(2 of 3)
But Time Warner Cable didn't see that because the culture of Time Warner Inc., unlike that of Disney, is highly decentralized, giving the cable unit independence to focus almost solely on its bottom line. The cable guys are equal opportunity offenders, even inside Time Warner. No less a figure than vice chairman Ted Turner, the company's largest individual stockholder, has repeatedly complained about the cable division's unwillingness to carry Time Warner's own programming. Financial news network CNNfn is available in barely 60% of Time Warner homes. Sports network CNNSI is in far fewer, even while Disney-owned rival ESPN is ubiquitous.
Hence, when the first night of the ABC blackout separated viewers from Regis, TW was cooked. Worse still, the words that the company emblazoned on the blank screen that normally would have been carrying ABC programming was a piece of Orwellian newspeak that suggested precisely the opposite of what it said: "Disney Has Taken ABC Away from You."
Another literary source could have been the Warner Bros. film library. Time Warner officials were outraged that Disney had tried to wring commercial advantage out of the big merger, using the FTC and FCC examination of the deal as air cover for an opportunity to enhance Disney's bottom line. They sounded like Claude Rains in Casablanca, who would have been "Shocked! Shocked!" that one communications conglomerate would dare to profit at the expense of another.
When Time Warner capitulated last Tuesday, offering an olive branch that brought an extension of the current Disney contract through July 15, a grateful viewership could finally reconnect with Regis. But there had taken place a not so subtle shifting in the ground beneath the cable business and in attitudes toward the Time Warner-AOL merger.
Back in January, the New York Times had editorialized that "there is little economic reason to fear the merger" as long as the parties kept their systems open. Last Friday, the paper saw fresh reason for concern: by "overriding the information and entertainment needs of millions of customers," the Times said, "Time Warner virtually compelled federal regulators to take a more searching look" at the merger.
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.