The US Federal Communications Commission (FCC) has suspended its review of the AOL Time Warner merger, declaring it more productive to let its sister agency, the Federal Trade Commission (FTC), pass judgement on the issue.
However, by stating that it was "stopping the clock" on its proceedings, the FCC reserved the right to resume the process after the FTC has ruled. The announcement came the say day that the European Commission approved the $127bn union.
The FCC's move ups the stakes significantly: the FTC is understood to be more critical of the deal and more likely to impose stricter conditions than the FCC. By withdrawing from the field, the FCC, which is expected to clear the merger, avoids any chance of intergovernmental contradiction.
Chief amongst the FTC's concerns is the strength of new company's position in the broadband market and the potential for it to overwhelm smaller competitors, particularly internet service providers. The EC's approval was anticipated, given that Time Warner has no cable holdings in Europe; in the US, however, the company is connected to one in five of cable households.