WASHINGTON — Walt Disney Co. warned regulators Tuesday that an America Online-Time Warner merger would severely limit entertainment programming and urged that tough restrictions be imposed on the deal.
Disney called on federal regulators to split the vast content and distribution holdings of the two into separate subsidiaries, or force AOL-Time Warner to provide its television and Internet rivals with nondiscriminatory access to their cable networks.
"AOL and Time Warner will have more market power than Bill Gates ever dreamed of," said Preston Padden, Disney's chief Washington lobbyist.
Disney's 83-page filing with the Federal Communications Commission intensifies the issue as the agency moves toward a public hearing Thursday on the proposed merger of AOL, the world's largest Internet service provider, and Time Warner, an entertainment conglomerate and one of the nation's biggest cable operators.
No immediate decision is expected to emerge from the FCC hearing, and sources close to the agency expect the commissioners to ultimately approve the merger. But public debate about the deal could influence whether the five-member commission will impose any restrictions on the transaction.
Disney, which owns the ABC network, was joined this week by General Electric's NBC, which also is urging strict restrictions on any AOL-Time Warner deal. Some consumer groups and critics also fear that the combined firms' huge presence in cyberspace and cable would create so much concentration of power that the companies could restrict consumer choice and raise prices.
They argue that Time Warner's cable networks and AOL's Internet services would favor movies, TV shows, music and other content made by its entertainment divisions, which include Warner Bros., HBO and CNN.
But AOL and Time Warner officials counter that Disney itself has a similarly dominant position in the broadcast world. Disney acknowledges that it produces about 70% of prime-time programming on ABC. An AOL spokeswoman said any notion that the AOL-Time Warner merger would create a powerful new Information Age gatekeeper is a fantasy.
"AOL and Time Warner have been crystal clear about our commitment to content diversity, open access and consumer choice," said AOL spokeswoman Kathy McKiernan. "That means ensuring that consumers have access to a wide array of content--regardless of who is producing it--and the opportunity to choose from multiple" Internet service providers. "I think the bottom line is that Disney's lobbyists are less interested in the facts than [in] spinning fantasies," she said.
