AOL Will Offer IM-Sharing Plan

WASHINGTON (06/15/2000) - America Online Inc. (AOL) will offer an architectural plan on Thursday that would allow instant-messaging systems from competing services to interconnect with AOL's proprietary service, as the online giant moves to head off criticism that has drawn the attention of antitrust regulators reviewing its merger with Time Warner (TWX) .

Competitors ranging from big players like Microsoft (MSFT) and AT&T (T) to smaller players like iCast and Tribal Voice have been hammering AOL for months for its refusal to allow people using other products to trade instant messages with its users. They charge that AOL is simply trying to keep a lock on the market and block competition.

AOL has argued that efforts by other companies to create unauthorized links to AOL products could jeopardize AOL users' privacy and security. The online giant has now pledged to work toward creating an industry-wide standard for interconnection.

The issue has taken on renewed urgency for AOL as rivals complaining of anticompetitive practices on AOL's part have gotten the attention of regulators at the Federal Trade Commission and the Federal Communications Commission who are reviewing the Time Warner deal.

The FTC has told AOL officials that as part of upcoming depositions, it plans to question the firm about instant messaging, along with other issues, such as the company's commitment to sharing high-speed cable Internet lines with other Internet service providers. Some of AOL's competitors have been asked to provide information about the messaging issue, according to sources involved in the case. An FTC spokesman declined to comment.

The FCC asked AOL for more detailed information about its instant-messaging policy in a June 9 letter. The letter also asked about AOL's relationship with Hughes Electronics (GMH) ' DirecTV unit and about the effect that the proposed merger would have on the rollout of Time Warner's broadband and local telephone services. An FCC spokeswoman declined to elaborate.

During the past year, AOL repeatedly has tinkered with its instant-messaging service in order to prevent users of rival services from sending messages to its customers, leading its competitors to take their complaints to the FCC and the FTC.

Hoping to defuse those complaints, AOL on Thursday will renew efforts by the Internet's leading standards-setting body, the Internet Engineering Task Force, to craft an industry-wide standard that allows different instant-messaging products to interconnect. The company would offer an "architectural plan" that if adopted by AOL and implemented into its new products, would allow messages to travel between services, AOL officials said.

The IETF effort has made little progress so far and was put on hold for several months by its organizers.

AOL has repeatedly cited the industry-wide approach as the only scenario in which it would allow interconnection with its AOL Instant Messenger product, which has 50 million users, or with its ICQ product, which has 65 million users. (Another 40 million accounts are registered to use instant messaging within AOL's proprietary online service.) "Long term, we're supportive of industry efforts to arrive at a standard," says an AOL spokeswoman. "But this whole arena, if not carefully opened up, could become a haven for hackers and spammers."

AOL's competitors accuse the company of dragging its feet. "There's been almost no progress" in the IETF effort, says Tribal Voice CEO Ross Bagully, who claims that AOL's security and privacy concerns could easily be addressed. "That isn't an excuse to block interoperability in the interim."

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