In a 3-2 vote, split long party lines, the FCC lifted conditions that obliged AOL to interoperate with two other IM providers before it could offer so-called advanced IM-based high-speed services such as presence-aware videoconferencing.
The rules were imposed as part of the FCC’s approval of the AOL Time Warner merger in January 2001, in response to fears from consumer groups and rivals that the combination of AOL’s online services and Time Warner broadband could damage competition.
FCC chair Michael Powell who in 2001, as a lowly Commissioner on a Democratic-tilted panel, had strongly opposed and dissented from the AIHS conditions in 2001, took the opportunity this week to show his views as being vindicated.
The fact that AOL Time Warner’s market share is decreasing in a growing market, combined with the fact that two non-trivial competitors – Microsoft and Yahoo – have established stable and growing market shares, directly contravenes the theory that the market is tipping toward AOL, he said in a statement.
AOL, in its petition to have the AIHS conditions dropped filed with the FCC in April, cited comScore Networks metrics and said its market share had dropped from 100% in 1999 to 61.5% at the time of the merger and about 58.5% in February 2003.
Dissenting this time, Commissioners Michael Copps and Jonathan Adelstein pointed out that 59% or thereabouts is still dominant and that AOL still has more instant messaging users than all its competitors combined.
Today, as in 2001, AOL Time Warner is the market leader in IM services… any removal of the condition is premature and unwarranted, the dissenting commissioners said in a joint statement.
Copps and Adelstein point out that AOL has only recently started to heavily promote its broadband services. They also express concern about how the FCC’s ruling will affect the potential for interoperable IM, as well as cross-network IM services, such as those offered by Trillian Inc.
