• by Wayne Friedman , September 22, 2005

The country's largest phone company, Verizon Communications, has inked a major long-term programming deal with Walt Disney to carry a dozen of the company's television networks, and service for its new and expanding FiOS TV broadband video service.

The agreement includes ABC Family, ABC News Now, Disney Channel, ESPN, ESPN2, ESPN Classic, ESPNEWS, ESPNU, ESPN HD, ESPN2 HD, Toon Disney, and SOAPnet, and well as retransmission deals for ABC-owned TV stations.

In terms of its advertising inventory on these networks, Walt Disney structured the deal with Verizon in a similar fashion to other cable and satellite distribution deals, according to a Disney spokeswoman.

Verizon will get two minutes of advertising time per hour in all Disney networks--except for The Disney Channel, which is commercial-free, and ABC News Now, another commercial-free network that is also available as a broadband and/or video-on-demand service.

Concerning the advertising component of the deal, a Verizon spokeswoman said: "I can't speak to the terms of the agreement."

Verizon's broadband service is a fiber network that proclaims faster speeds than other broadband services that come over traditional cable or phone lines. SBC Communications, Comcast Corp., and others have started up major broadband services.

During the last 12 months, Verizon inked content deals with NBC Universal, A&E Networks, Showtime, Discovery Networks, and Turner Broadcasting, to name a few. It is also close to completing a deal with News Corp.

Verizon's plan is to grow FiOS to pass through three million homes in 15 states by the end of 2005.

This activity is promising, considering the history of phone companies' efforts in the past. Soon after the 1996 cable act freed up phone companies to compete with cable, the baby bell companies--Bell Atlantic, Nynex, and Pacific Telesis--started a proposed video service called Tele-TV, which failed soon after its launch.

"The phone companies have had a checkered past in offering home video," said Brad Adgate, senior vp and corporate research director of Horizon Media.

"This is the very thing phone companies have been talking about for the last ten years. This is the vision of the cable act of 1996 coming to fruition."

Included in the Verizon/Disney deal are other Disney channels and content that have already launched broadband services--ABC News Now, Disney Connection, ESPN360, and Movies.com. For these channels, broadband is carried by traditional cable operators such as Comcast Corp. and Adelphia Communications.

Beginning tomorrow,Verizon will start selling its broadband FiOS TV service in Keller, Texas as a test market. Fiber has been passed through that market's 8700 homes.