The ultimate victor, if there is one, in the battle between Time Warner and Disney/ABC over cable access is yet to be declared. For the moment, though, the winner appears to be ABC, which, after being excluded from Time Warner's cable operations for more than 36 hours, was reinstated on Tuesday afternoon. Time Warner, under pressure from a Federal Communications Commission demanding fast answers and from angry viewers demanding the return of Regis Philbin et al., put ABC back on its TV-top boxes and agreed to keep negotiating at least until a July deadline. ABC gets to keep access to 3.5 million households during the important sweeps period, when local advertising rates are set; Time Warner executives, meanwhile, get to work on coming up with a strategy to deal with networks demanding ever-higher fees for their programming.
But that's not all, folks. Apart from the fees spat at the heart of the current dispute, both parties will need to tackle the constantly changing conditions in the cable TV market. The nation's cable operations — essentially government-sanctioned monopolies — are facing both negative and positive forces brought on by changes in technology. On the one hand, they are increasingly likely to lose their only-game-in-town status to satellite services. On the other, they stand to benefit from increasing use by Internet customers drawn to their high-speed connections. The latter is not a point lost on Disney, which apart from its TV and movie holdings has considerable aspirations to be an Internet player. During the dispute, Disney was quick to point out its concern that Time Warner's pending merger with Internet leader AOL has the potential to create a barrier to non-AOL Time Warner companies interested in participating in burgeoning Internet and interactive TV technology. So Disney, with an eye on the future, is said to want assurances from Time Warner (which, by the way, owns TIME.com) that no such favoritism is on the horizon. Time Warner, according to the New York Times, deems such a demand unacceptable, especially because it is unclear what direction the still-emerging interactive television technology will take. We have a suggestion: Regis could be asking if we want to e-mail a friend....