A Looney Tunes Cable Clash

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The ABC misadventure isn't likely to derail the AOL deal. As former FCC chairman Reed Hundt puts it, "Those people who might [have been led to] think AOL-Time Warner is a big, scary company already know how big and scary it is." But there was a big rush on satellite dishes in Houston last week, and a heightened sensitivity to the power of the cable companies. Officials in many cities have been looking toward Portland, Ore., which drew upon its power to approve a change in ownership of the city's cable systems to win concessions from AT&T; when it acquired the previous Portland cable operator in 1998. While the FCC has since taken Portland to court, and no one expects that an individual city council could really stop the AOL-Time Warner deal, local opposition might prove to be vexing.

Meanwhile, Time Warner and Disney will soon be back at the table. In New York City, TW has offered to make nice by giving all its cable customers a refund on two full days of basic service, plus a free month of a premium channel they weren't already receiving (the latter is a tactic that used to be called sales promotion). In Washington chief Disney lobbyist Preston Padden was serving up unctuousness by the ladle. After the FCC officially scolded Time Warner in midweek, Padden intoned, "We are incredibly grateful to the people at the FCC, who were placed under a completely unfair burden by this whole contrived crisis."

A more honest posture from Disney would have them saying, simply, "Gotcha!" Or, at worst, "We won." But even if they did, the award for most honorable statement would still go to Fred Dressler, the Time Warner Cable programming chief, who played a pivotal role in the botched negotiations. Asked what he thought his company had gained from the entire adventure, Dressler said, "One of the things we've learned is that whatever we do that affects the viewing habits of the American public is of greater importance than anyone had imagined."