AOL seeks to offer streaming video IM

America Online (AOL) may soon be able to launch advanced instant messaging (IM) services, such as streaming video, if U.S. regulators drop interoperability requirements imposed on the company as a condition of its 2001 merger with Time Warner.

In a statement released Friday, the U.S. Federal Communications Commission (FCC) said that AOL Time Warner Inc. (AOLTW) had applied for relief from the requirement that it make its IM service interoperable with other providers on the grounds that it no longer serves the public interest, convenience and necessity because there has been a material change in the circumstance.

At the time of the FCC’s approval of the AOLTW marriage, the agency found that the company would “likely dominate” new, IM-based services, especially advanced high-speed services, given Time Warner’s cable and content properties and AOL’s Internet strength.

However, AOLTW is arguing that those fears have not come to fruition as it continues to battle against competitors such as Yahoo and Microsoft.

“The passage of time has served to show that those who predicted that a combined AOL/Time Warner would somehow dominate the Internet has not come to pass,” the company wrote in its petition. “Rather, AOL Time Warner today is competing vigorously with others to find the right mix or content, applications and services that will appeal to consumers in a broadband world.”

The company’s petition, filed early last week, is now open for a 30-day public comment period, after which AOLTW will have 15 days to reply, the FCC said.

At the time of the AOLTW merger the FCC said that the company would not be able to offer advanced high-speed IM services unless it implemented a standard for server-to-server interoperability of names and presence database protocols, entered into contracts providing for the interoperability with other providers, or demonstrated the requirement no longer served the public interest because there was a material change in the circumstance.

However, AOLTW is arguing that since then both Yahoo and Microsoft have launched IM-based video streaming services yet “IM has remained largely what it was in January 2000: a popular communications tool.”

While the New York-based media conglomerate is downplaying the growing significance of the IM market, it has recently launched an enterprise IM service which stands much to gain from offering video capabilities, allowing it to compete with video-armed IM rivals and as well as Web conferencing providers.