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Special Event

Time Warner Holds News Conference on Disney Dispute

Aired May 2, 2000 - 2:37 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LOU WATERS, CNN ANCHOR: Time Warner has called to order a news conference at its headquarters in New York City to respond to the issue of why ABC-Disney is not on its cable system in seven states.

Let's listen.

(JOINED IN PROGRESS)

UNIDENTIFIED MALE: ... also seated off to my left are Fred Dressler (ph), who is our senior V.P. of programming and has been the lead person in the negotiations so far, as well as Mark Appelbaum (ph), who is our senior counsel. And so, if there are some specific questions that go to details that they are more intimately involved with they will answer your questions. So, without further ado, here's Joe Collins, Barry Rosenbloom (ph) also, the head of our New York City operation.

JOSEPH COLLINS, CHMN. & CEO, TIME WARNER CABLE: Thank you, Mike.

Good afternoon and welcome.

I am here today to announce a new proposal which we have sent today to ABC. In the letter which we sent to Robert Iger (ph) about an hour ago, Time Warner offered to reinstate for 10 years, or however long -- much longer than that, that they desire, the retransmission consent agreement that expired last Sunday night with no additional terms and no additional conditions. We think that this offer gives them the certainty that they've been saying that they need to have, and we think that on behalf of our customers they get the certainty of knowing that they are going to be able to get the programming reliably on a long-run basis.

However, if Disney for some reason decides that they want a different offer, and if they prefer to negotiate a new agreement, we've offered them to continue carrying ABC for a minimum of five and a half months, and this relieves our customers from uncertainty and provides an adequate amount of time for the two companies to work out whatever details are required. We didn't just invent this number or this date.

Another major cable operator, Comcast Corporation, has been granted that duration of retransmission consent and we think our customers deserve no less an amount of time. It's also a date that avoids the sweeps period, so that question doesn't come into account. We believe these offers are reasonable and they are reasonable options and we look forward to hearing speedily back from Disney so that we might be able to quickly restore ABC to our customers, which is really our objective in all of this.

So if we can get Disney to execute this agreement, then everybody can be watching ABC again and all of our systems again by dinnertime.

Now I'd like to answer any question that you might have with the assistance of my colleagues.

UNIDENTIFIED MALE: Would you please, when you have a question, identify yourself by name, and by news organization and we'll provide you with a microphone if you'd like.

QUESTION: Hi, Joe Flint, "Wall Street Journal."

Are a little worried that if this battle does drag longer that you could get politicians involved. Chuck Schumer put out a statement today, asking you guys to resolve this, and you know, if it goes on, do you run the risk of them poking into your business and your relationship with ABC?

COLLINS: We think that these are our viewers and their ABC's viewers, and we've thought all along that we ought to be able to reasonably get together and do whatever is required without any interference, or any third parties or government in order to keep providing ABC to our customers.

Although I will say, at some point, if we look at the retransmission consent rules, which is what this has really been about, I think that the government back when it passed the Cable Act was looking for a way to protect broadcasters, and it gave them the "must carry" rules, and the "must carry rules" are very protective. It allows the broadcaster to know absolutely that he 's going to carried on the system and he can dictate what channel he goes on, and so forth.

And in this particular case, their's a provision called retransmission consent, that allows the broadcaster to attempt to use the carriage of their signal as leverage to try and force the cable operator to do different things, and primarily, to pay more money and to help them get further money from the cable customers. And we think if you look at the history how this has been used over the last several years, all it's done is caused uncertainty to the customers. It hasn't been lucrative to any of the broadcaster. It's been very confusing. There were several incidents early this year that were further confusing to the customers and so forth. And we think that certainly it's worth having the government look into the appropriateness of the retransmission consent rules as they're currently being used.

QUESTION: (OFF-MIKE) Why do you think viewers and people across the country look at this as a dispute between two corporate giants, both of which are using them to achieve corporate goals? COLLINS: Well, we don't feel that we're using anybody to achieve corporate goals. I think as I just said in my statement, we want our customers to have ABC. We've never said anything different from that, and we think they should have ABC, and -- but we don't think ABC should be using the retransmission consent rules to try and extract things from our customers. We don't think that's right.

QUESTION: (OFF-MIKE) How is it different from the terms ABC agreed to before? How does it change (OFF-MIKE)?

COLLINS: Well they've said they didn't want to agree to that period of time because it was too long and they didn't think that was appropriate under the circumstances and so forth, so we looked around and we saw there was another major operator that they've been having a dispute with, in the form of Comcast, and they granted Comcast just fairly recently a six-month extension of retransmission consent.

Well, because -- it really takes a third of the time off of what we have been saying before that we needed to have, and we didn't want to do that arbitrarily, so we said let's do it relative to the same period of time that they'd granted another operator.

QUESTION: Will you restore the service in the interim while you have this discussion with them?

COLLINS: We do not have retransmission consent today, and we cannot restore them today until we get retransmission consent, which requires an agreement between us and them in order to have that consent.

QUESTION: ABC has offered you a 24-day extension on the deal. Would you accept that while negotiating, sir?

COLLINS: As we said at the time, we didn't think that that's appropriate, it doesn't serve our customers well, and so we've said here's a much better program, we think, that seems to meet your objections, that will allow ABC to get on the plants immediately. By the way, this is not about an agreement where we want them to pay us money, or that there's any other consideration changing hands. Just accept that we will continue to carry the signal on our system and sort of a peace mood while we attempt to negotiate other details of the agreement -- yes.

QUESTION: So the answer would be no then? Would you not accept that extension?

QUESTION: How does the 24-day extension (OFF-MIKE)...

COLLINS: Well first of all, the way the overall rules work and the way they go together, the minute that you know that there's within a certain horizon that you're not going to be able to carry a signal, or that there's a possibility that you can't carry the signal, you have to begin notifying your customers of this fact, and in fact, in our markets where this has been in dispute, we have been running, a crawl continuously since December that says that the ABC stations may no longer be available in your marker, so we're telling our customers over and over again look out, this signal might go off. ABC has actually been running commercials in other markets that say, go buy antennas, and go buy dishes and other kinds of things to assure yourselves of continually being able to get our signal. So we don't think any of that's doing any of our customers any good, they uncertain, they're spending money, they're doing things they shouldn't have to do in this particular circumstance.

Well, they are already a lot of different ways that people can get virtually all the signals that are carried on our cable systems. They can -- in fact, in the case of a broadcast television station with the strength typically of the ABC network affiliates, they're available off the air. In most places in New York, you can get them on your eye glasses, if you've got them tuned right. So it's not a signal that there's no other way they can get. As ABC has been reminding a lot of our customers for the last five months, there's now the possibility that you can get all of these signals, including the local broadcast channels, via DVS. And there are lots of local -- other providers in these markers, so we think that's already a situation where there's lots of availability for the signal, but it's especially true with a broadcast station, which has its own government-granted license of six megahertz into everybody's homes.

WATERS: Joseph Collins, chairman/CEO of Time Warner Cable, with a peace offering, which is simply stated, to keep ABC on our system until we work out the deal between us, the objective, he said, is to restore ABC to our customers, and hopefully, by dinnertime tonight, so he can watch the second night of the celebrity "Who Wants to Be a Millionaire?." Mr. Collins saying say a new proposal has been sent over to Disney president Robert Iger, offering the current retransmission consent rules for 10 years to carry ABC and the Disney channels with no additional terms or conditions; if that's not acceptable, to put ABC back on the Time Warner Cable system in those seven states for 5 1/2 months if ABC requires a new agreement.

CNN invited executives at Disney and ABC to join us live for their reaction to this Time Warner news conference you've just watched. Disney and ABC officials declined. They said they needed time to digest the statements by Time Warner, as do we all. We will continue following the story. Whether or not you'll have ABC by dinnertime tonight remains to be seen. We'll keep on top of it.

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