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House Bill Trouble for Comcast-Disney?

3/31/2004 7:30 AM Eastern

Attention, Brian Roberts and Steve Burke: A member of Congress is messing with your plan to buy The Walt Disney Co.

Rep. Maurice Hinchey's (D-N.Y.) bill, introduced Tuesday, would reinstate the ban on the common ownership of a TV station and a cable system in the same local market.

In theory, Hinchey's bill would be a problem because Comcast's $66 billion bid for Disney included the purchase of 10 ABC stations. In Chicago, Philadelphia and San Francisco, Comcast would potentially own the local ABC affiliate while serving, respectively, 84%, 79% and 96% of the markets' cable subscribers.

The Comcast-Disney merger, if it were approved unchanged, would create TV-cable cross-ownerships in five other markets, including Fresno, Calif., where Comcast serves 87% of area cable customers, according to Sanford C. Bernstein & Co. research.

Comcast spokesman Michael Weiss declined to comment on Hinchey's legislation.

Hinchey's bill also contained other surprises for cable.

In one provision, a cable network that is owned by a "large cable operator" and reaches fewer than 16 million cable households would have to set aside 35% of its primetime hours, measured monthly, for independently produced programming. All other eligible cable networks would have to allocate 25%.

The bill's definition of primetime programming exempted "newscasts, sports programs or telecasts of feature films."

A large cable operator was defined as one with 3 million or more subscribers -- a level that roughly excludes every cable company except Comcast, Time Warner Cable, Charter Communications Inc., Cox Communications Inc. and Adelphia Communications Corp.

 

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