Smaller cable operators who are served by 10 Walt Disney-owned ABC affiliates will be allowed to carry the signals for free over the next three years.

Disney said yesterday that the 91 small cable operators who are served in its 10 ABC-owned markets will be allowed to carry the ABC signal for three years, from 2009 to 2011, without requiring them to carry any of Disney’s affiliated networks.

Disney’s offer means the smaller cable operators won’t have to engage in retransmission talks, some of which became contentious last year between cable operators and broadcasters.

The ABC affiliate stations include outlets in New York, Los Angels, Philadelphia and San Francisco.

The American Cable Association, which is made up of smaller cable operators, applauded Disney’s offer on one hand, but said it wasn’t nearly enough on another.

“Today is a banner day for the cable industry,” said ACA president and CEO Matthew M. Polka in a statement. “A major broadcaster and programmer has finally admitted that the retransmission consent market is broken and does not work the way Congress intended.

“On behalf of the American Cable Association and the very small number of cable operators who qualify for the ‘Disney relief,’ we say – it is about time. Disney should be congratulated for being the first to see the blinding light on this issue, but should not be given a free pass on its ongoing market abuse against other small and medium-sized cable operators who will be still charged discriminatory rates.”

Polka said true reform of retransmission contracts need to take place in Congress with the aid of the Federal Communications Commission. He also said that the “Disney relief” offer would only impact 1 percent of the cable subscribers across the country.

The ACA is concerned that the combination of the upcoming digital transition in February and the renegotiating of retransmission contracts will have an adverse effect on smaller cable operators if broadcasters decide to pull their signals during the negotiations. The ACA has asked the FCC for a “quiet period” during the retransmission negations. See full story here.

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