FCC In Loop On Time Warner, Disney Discussions

Commission 'being kept informed' about carriage negotiations between Disney and Time Warner as Sept. deadline approaches

By John Eggerton -- Broadcasting & Cable, 8/25/2010 6:35:45 PM

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 tough."

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.