AOL is to flog set-top boxes so that couch potatoes can use the Net while watching TV.

The service will only be available in a few areas, including Phoenix, Sacramento and Baltimore to begin with, but the giant Internet/media company hopes AOLTV will be a hit with mass-market consumers.

The interactive TV will carry features including email, instant messaging and chat.

The package includes a Philips Electronics set-top box, and a wireless keyboard or universal remote control, and is being hailed - by the company at least - as a "major step forward in America Online's 'AOL Anywhere' strategy".

Existing AOL members can get the service for an additional $14.95 per month. All others can expect to pay $24.95 per month.

Critics of the service point to the unconvincing performance of Microsoft's WebTV service and believe AOL could suffer a similar response.

Elsewhere, the European Commission has confirmed it is to launch an inquiry into the proposed merger between AOL and Time Warner.

According to the FT, there are fears that AOL could become the "'gatekeeper' for online music distribution". ®

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