Companies Lobby FCC for Instant Messaging Concessions in AOL-TWX Merger

Strategic Insights -

The Federal Communications Commission (FCC) is facing last-minute pitches from companies competing with America Online (AOL) in the instant messaging market segment, seeking concessions in AOL's pending merger with Time Warner. Leading the charge is Microsoft Chairman Bill Gates, who has made personal calls to FCC members to stress the importance of instant messaging compatibility between different services. The lobbyists, including ExciteAtHome, Microsoft, and AT&T, want AOL to make its instant messaging service work with their systems, allowing users to send real-time messages across different services.

Key Takeaways:

  • Microsoft Chairman Bill Gates is lobbying the FCC to require AOL to make its instant messaging service compatible with other systems, allowing users to send real-time messages across different services.
  • The lobbyists, including ExciteAtHome, Microsoft, and AT&T, want AOL to make its instant messaging service work with their systems, simulating the way users currently communicate via different email providers or phone networks.
  • FCC staff have already recommended an instant messaging condition to the five commissioners, but this suggestion would apply only to advanced instant messaging services offered over Time Warner's cable lines and require AOL to work only with Time Warner.
  • The proposed condition would heavily limit AOL's ability to compete in the instant messaging market segment if implemented as suggested.
  • Microsoft has made personal calls to FCC members to stress its point, demonstrating the company's strong interest in seeing the merger lead to instant messaging compatibility.
  • The AOL-TWX merger is valued at $111 billion, and the stakes are high for companies competing in the instant messaging market segment.

Statistics:

  • The AOL-TWX merger is valued at $111 billion.
  • 5 commissioners will make the final decision on the proposed instant messaging condition.
  • At least 3 major companies, including Microsoft, ExciteAtHome, and AT&T, are actively lobbying against the FCC's suggested narrow condition.

Sources:

  • Associated Press
  • Newsbytes.com