Disney Reaches Out To Phone Industry

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The Walt Disney Co. plans to work more closely with the local phone industry on shaping the federal government's broadband policies.

Preston Padden, Disney's executive vice president of worldwide government relations, staked a potential deal in which Disney would agree to support deregulation of digital subscriber line service in exchange for phone-industry backing for federal rules that protect Internet piracy of Disney's filmed entertainment.

"We look forward to working, to a much greater extent in the future, on how we can both encourage the deployment of broadband and make sure that our investments and your investments have the ability to make a market return," Padden told attendees at the United States Telecommunications Association convention here last Tuesday.

The local phone industry contends that the Federal Communications Commission requires them to lease network elements to competitors at below cost rates. Phone-industry officials claim agency policies have directly contributed to the telecom meltdown.

In his remarks, Padden suggested that the economic consequences of the FCC's phone-competition rules were the same as those Disney's faces when its products are stolen on the Internet. He noted that through compulsory licensing, the federal government also hurts Disney by requiring it to distribute its owned-and-operated ABC television stations to pay TV operators for regulated rates.

Disney's cooperation with the phone industry would come after some phone companies (which he did not name) stop encouraging support for compulsory licensing, Padden indicated.

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