IM Coalition Wants More Action

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Redwood City, Calif. -- A coalition of companies argued that the Federal
Communications Commission's instant-messaging conditions on the America Online
Inc.-Time Warner Inc. merger aren't enough to undo AOL's 'stranglehold' on the

Many of companies involved in that group -- including AT&T Corp.,
Excite@Home Corp., Microsoft Corp., Odigo Inc. and Prodigy Communications Corp.
-- are founding members of IMUnified, a group that is pushing for the adoption
of an open, interoperable IM application. Another IM rival, MessageVine Inc., is
also a member of IMUnified.

As part of its approval of the merger, the FCC gave AOL Time Warner Inc. two
options: The company must open advanced versions to competitors; and it must
either incorporate an open standard so rival IM applications can talk with AOL
subscribers, or reach a deal with at least one unaffiliated company.

If AOL Time Warner selects the second option, it must ink two more deals
within 180 days. The company also has the right to ask the FCC to waive all of
the conditions if the company can prove that the market does not require

According to Allied Business Intelligence Inc. analyst Navin Sabharwal, AOL
Time Warner currently has about 140 million registered users for its two IM
properties: 'AOL Instant Messenger,' which is part of the company's subscription
ISP service; and ICQ, a program that can be used by AOL nonsubscribers to send
real-time messages to AOL customers who also use ICQ.

At the moment, there is no interoperability between AOL IM and ICQ, which
locks out other ISPs with IM capabilities, such as Microsoft and EarthLink
Network Inc., Sabharwal said.

IMUnified applauded the FCC's actions concerning IM but indicated that many
more steps must be taken to ensure that competition can take hold.

'Today's order is a step. It still will not provide any near-term benefits
for today's IM users,' the coalition said in a statement.

Long-term, industry observers expect IM to morph beyond text messages and to
encroach on the delivery of real-time voice and video messages. Those
enhancements could build new revenue streams for services like video
conferencing, Sabharwal said.