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What theyre arguing about - Broadcasting & Cable

What theyre arguing about

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The brawl between Disney and Time Warner Cable is about money, carriage and the AOL, Time Warner merger.

On the money issue, the two sides are $300 million apart, according to Time Warner Cable programming head Fred Dressler.

Dressler says Time Warner accepted a deal in December that had all terms nailed down except for several issues concerning the content of Soap Net, Disney's new soap opera channel.

In exchange, Time Warner would pay in excess of $1 billion over 10 years and receive the right to retransmit the signals of the ABC Television Stations. But after the Time Warner merger with AOL was announced, ABC pulled the deal off the table.

Dressler says Disney came back with a demand for an additional $300 million, including an almost doubling of the price for The Disney Channel, to 71 cents per subscriber per month. Disney also demanded "open access" for its TV signals-meaning they be delivered in the same manner to subscribers in the AOL-Time Warner universe as Time Warner TV signals.

Disney is worried about broadband and Internet iterations. In a Feb. 18 letter to Time Warner, Disney's Anne Sweeney said Disney had concerns about "page placement,'' "navigation'' and "return path functionality.''

Disney officials say the $300 million figure is inflated. And Dressler says Disney was willing to forgo open access for the added payment. "What they said was, just pay us the money and that will go away,'" he said.

But Preston Padden, head of Disney's Washington office, says Time Warner wants only to pass-through the primary video and audio portions of Disney's digital TV signals, not the digital multicasting and data channels ABC may develop.

"They want to block access to parts of the signal that viewers would normally receive with an antenna because they prefer the customers get such services directly from them," says Padden. "That limits public choice and that's a public policy concern."

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