AOL TIME WARNER HAS DEVELOPED IM INTEROPERABILITY PROTOCOL, IT TELLS FCC

AOL Time Warner has developed protocol permitting instant messaging (IM) that provides security and privacy levels company has long sought, it told FCC in filing late Mon. Filing is obligation under one of FCC’s conditions of its approval of AOL Time Warner merger, with company having to provide commission with IM status report every 180 days. Filing wasn’t available at our deadline but company source said it would detail progress AOL has made on protocol and its plans for external testing. FCC spokeswoman said agency vowed to “quickly” post filing to its Web site, and within few days issue public notice with comment cycle. FCC compromised in its Jan. order on AOL Time Warner, allowing existing IM services to not be interoperable, but stating that if company wished to provide advanced IM with video streaming it would have to become interoperable (CD Jan 16 p01).

Report informd FCC that AOL Time Warner has made “significant progress” on interoperability since it first made commitment to do so last July, company source told us. Source said that company has begun developing protocol to protect consumer privacy and security -- for example, blocking spam -- that it has begun testing internally. Report states that by late summer AOL Time Warner will test interoperability with that protocol externally with leading industry operator, but it doesn’t identify partner.

Company continues to insist that interoperability is far more difficult than its critics suggest. “No one’s ever made [interoperability] work,” AOL Time Warner CEO Barry Schuler told reporters Mon. after giving keynote at Cable and Telecom Assn. for Marketing (CTAM) Summit in San Francisco. “If it’s so easy to do, why hasn’t Microsoft done it? Why hasn’t Yahoo done it?” he asked, naming AOL’s 2 largest IM rivals. However, Microsoft contends it did accomplish interoperability when it wrote its messenger service to be interoperable with AOL Instant Messenger (AIM) last year, only to be blocked repeatedly by AOL.

“We've made a lot of progress” on interoperability, Schuler said, and company plans to test various interoperability plans by end of summer, consistent with what it said in report. However, critics suggest AOL has shown little or no interest in interoperability. Last fall before House Telecom Subcommittee, CEO for IM provider iCast, Margaret Heffernen, testified that over year period of AOL’s participation in Internet Engineering Task Force (IETF) initiative on IM interoperability, AOL sent only 8 of 3,777 e-mails exchanged by group. Heffernen’s iCast since has gone out of business as IM market has consolidated.

In its Jan. 11 order FCC declared that AOL Time Warner “may not offer an AIHS [advanced IM service] application that includes the transmission and reception, utilizing a names and presence directory (NPD) [i.e., a “buddy list"] over the Internet Protocol path of AOL Time Warner broadband facilities, of one-or two-way streaming video communication,” until company either demonstrated final interoperability standard or entered into written contracts with other companies for interoperability, neither of which is expected to be included in its report to FCC. However, that order was last under then-Chmn. William Kennard, and current Chmn. Powell at time wasn’t enthusiastic at Commission’s approach.

Order’s conclusion of harm by AOL’s IM dominance “is flawed and undermined by the known evidence,” Powell said at time in separate statement. He said his Democratic colleagues in bloc proceeded “based on [their] own sweeping technical conclusion that IM is an essential facility for nearly all future real time, interactive Internet communications -- a breathtaking prediction and conclusion by a regulatory agency.” Powell was particularly uncomfortable with regulation of “product that does not as yet exist” -- AIHS. He declared “I am most hesitant (indeed unwilling)” to go further on AIHS in inquiry or rulemaking, as unlike DSL or cable, “IM is a software application born purely of the mother Internet.”

However, Powell made it clear in interview with Communications Daily (CD May 23 p3) that FCC wouldn’t rely on any company’s word on IM: “I've talked to Bill Gates on IM. I've listened to Steve Case’s version of what will happen.” He said it was important for FCC to have top-flight engineers to develop independent conclusions. Meanwhile, FCC continued to apply pressure to AOL Time Warner on IM. FCC Chief Economist Gerald Faulhaber recently said that AOL’s claims that security and privacy concerns had held up interoperability gained “sympathetic ear” at FCC but company provided “zero evidence” to support that claim (CD April 26 p11).