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Sunday, 15 October, 2000, 16:41 GMT
US set to 'block' AOL-Time Warner deal
US regulators are set to block the merger of internet giant America Online and media group Time Warner, according to a US newspaper report.

The two sides have until 27 October to reach an agreement on internet access, a report in the Washington Post said, a deadline it says will be difficult to meet.

The Federal Trade Commission must decide by then whether or not to approve the merger.

So far, both sides have been unable to agree how the merged company would ensure that rival internet service providers would have access to its high-speed cable network.

European competition officials approved the deal last week.

New media giant

The merger will create a firm with a combined stockmarket value of $245bn.

AOL is the world's largest internet service provider and develops software through its Netscape subsidiary.

Time Warner's media empire spans television channels, feature film production, books and magazine publishing, and broadband cable networks.

The US regulators are worried about the combined group's links to telecoms and broadband provider AT&T.

There are worries that US consumers would end up with restrictions in their access to broadband internet services.

Making concessions

The European Commission consent comes with a number of conditions attached, one of which was that AOL Time Warner must cut all its links with music and publishing giant Bertelsmann of Germany.

Competition Commissioner Mario Monti said that cutting this connection would prevent AOL "from having access to Europe's leading source of music publishing rights, thereby eliminating the risk of dominance in the emerging markets for on-line delivery of music over the internet and software-based music players".

The biggest concession was the cancellation earlier this month of the planned merger of Warner Music and UK-based music group EMI.

That deal would have created one of the world's largest music groups and sharply reduced competition in the European market.

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See also:

11 Oct 00 | Business
EU statement: AOL, Time Warner
22 Sep 00 | Business
AOL/Time Warner concede to EU
06 Sep 00 | Business
AOL, Time Warner face Europe probe
05 Sep 00 | Business
US, EU threat to AOL deal
20 Jul 00 | Business
AOL's billion dollar profits
19 Jun 00 | Business
EU hurdle to AOL, Time Warner merger
11 Oct 00 | Business
EU clears AOL merger
17 Mar 00 | Business
Bertelsmann sells AOL stake
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