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TW, AT&T ties may fit

The FCC is not likely to insist that Time Warner sever ties with AT&T before merging with America Online, according to a draft leaked to the Washington Post last week.

The recommendations are in preliminary stages and are not yet complete, nor have they been presented to the five commissioners. A preliminary draft, however, is considered an accurate reflection of where the staff's final recommendations are heading.

Ties between Time Warner and AT&T are at issue, because critics of the deal worry that the two giant companies could operate in lockstep to dominate the broadband market. The FCC, however, according to the draft, believes that fear can be alleviated by requiring that a combined AOL Time Warner grant multiple Internet providers access to its high-speed Internet customers.

Ties between the two companies may still be cut anyway. AT&T, as a condition of its merger with MediaOne, will be forced to divest operations to get within cable-ownership limits. Its choices: cutting ties with cable programmer Liberty Media, divesting its stake in Time Warner Entertainment, or shedding other cable operations.

FCC officials, who have been trying to stem leaks of confidential internal documents, said the published report was "based on incomplete and speculative analysis."