IM-ING: How much freedom should AOLTW have to build out its proprietary platform?
Last week, AOL Time Warner submitted a petition to the FCC asking to be excused from the instant messaging interoperability requirements imposed by the Federal Communications Commission. According to Jim Hu’s ZDNet story, AOL asked the regulatory agency to remove a restriction forbidding America Online from offering video streaming through its popular instant messaging services. The FCC currently requires AOL to open its IM network to competitors if it launches “advanced” high-speed IM services as a condition to approving AOL’s January 2001 merger with Time Warner.
The petition argues that AOL’s IM services, AOL Instant Messenger and ICQ, face more competition from Microsoft and Yahoo, both of which have launched video conferencing features on their IM clients.
At the same time, University of Pennsylvania professors and former FCC officials submitted their petition to the FCC last week arguing that it was too soon for the FCC to lift the restrictions on AOL Time Warner, Inc.’s provision of advanced instant messaging (IM) services.
Gerald R. Faulhaber, who was the FCC’s chief economist when the restrictions were enacted, and David J. Farber, the Commission’s former chief technologist, wrote a brief– available here– suggesting FCC guidance would be required to ensure that AOL does not lock up the entire IM market through proprietary platforms and denying interoperability.
Quick quote: “By denying its customers interoperability, AOL TW is denying them access to more than 40% of the IM market. The only reason it might want to deny these benefits is if by doing so it denied even greater benefits to the customers of its competitors.”