AOL Time Warner Petitions FCC for Relief From Instant Messaging Restriction

April 2, 2003. AOL Time Warner submitted a petition [58 pages in PDF] to the Federal Communications Commission (FCC) requesting relief from the FCC's January 22, 2001 Memorandum Opinion and Order (MOO) approving the merger of AOL and Time Warner, and imposing conditions upon AOL Time Warner regarding instant messaging services.

Specifically, AOL Time Warner seeks relief from the condition restricting its ability to offer internet users streaming video advanced Instant Messaging based high speed services (AIHS) via AOL Time Warner broadband facilities.

The FCC adopted this MOO on January 11, 2001, and released it at a later date. This proceeding is Cable Services Bureau Docket No. 00-30. The MOO is numbered FCC 01-12. The FCC has published the MOO in its electronic comment filing system (ECFS). It is published in six parts as PDF scans. Each part takes an extraordinarily long time to download. See, parts 1, 2, 3, 4, 5, and 6. It is also published at 16 FCC Rcd 6547.

The MOO provides that "AOL Time Warner may not offer an AIHS application that includes the transmission and reception, utilizing an NPD over the Internet Protocol path of AOL Time Warner broadband facilities, of one- or two-way streaming video communication using NPD (``Names and Presence Database创) protocols -- including live images or tape -- that are new features, functions, and enhancements beyond those offered in current offerings such as AIM 4.3 or ICQ 2000b, unless and until AOL Time Warner has successfully demonstrated it has complied with one of the following grounds for relief." (Parentheses in original.)

The MOO also provided three grounds from relief from this condition. One of these grounds -- the one now asserted by AOL Time Warner -- is changed circumstances. AOL Time Warner now argues that the assumptions and predictions made by the FCC in 2001 have proven to be incorrect.

AOL Time Warner states in its petition that the condition was based upon the assumptions that "AOL was the dominant provider of IM services and, absent interoperability, the ``strong 'network effects'创 associated with IM would cause AOL's unassailable lead in text-based IM to ``swell创 over time", and that "AOL's dominance in the text-based IM would afford the merged company an anti-competitive first-mover advantage in streaming video AIHS, creating barriers to entry and foreclosing competition".

AOL Time Warner further asserts that now, "AOL is not dominant in the provision of IM services today and there is no danger of ``network effects创 causing AOL's share to ``swell创", and that "As Microsoft and Yahoo! have each independently introduced streaming video AIHS, AOL does not have -- and cannot obtain -- a ``first mover创 advantage in this area".

Public comments are due by May 5, 2003. Reply comments are due by May 20, 2003.