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Time Warner - Disney Dispute Might Cause Merger Problems
from the that-could-hurt dept
Now that the Time Warner/Disney dispute is temporarily solved (and those of you in the 11 effected cities can go back to watching "Who Wants to Be a Millionaire") people are suggesting that this display of power might threaten the Time Warner/AOL merger. While it doesn't necessarily have anything directly to do with the merger, it may upset some people who feel that Time Warner is flexing its monopoly powered muscles, even before the merger is complete.
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Disney are the bad guys here
I think Disney are the real bastards here. There's a 1992 law that gives broadcasters the right to charge cable companies to retransmit their signal (as if any broadcaster didn't *want* their signal seen far and wide). Disney has been pressuring Time/Warner to carry *other* Disney owned cable stations (which Time/Warner agreed to carry), but Disney wants a lot of money for these. If Time/Warner won't agree to pay, Disney won't allow them to carry ABC.
If Disney was *really* concerned about viewers seeing ABC, the 1992 law gives them (and only them) an option. They can invoke the "Must Carry" provision which would require Time/Warner to carry any broadcast station in the cable companies covered area. Of course, if a station invoke "Must Carry", they can no longer demand payment as well.
Fox and Cox Cable had a similar battle on New Years. Fox wanted Cox to carry some unrelated Cable networks and Cox didn't want to. Fox then withheld rebroadcast permission for Fox and Fox went dark for a few hundred thousand viewers for a week. In the end, the companies came to a secret agreement and Fox returned to Cox.
But face it, withholding rebroadcast consent is insane for "free" TV because your advertising rates are based on how many people can see it. But it gives the broadcasters the ability to leverage one product (free TV) to force the cable companies to carry another product (pay TV). *That* sounds like monopoly behavior to me.
And if this part of the 1992 law makes sense based on the notion of Property Rights, then the Must Carry provision contradicts it by saying that cable companies *don't* have property rights on their own wires. When the law was passed in 1992, my local cable company was forced to drop several channels (space concerns) because it was required to pick up a Home Shopping Channel that just happened to be broadcasting in the area as well as 3 PBS stations (one of which only broadcast from 8am-8pm).
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