CORPORATE FOCUS: Battle of the Giants Hurts Us All

The immediate victims in the raging battle between Time Warner and Disney are the 3.5 million households who on May 1 suddenly lost cable access to "Who Wants To Be A Millionaire" and other ABC programming.

Win, lose or draw for Time Warner and Disney -- and a negotiated truce is likely soon -- the entire consuming public will be the long-run losers.

Underlying the dispute is the massive consolidation in the media business, which has placed a half dozen megacorporations in control of a wide range of broadcast and cable television networks, movie production, book publishing and radio networks, as well as, increasingly, the cable, satellite, internet and telephone system conduits to deliver media content.

The Time Warner-Disney conflict is one example among many of how media concentration empowers corporations while limiting consumer choice and diminishing the diversity of publicized political viewpoints.

The flashpoint in the current controversy is Disney's demand that Time Warner Cable Systems include more Disney-owned programming in its cable packages. Disney has asked Time Warner to include the Disney Channel in basic cable package, and to feature two other Disney channels, Toon Disney and the Soap Channel. Disney has also reportedly demanded $300 million from Time Warner for the rights to carry its channels.

Refusing to concede to these demands, Time Warner pulled the plug on Disney programming, including the programming aired by seven Disney-owned ABC affiliates.

Time Warner's contract to air the Disney shows originally expired at the end of 1999, but had been repeatedly extended a month at a time. Disney offered to extend the deal for another 24 days -- through the "sweeps" period. Time Warner counter-offered to prolong the arrangement for eight months. Neither side would budge before the May 1 deadline.

Time Warner complains that Disney is asking too much for its programming. The source of this complaint is Disney's gambit to leverage the power derived from its ownership of the ABC affiliates -- whose programming Time Warner must air to offer a viable product -- to force Time Warner to air other Disney channels, and on terms Time Warner finds onerous.

Time Warner has a good point. This structural advantage gives Disney a leg up on independent cable networks, and may undermine viewer choice (to see networks Time Warner won't air in slots given to Disney channels) and increase viewer cost.

For its part, Disney says it is fearful that, especially if its merger with AOL is approved, Time Warner will leverage its enormous power to discriminate against networks which it doesn't own. Disney fears that Time Warner -- which owns both conduit (the cable networks) and content providers (including CNN and the WB network) -- will block competitor channels and networks from using emerging interactive technologies to deliver advertisements or enhanced programming. For example, Disney spokespeople say that Time Warner, favoring Time Warner-owned CNN, might block ABC News from access to the two-way communications needed to ask individual viewers if they would like more information on a topic delivered to them.

Disney has a good point, too. Time Warner's structural advantage may portend additional income streams for its programming only, to the detriment of competitors -- and, consequently, viewer choice.

Much more important than the immediate Disney-Time Warner dispute is what the conflagaration highlights: the ongoing merger mania in the media and telecommunications industries will profoundly shape the face of information dissemination in the coming century. And all signs now point to enhanced influence for the media giants, steady deterioration in programming diversity and increasing news and public affairs homogenization -- at the expense of the cacophonous public debate featuring political perspectives from A to Z (not just of ABC) which should be the foundation of a democratic society.

The first step in addressing these problems is a national moratorium on major media mergers (including blocking of the Time Warner-AOL merger).

Not only would a moratorium halt dangerous trends in media concentration, it would give the public and politicians time to sort through the democratic damage that has already occurred, and to craft appropriate remedies.

We could begin a national debate about far-reaching proposals to enhance our culture and democracy: breaking up the media giants, imposing strict limitations on horizontal and especially vertical integration in the media markets, demanding monetary and in-kind payments from the broadcasters for the public handover of the digital and broadcast spectrum (including creation of an audience network governed by the public and financed by the broadcasters), transferring the entire over-the-air broadcast spectrum to public television outlets, requiring the provision of free television time to electoral candidates and other measures worthy of serious consideration.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor.

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