOL Time Warner
The Federal Communications Commission requests a third round of information about the proposed merger of the two companies.
The filing yesterday marks the latest move by the FCC to question various issues and
interests surrounding the complex merger between the media titan and giant Internet service provider. The FCC, as well as the Federal Trade Commission and the European Union, must approve the merger for it to be completed.
Unlike the FTC, the FCC provides a public forum for its merger review. Last month, for example, it held a public hearing in Washington, D.C., where executives from AOL and Time Warner testified before commissioners about the benefits of the merger. The hearing also opened a forum for debate among company executives, representatives from competitors and consumer advocacy groups.
"This request is a normal part of the process," said Kathy MacKiernan, a spokeswoman for Dulles, Va.-based AOL. "We are pleased with how the regulatory review of our merger is proceeding, and we are on track to close in the fall."
A representative for New York-based Time Warner said the company concurred with AOL's statement.
Yesterday's filing presented a lengthy list of questions about the two companies' existing businesses. The questions addressed AOL's interactive TV plans, Time Warner's arrangement with cable ISP Road Runner, AOL Time Warner's plans for instant messaging, and AOL's interests in digital subscriber line (DSL) services.
Other questions included an extensive breakdown of the relationship between AOL, Time Warner and AT&T.
The filing's questions about interactive television focused on AOL's inclusion of programming from outside partners. Several questions referred to AOL Time Warner's interests in TiVo and Replay, two companies that let people record TV programs digitally and skip commercials.
Interactive TV has been a contentious issue between AOL and its rivals. Walt Disney has criticized the AOL-Time Warner merger, saying the proposed deal should be approved under the condition of government regulation to prevent abuse of power. Disney says AOL Time Warner would treat competitors unfairly in its ownership of content and high-speed Internet pipes.
The FCC filing also raised numerous questions about AOL's and Time Warner's assurances of open access to the combined company's cable network. The commission asked for more information about Time Warner's exclusivity arrangement with Herndon, Va.-based Road Runner and for the details behind its decision to open its network to outside ISPs.
AOL and Time Warner have until Aug. 28 to file a response.
In a separate filing with the Securities and Exchange Commission, Time Warner said it is evaluating alternatives for ownership of closely held Road Runner. The media giant added that it could record a $200 million to $300 million charge for such restructuring, according to Bloomberg News.
Bloomberg News contributed to this report.