FTC Set to Block AOL, Time Warner Merger

U.S. regulators, concerned about a monopoly that could control access to Internet content, are prepared to block the merger of America Online Inc. (AOL) and Time Warner Inc., The Washington Post reports. The newspaper reported in its Monday edition that Federal Trade Commission (FTC) attorneys want to ensure the post-merger giant will open access to its high-speed cable lines to competing content providers.

FTC officials are worried that in markets where Time Warner operates cable systems, consumers could be forced to accept exclusively AOL-Time Warner-controlled content in order to get high-speed Internet access, according to the report.

AOL maintains it is committed to open access, citing a recent deal giving Juno Online Services Inc. access to its cable lines, report in The Washington Post said.

Spokespersons at AOL's European headquarters, in London, did not immediately return phone calls asking for comment. A spokeswoman at Time Warner's European offices in Brussels referred reporters to the company's New York headquarters, closed Monday for the Labor Day holiday.

AOL and Time Warner announced plans in January for a stock-swap merger valued at US$350 billion. The combined company, to be called AOL Time Warner, will have revenues of about $40 billion and a global subscriber base of more than 100 million.

At an FTC hearing in late July, executives of the two companies assured regulators the merger would be good for consumers and would not harm competition. "We are confident that together AOL and Time Warner will build a company to help take the Internet to the next level, connecting, informing and entertaining people around the world as never before," AOL Chairman and Chief Executive Officer Steve Case said at the time.

The European Commission (EC) has also expressed doubts that the merger would be compatible with fostering open competition in the European Union. The EC sent a confidential statement of concern to the companies late last month, giving them two weeks to respond. The Commission's deadline for a ruling on the merger is late October.

AOL, in Dulles, Virginia, can be reached at +1-703-448-8700 or online at http://www.aol.com/.

Time Warner, in New York, is at +1-212-484-8000 or at http://www.timewarner.com/.

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