Ops Object to DCIs Court Scheme

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Even if Ted Turner signs off on Discovery Communications
Inc.'s purchase of Courtroom Television Network, DCI's problems wouldn't be
over in regard to the trial channel.

Last week, cable operators were balking at any plan by DCI
to abandon Court TV's format and to use its precious analog shelf space -- 34 million
subscribers -- for one of its own networks, be it the soon-to-be-launched Discovery Health
or the recently acquired The Travel Channel.

A number of MSO officials said any such format change would
be in violation of their affiliation agreements with Court TV, and they would reclaim that
analog berth for their own use, to carry another programming service of their choice.

"If they buy Court TV and scrap it, in my view, the
channel is mine to do what I want with it," said Jedd Palmer, MediaOne's senior
vice president of programming. "There are a lot of strong channels out there [to put
on], such as Trio, Ovation, Romance [Classics] or [The] Independent Film Channel. Or we
could recapture that slot for digital."

As of late last week, the fate of Court TV -- which is
owned by Time Warner Inc., Liberty Media Group and NBC -- remained in limbo, but DCI was
still negotiating to buy a controlling stake for $350 million. At Time Warner's
annual shareholders' meeting in Atlanta last Thursday, CEO Gerald Levin said he and
vice chairman Turner agreed on plans for Court TV, although he didn't offer any other
specifics, according to published reports. Levin added that the Court TV partners are
still working on resolving the issues.

Levin's remarks were in response to reports that
Turner was opposed to Court TV's sale to DCI (while Levin favored it), fearing that
Discovery would use the legal network to compete against Cable News Network.

For more than a year now, Court TV's partners have
been squabbling about the trial network's future. Liberty, the programming arm of
Tele-Communications Inc., owns roughly 49 percent of DCI.

Industry executives were speculating last week that
Turner's reported initial opposition to DCI buying Court TV was a negotiating ploy,
meant to secure some attractive deal points for himself and his networks.

Some suspected that Turner is angling to get control of the
7.5 million Time Warner Cable households that carry Court TV. The idea is that Turner
would put one of his services, such as CNNfn, on in those homes in place of the legal
channel, in exchange for signing off on the sale. A year ago, Turner reportedly studied
merging CNNfn, which has 10 million subscribers, with Court TV.

If DCI ultimately fails to buy Court TV, NBC Cable
president Tom Rogers and Evercore Partners Inc. are still waiting on the sidelines with
their $300 million offer, according to sources familiar with those talks.

A DCI spokesman wouldn't comment on the pending deal,
but he did say that the company would not make any changes in the content of a network
without talking to its cable affiliates first.

DCI is considering replacing Court TV with Discovery Health
or Discovery Wings -- purported digital channels set to debut June 30 -- or with one of
its existing networks, most likely Travel. The latter is trying to bolster its 20
million-subscriber distribution. DCI's strategy would be similar to NBC's
replacement of America's Talking with MSNBC several years ago, although operators did
not object to that plan because of their dislike of A-T.

But operators said analog space is even more valuable today
than it was a few years back, and they're not happy with DCI's notion. Some even
predicted that the proposal would spark a fierce battle, backed by substantial
upfront-cash launch fees by other programmers to snare Court TV's analog slots on
systems other than those of Time Warner Cable, TCI and Cox Communications Inc., the MSOs
that own DCI.

"If they change the [Court TV] programming on that
transponder, then we stop distributing that service," said Phil Laxar, vice president
of programming for Jones Intercable Inc. "We have an agreement to carry a specific
channel with specific content ... to us, it would be an open channel."

A number of his fellow MSO colleagues agreed.

"We have a contract to carry Court TV," said Dave
Intrator, vice president of marketing and programming at Marcus Cable Co. L.P. "If
the new owner plans to change the format, that doesn't guarantee continued carriage
... This may be kind of a land grab to establish a beachhead for a new channel or to
energize an existing one. We can't allow that to happen passively."

MSO programmer chiefs were especially unenthusiastic about
carrying Discovery Health -- a channel that they see as a digital offering that will
initially depend on library product, and not original programming. And they expressed
similar qualms about Travel, which DCI is trying to invigorate with new programming.

"If it were one of their digital services, they would
be strong services in the digital environment, but [they] would be too narrow for
analog," Laxar said. "Specifically, if it's Discovery Health, we already
carry a health service on Knowledge TV [owned by Jones International Inc.] that we're
very happy with. Any other health-related service would be redundant."

Added Palmer, "I see Travel as a digital service. And
I see all of Discovery's new services as digital services."

Because of the uncertainly over Court TV's future, at
least one MSO has opted not to formally sign a carriage-renewal deal with the service, one
source said.

Despite Court TV's anemic Nielsen Media Research
ratings (generally around 0.1), the network fills a unique niche and, in some ways, it
serves as a public-affairs outlet, one Court TV executive argued.

"Operators will not switch Court TV out for a
Discovery product," he said, adding that Court TV gained 5.6 million subscribers last
year.

Some industry observers also pointed out that in the past,
Turner, who is married to actress-fitness diva Jane Fonda, had pondered starting a
fitness-oriented health channel -- which may be another reason why he wouldn't be
thrilled to have DCI get its hands on Court TV and use its shelf space for Discovery
Health.

R. Thomas Umstead contributed to this story.

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