N.C. ABC Station Talks Tough

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Bracing for the worst, ABC Inc.-owned WTVD in Durham, N.C.,
launched a public campaign last week to warn 400,000 Time Warner Cable subscribers that
the TV station may be pulled from cable April 1 due to the retransmission-consent war
between The Walt Disney Co. and the MSO.

The action by the station -- which serves the
Raleigh-Durham area in central North Carolina -- shows that Disney and its ABC unit are
not letting up in their dispute with Time Warner, even after a recent showdown in Houston.

Disney and the MSO have been in bitter talks regarding ABC
stations in seven markets -- including Raleigh, Houston, New York and Los Angeles -- with
3.5 million subscribers. Disney and ABC have given Time Warner an extension until the end
of March 31 to continue carrying the broadcast stations while they talk.

WTVD issued a press release last Thursday saying that the
TV station may be "dropped," adding, "Talks between ABC and Time Warner are
ongoing, but thus far, Time Warner has refused to agree to fair terms."

The release also stated that the TV station plans to run
print ads encouraging viewers to call Time Warner and write the president of the Raleigh
division, Randy Fraser -- and also to write City Council members -- to "ask them to
take a stand for equal treatment."

Time Warner wasn't happy with Disney's
"foolish" actions in Raleigh-Durham.

"They marched over to the local newspapers with that
press release," spokesman Mike Luftman said. "They just decided to start another
brushfire. Rather than trying to come up with an acceptable offer to us, they are waging a
public-relations war."

Earlier this month, Disney backed down on its threat to
pull KTRK-TV off Time Warner Cable in Houston effective March 10 so that
retransmission-consent negotiations could continue between both parties until the March 31
extension.

Last week, Disney sent executive vice president of
government relations Preston Padden to Houston to talk with city officials about the
retransmission-consent situation. "We're just bringing people there up to
date," ABC spokeswoman Julie Hoover said.

Disney wants Time Warner to carry its SoapNet and Toon
Disney networks, as well as to move Disney Channel to basic from a premium service. Time
Warner is balking, particularly at the license fee Disney wants from the MSO. In one of
Disney's most recent offers, it was asking for a 50-cent monthly license fee for
Disney Channel.

Disney officials have also said they are worried that Time
Warner is giving preferential treatment to networks owned by its parent, Time Warner Inc.,
such as Cartoon Network, and the MSO is not willing to pay Disney a fair-market rate for
its programming.

The MSO claimed that Disney has boosted the cost of the
deal it originally offered Time Warner by more than $300 million.

In a prepared statement, WTVD general manager Bruce Gordon
said, "We want Time Warner to guarantee that programming from WTVD and ABC will get
the same treatment as programming Time Warner owns and carries on its cable systems. This
is the crux of the issue … It is vital for us -- and people throughout the heart of
Carolina -- that independent content suppliers have access on fair terms to the Time
Warner distribution platform."

The TV station also stated in its release that
"virtually every cable system in the country" has moved Disney Channel to basic,
and that 60 million of its 61 million subscribers are basic.

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