Mickey Mouse 1, Time Warner 0

Talk about a high stakes game of poker. When Time Warner (TWX)
pulled the plug on ABC television earlier this week over stalled contract
negotiations, the cable giant might as well have hung out a welcome sign
begging for a rubber glove probe into its planned merger with America

The company couldn’t have picked a better time to bully up on ABC over the
network’s lunch money. Stuff like this goes over smashingly with FTC
regulators. Mickey Mouse held a royal flush when it pushed for Time Warner
to carry a collection of its programs on the company’s basic cable packages.

Time Warner balked and used wiseguy tactics to muscle Mickey into
submission. Only problem was, Disney (DIS)
took its case straight to the Beltway boys, and there’s nothing more that
politicians love than getting their names in the paper.

Perennial pit-bull Orrin Hatch laced up his gloves, bristling before a
media circus, “If [Time Warner] can shut down ABC News and ABC network
programming just because they don’t agree on something, it makes you wonder.”

When you start catching heat from the chairman of the Senate Judiciary
Committee, it’s time to throw in the towel. And Time Warner Chief Exec
Gerald Levin did just that. He scrambled to make the rounds publicizing the
surrender, promising not to do it again. Honest.

In a clever publicity stunt, ABC paraded out a stick and carrot to three of
its biggest markets hit by the blackout. Running newspaper ads in New York,
Los Angeles, and Houston, the network offered to pick up the first 1,000
subscribers’ tabs if they’d switch to satellite dishes.

And in the latest turn of events, the FCC ruled that Time Warner showed
blatant disregard for sweeps month when it decided to block transmission of
ABC’s signals. Under FCC rules, cable operators are required to carry TV
stations throughout the duration of the all-important sweeps.

To be fair, Disney shoulders equal blame here. The company easily abused
its opponent’s rock-and-a-hard-place predicament. Under the shameless Cable
Act of 1992, Disney has run rampant with veritable highway robbery fees
that it commands from cable providers.

But nobody knows better than Time Warner, all’s fair in love and war. Will
the latest fallout threaten to jeopardize the marriage altogether? No. But
Time Warner will be walking on eggshells all the way down the aisle.

Any questions or comments, love letters or hate mail? As always, feel free
to forward them to [email protected].

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