NEW YORK -- Under increasing pressure, Time Warner restored the signals of ABC television stations to 3.5 million homes Tuesday afternoon after agreeing to a temporary truce in its contractual impasse with Walt Disney Co.
The settlement is put off until July 15, the deadline for Time Warner Cable and Disney to come to terms on how much the cable company will pay Disney for use of three of its cable channels. Time Warner had sought an eight-month extension on the talks.Homes in seven areas around the country, including parts of New York, Los Angeles and Houston, had been without ABC for more than 39 hours when the programming resumed at about 3:21 p.m. EDT. In New York, the actress Rebecca Herbst appeared, playing Elizabeth Webber on the program "General Hospital," crying because her boyfriend, Lucky, no longer seemed interested in her. Time Warner had cut off the ABC stations as of 12:01 a.m. EDT Monday. Time Warner's decision came just before the Federal Communications Commission was about to rule in favor of Disney's request to force Time Warner to restore the signal until after the current ratings sweeps month ends on May 24.
Pressure had grown on Time Warner as politicians in Washington and New York either urged Time Warner to put ABC back on the air or declared they would hold hearings on the issue. ABC also planned a joint venture with DirectTV, a satellite company, to buy and install satellite dishes in Los Angeles, New York and Houston for viewers seeking an alternative to Time Warner's cable service.
ABC's ratings were not severely affected Monday night, even with Time Warner blacking out 3.5 million of the 100 million homes with television sets.
Tuesday's settlement came in full view of reporters assembled for a news conference called by Time Warner to propose a new October 15 deadline for the compensation talks. Disney officials, responding quickly to a letter sent by Time Warner, simply changed the date to July and faxed it to Time Warner executives, who, after an impromptu huddle, accepted it in the middle of answering questions about their October offer. Time Warner executives called the acceptance of ABC's date a gesture of good faith.
FCC officials had regarded the dispute as a private matter between the two companies and had urged them to resolve it between themselves. But the FCC's preliminary analysis had concluded that a 1993 commission regulation prohibited the broadcaster from being pulled from a cable system during a ratings sweeps month, federal officials said.
The FCC decision could come into play again over the new deadline because July is also a ratings sweep month. Robert A. Iger, the Disney president, said he was not thinking of the sweep-month angle when he suggested the date be changed to July. But in a reflection of the continuing hostility between the two companies, Mike Luftman, a spokesman for Time Warner, said, "It's very hard to accept that anything Disney says or does in this matter has an innocent reason to it."
Government officials said they were relieved by Tuesday's truce agreement, although frustrated that it had required a temporary blackout that penalized millions of viewers. The FCC chairman, William Kennard, called the situation a "game of brinkmanship" and said in a statement, "The television sets of average consumers should never be held hostage in these disputes."
Strong pressure had been building in political quarters to end the impasse. Sen. John McCain, R-Ariz., who heads the Commerce Committee, had already scheduled a hearing for next Wednesday to address issues raised by Time Warner's decision to take ABC off its systems. After the truce was announced, McCain postponed the hearing until July.