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Time Warner Plugs the Plug On Disney’s ABC TV Stations

By Harry Berkowitz
NEWSDAY -- NEW YORK

More than 1 million homes in New York City could not find out “Who Wants to Be a Millionaire” Monday as Time Warner threw ABC stations off several cable TV systems across the country over a contract dispute.

Many viewers not willing to substitute “Ally McBeal” on the Fox network for the ABC mini-series “Arabian Nights” scrambled to dig up over-the-air antennas and converter switches or dropped by satellite-TV-equipped neighborhood bars or homes of friends and relatives.

Monday, ABC asked the Federal Communications Commission for an emergency ruling to force Time Warner to restore transmission, citing a rule that a cable operator is not allowed to black out a network during a ratings sweeps period, which began Thursday.

Time Warner said it was reacting to a stalemate in negotiations for a new “retransmission agreement” and to ABC’s refusal to extend the Sunday night deadline for those talks by eight months rather than until May 24, when the sweeps period ends.

An FCC rule says a cable system cannot carry a network without such an agreement.

The FCC, after meeting with both sides, said it is conducting an expedited review and asked Time Warner to file a response to ABC’s request by Tuesday.

The cable operator pulled the plug at 12:01 a.m. in New York, Houston, Raleigh-Durham, N.C., and smaller systems in Los Angeles, Fresno, Philadelphia and Toledo, totaling 3.5 million subscribers.

Time Warner has 1.2 million customers in New York.

“Disney Has Taken ABC Away From You,” was the message on the screen broadcast to viewers who tuned in seeking “Oprah Winfrey” and other shows on the New York station WABC-TV.

The fight is partly over how much money Time Warner is willing to pay Walt Disney Co., which owns ABC, to let Time Warner carry Disney-controlled cable networks on its systems.

But it also involves demands by Disney that a soon-to-be merged AOL and Time Warner guarantee equal access on cable systems not only for cable channels but also for interactive, Internet-related, e-commerce, electronic programming guide and other enhanced TV services of the future.

The two sides hurled accusations at each other in language usually reserved for Washington politics or even street brawls, rather than the usually polite corridors of giant entertainment companies.

“Some deranged individual has deprived all of these people of ABC,” said Preston Padden, executive vice president for government relations at Disney. “These people are arrogant manipulators.”

Time Warner virtually claimed extortion.

“When the AOL merger was announced, they thought they could use that to extract more money from us, because they felt we would be so sensitive to any controversy that we would agree to virtually any deal to keep things quiet,” said Michael Luftman, a spokesman for Time Warner Cable, based in Stamford, Conn.

Luftman said Time Warner had reached deals with all other broadcast networks but declined to give details.

Both Time Warner and ABC claimed to be looking out for the consumer.