FCC lifts AOL IM restrictions

[Dave Farber <dave () farber net>]

> Date: Tue, 19 Aug 2003 12:21:09 -0700
> From: "Wong, Brian" <brianwong () dwt com>
> Subject: FCC lifts AOL IM restrictions
> To: "'Farber, Dave'" <dave () farber net>
>
>
> Dave, perhaps of interest.
>
> - Brian -
>
> FCC lifts AOL IM limits
>
> By 
> <mailto:declan.mccullagh () cnet com?subject=FEEDBACK:FCC%20lifts%20AOL%20IM%20limits>Declan 
> McCullagh and 
> <mailto:jimh () cnet com?subject=FEEDBACK:FCC%20lifts%20AOL%20IM%20limits>Jim Hu
> Staff Writer, CNET News.com
> August 19, 2003, 12:10 PM PT
>
> The Federal Communications Commission has agreed to lift restrictions that 
> have barred AOL Time Warner from offering advanced instant messaging 
> services including videoconferencing, according to a source familiar with 
> the decision.
>
> FCC commissioners voted in a nonpublic meeting to drop the restriction, 
> imposed by the commission when it approved the 
> <http://news.com.com/2100-1023-250781.html?tag=nl>merger between America 
> Online and Time Warner in January 2001.
>
> Reached at an industry conference in Aspen, Colo., Commissioner Kathleen 
> Abernathy declined to comment on the vote, saying only that a decision 
> will be released by the end of the week.
>
> AOL spokeswoman Tricia Primrose declined to comment until the FCC makes 
> the decision public.
>
> "We think that we made a compelling case to the FCC," Primrose said in an 
> e-mail. "We hope a decision will be out soon, and that we get a favorable 
> result."
>
> Relief from the ban would be a significant win for AOL Time Warner's 
> America Online division. The world's largest Internet service has argued 
> that the once-unshakable dominance of its AOL Instant Messenger program 
> has been challenged by the rapid rise in popularity of IM programs from 
> rivals such as Microsoft and Yahoo. Thus, AOL has claimed, the FCC's 
> original reasoning for the ban is outdated, leaving AOL at a disadvantage 
> against competitors.
>
> In January 2001, the FCC ruled that the combination of AOL and Time Warner 
> could pose problems for competitors trying to develop their own IM 
> products. Regulators and rivals were concerned that combining AOL's 
> leading Internet subscriber base with Time Warner's entertainment content 
> and regional cable monopoly would create an unfair advantage in the market.
>
> But the world AOL inhabits in 2003 is drastically different than the one 
> it dominated in 2001. Back then, IM services from Yahoo and MSN were still 
> in their infancy and dwarfed by AOL's seemingly insurmountable 
> market-share lead. Rival IM services also lobbied the FCC aggressively to 
> force AOL to open its servers and allow other IM products to interoperate 
> with its product.
>
> As it turned out, the lack of interoperability helped Microsoft and Yahoo 
> make gains in market share faster. A spike in the popularity of instant 
> messaging forced people to run multiple IM clients on their PCs 
> simultaneously, allowing AOL, MSN and Yahoo to equally prosper.
>
> <SNIP>
>
> The vote was first reported by The Washington Post.
>
> <http://news.com.com/2100-1032_3-5065650.html?tag=lh>http://news.com.com/2100-1032_3-5065650.html?tag=lh 

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