AOL Gains After Merger Block Delayed

America Online, Inc. (NYSE: AOL) was up 25/64 at 44 23/64 early Tuesday following reports that the U.S. Federal Trade Commission (FTC) delayed for the second time a meeting at which commissioners were expected to block the company’s planned merger with Time Warner (NYSE: TWX).

According to press reports, negotiations thatwould allay regulators’ antitrust concerns are making progress. At the sametime, however, the FTC is reportedly moving forward with plans to sue toblock the deal.

On November 10th, the FTC decided to delay for up to three weeks a decision onthe planned merger because the companies promised to “offer new proposals toaddress competitive issues.”

Just ten days later, Time Warner said it reached an agreement with Internetservice provider EarthLink (Nasdaq:ELNK) covering high-speed Internet access.

Under the terms of the deal, Atlanta, Georgia-based EarthLink will make its high-speedInternet services available to about 20 million homes with access toTime Warner’s systems. The company said the alliance provides customers with a choice of high-speed ISPs, and marks thecable industry’s most far-reaching partnership with an unaffiliated ISP.

Glenn A. Britt, president of Time Warner Cable, called the alliance “a goodbusiness agreement” for both companies. “We believe it will serve as a modelfor future broadband agreements between ISPs and cable companies across thecountry,” he said, adding that the company is “in productive negotiations withadditional ISPs” about similar arrangements.

The EarthLink agreement, however, is contingent upon approval from FTC and the completion of the AOL-Time Warner merger.

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