updated 3/7/2010 10:04:38 PM ET 2010-03-08T03:04:38

Cablevision Systems Corp customers were able to watch the live broadcast of the Oscars on Sunday after the cable company reached a last-minute deal to return WABC-TV to air in a dispute over fees.

Many New Yorkers had faced a blank television screen instead of red-carpet Oscars glamour until 12 minutes into one of the most-watched televised events in the U.S. as both sides argued publicly over who was responsible for more than 3 million homes missing the event.

Walt Disney Co's local ABC station returned to Cablevision homes just before the first presentation for Best Supporting actor started.

After a dispute which had become increasingly bitter and personal between Cablevision's Dolan family and Disney Chief executive Bob Iger, the cable company announced the return of WABC with a terse statement which simply said it was "happy" with the return of WABC.

The statement gave no financial details of the agreement although Cablevision had repeatedly claimed Disney was demanding an extra $40 million on top of the $200 million it already receives.

Disney executives had privately disputed those numbers and said they had been trying to reach a deal with Cablevision for two years.

At the heart of the dispute is an ongoing debate across the cable TV industry about how much cash cable and satellite companies should pay for the right to carry free-to-air broadcast networks like ABC, CBS, Fox and NBC.

Disney/ABC's likely next major stop will be in September with Time Warner Cable Inc, the No.2 U.S. cable company with more than 13.5 million customers. Time Warner Cable already had a similarly tense battle with News Corp's Fox over New Year's eve.

Cablevision New York-area customers lost signals from WABC in the early hours of Sunday as the cable operator and the TV network were unable to come to terms.

Just ahead of the start of the awards extravaganza at 8PM Eastern Time, Bob Iger, the Chief Executive of Disney insisted from the red carpet that the "lines are still open" when asked about negotiations between the companies.

The top U.S. media industry regulator and the governor of New York had both issued statements urging the companies not to make consumers suffer because of their dispute.

Both companies had released statements Sunday afternoon suggesting that they were making efforts to have ABC restored to Cablevision viewers in time for the Oscars.

But at 8PM New York time Cablevision customers could still only see a white television screen with a blue stripe with white letters across the middle where Cablevision apologized and explained that ABC had pulled the channel.

Cablevision offered free movies on demand for the day, including the films nominated for an award.

The U.S. Federal Communications Commission weighed in on the dispute, criticizing both companies in a statement issued Sunday. The communications regulator said it was in contact with both companies and monitoring the situation.

Video: Millions face night without Oscars "Customers should not suffer due to the inability of these two companies to successfully negotiate a deal," the FCC's media bureau chief William Lake said.

Cablevision had said in a statement earlier in the day that Disney had been responsible for pulling the signal and called for CEO Iger to return WABC to its customers while negotiations continued.

ABC and Cablevision have been fighting a very public battle in the last week, accusing each other of being unreasonable in a dispute over how much money the cable company should pay to carry ABC's free-to-air broadcast signals.

This cable programing contract spat is the latest to involve Cablevision, which also fell out with Scripps Network Interactive just ahead of New Year's Eve and lost signals for the Food Network and HGTV for three weeks.

Cablevision would have been keen to avoid a similar loss of programing dragging on.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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