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FCC In Loop On Time Warner, Disney Discussions

An FCC source says the commission is "being kept
informed" about carriage negotiations between Disney and Time Warner as
the clock ticks down to a Sept. 2 deadline.

It is certainly not unprecedented for the commission to
be monitoring retrans battles, but it would indicate there is clear
concern about the potential impact on consumers/viewers if the two sides
do not reach an accord. FCC Chairman Julius Genachowski
has said that he has concerns about "program interruptions" and
insuring a process that is fair to consumers as well as businesses. "I
agree that the market is the preferred method to determine
broadcast-cable arrangements," he told a National Association
of Broadcasters audience last April. "At the same time, these
commercial negotiations between broadcasters and multichannel video
providers affect third parties who aren't at the table."

For example, the FCC closely monitored the
end-of-the-year impasse between Sinclair and Mediacom, asking for daily
updates to the chairman's office and media bureau, according to a
Mediacom executive at the time.
That impasse, coming on the eve of college bowl games, also drew a lot of interest from Capitol Hill.

Time Warner was one of the lead companies on a petition
to the FCC to step in and "fix" the retransmission consent process,
including preventing TV stations from taking down their signals
during retrans impasses after their carriage contracts
expire but before deals have been struck.

Time Warner's contract to carry Disney cable nets and
owned TV stations expires Sept. 2, which Disney points out on a Website
about the talks

is just before the
beginning of the new TV season and the final season of Oprah, whose
syndicated talk show has wide carriage on ABC stations. In addition to
powerhouse ESPN, ABC stations in New York and L.A., the two biggest TV
markets, could be removed from Time Warner systems
if a deal is not done.

On its competing Web site about the negotiations, Time
Warner says it "expects to reach a new agreement," but also suggests
that it is standing on principle, advising surfers that cable
and broadcast programmers are demanding ever-higher fees
and suggesting Time Warner's option is to either "roll over or get

Disney counters that: "Time Warner Cable decides what to
charge its customers for monthly cable service and these rates are not
part of our contract negotiations. Programming costs do not drive the
rates charged by Time Warner Cable." Time Warner
and Disney have been fighting that battle over the impact of
programming costs at the FCC as well as part of the comment cycle on the
Time Warner et. al. petition for retrans fixes.