IM Providers See Little Impact from FCC Rules

The instant messaging conditions imposed by federal regulators as part of their approval that created the newly formed AOL Time Warner Inc. will have little impact on efforts to improve IM interoperability, according to rival providers.

IM industry coalitions are striving to develop a standard that allows customers to communicate with one another, much like they do through e-mail, but many have complained that the former America Online Inc., which had been the dominant IM provider, had not cooperated fully in the effort. The Dulles, Va., company cited security and privacy concerns in defense of the pace of its own efforts, but rivals had been looking to the Federal Communications Commission to compel the company to ramp up its participation.

“The [FCCs] conditions fall short of what they could be and what they should be to benefit consumers today,” said Alex Diamandis, vice president of marketing at Odigo Inc., a New York IM provider serving 130 companies. “There are a number of ways [AOL] can delay the trigger of advanced IM services [to avoid interoperability requirements].”

The FCC embraces a hands-off approach to the Internet, but it views IM as part of advanced broadband services that it has been active in promoting. Concluding that the combination of AOLs IM service with Time Warners cable facilities will create a “first-mover” anti-competitive advantage in advanced IM services—which do not exist—the commission prohibited the company from offering videoconferencing or other streaming video over IM before accepting an interoperability protocol.

As part of the agencys blessing of the merger, the FCC established ways that AOL Time Warner can open cable-transmitted IM services to rivals.

Critics say the conditions may retard the development of advanced IM technology. Rather than working to interoperate with rivals, AOL Time Warner may instead evade advanced services that trigger the conditions. AOL officials have pledged to work with the Internet Engineering Task Force and industry players to develop a standard.

IM providers are now looking to other forces to push the service along. IMUnified, a coalition of AT&T Corp., Excite@home Corp., Microsoft Corp.s Microsoft Network, Odigo, Phone.com Inc., Prodigy Communications LP and Yahoo Inc., plans to implement “stage one” interoperability no later than March. Under this standard, the customers of all coalition members will be able to communicate via IM, but they must have an account with each provider. The account is free, but it does not provide the complete user-friendliness the coalition is striving for, Odigos Diamandis said.

The next step is implementing server-to-server interoperability, but the coalition does not have a time frame in place. Many say they hope AOL will play a role in the effort, and some look to technology as the ultimate spur.

“FCC aside, I believe that this industry is ripe for a landslide movement and that only a momentum-building movement is going to have any impact on either interoperability or AOL,” said Andre Durand, founder and general manager of Denver-based Jabber.com Inc., which provides software and services based on an open-source, Extensible Markup Language-based protocol. “Ive seen this before more than once. The big guys will act like the big guys as long as they can until market conditions change and they are compelled to think differently.” Other market changes, such as IM over wireless, may also compel broader interoperability.