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RealTime IT News

AOL, Time Warner Said to Make Last Ditch Effort

In a hurry to gain Federal Trade Commission approval, America Online, Inc., and Time Warner, Inc., made what they say is their final and best proposal, according to a report Friday in The Washington Post.

The offer, the terms of which are not known, comes days before the FTC's self-imposed Dec. 11 deadline. The board is expected to delay that announcement until Wednesday or Thursday, the Post source said.

FTC staffers have been preparing a legal case to block the two companies if the talks fail, a big incentive for AOL and Time Warner to make concessions if they want to see the deal close by the end of December, or even January.

While most Americans are worried about wrapping up presents in time for Christmas, America Online, Inc., has got to be getting worried about wrapping up its $92 billion acquisition of Time Warner, Inc. by the end of the year. Steve Case, AOL chief executive officer, has been making that prediction all year long, with nothing to show.

The Post quoted sources close to AOL who say the two companies are growing increasingly frustrated with the FTC, especially after what they consider groundbreaking concessions.

Last month, Time Warner signed an agreement with EarthLink, Inc., letting the nation's second-largest Internet service provider, behind AOL, provide competitive services over its cable network.

Time Warner officials hailed the agreement as proof positive that its cable Internet network was open, and got EarthLink, the loudest voice in the anti-merger camp, to cut back on its rhetoric.

Apparently, it wasn't positive enough for FTC officials, who have yet to make a decision on the merger.

Juno Online Services, Inc., the number three ISP in America, was also supposed to sign a deal with the cable giant earlier this year. But talks stalled soon after the announcement was made, resurfacing only after the FTC made its displeasure known.

Even worse for the merger hopefuls, commissioners want Time Warner to offer its content, including movies and music, on the same playing field as it will AOL, the source reported to The Post.

It is unlikely the two will concede this stipulation, and officials said Time Warner doesn't have a monopoly interest, under 20 percent, in the content category and thus is not an antitrust issue.

Time Warner and AOL officials were unavailable for comment.