Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, April 10, 1991 TAG: 9104100057
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The commission voted 3-2 to relax its Financial Interest and Syndication Rules, which have kept CBS, ABC and NBC from owning most of their prime-time entertainment programs or from selling the reruns.
The reruns rights are lucrative. Programs such as "The Cosby Show" and "Cheers" have returned millions of dollars in syndication.
After June 15, the networks will be allowed to own up to 40 percent of their prime-time shows if they produce the shows themselves. They also will be allowed to sell the reruns abroad.
Both sides complained about a provision that sets up a two-step process under which the networks could own an interest in a show and also hold both domestic and foreign rerun rights.
First the network must agree to air a show. A month later, the network and the producer may agree on the network's ownership of a show and the rerun rights.
Bob Daley of Time Warner said in a statement that under the two-step process, producers could be forced to give up some of their ownership and the rerun rights just to get a show on the air.
Fox Broadcasting, whose very existence was at stake in the battle, scored only a moderate victory. Under the rule modifications, Fox would not be considered a network, which allows that company to produce its own shows and sell the reruns, until it adds three hours of prime-time shows.
The FCC rejected requests from the studios and from the Bush administration to delay the vote.
Commissioner Sherrie Marshall said the plan was "not a blind response" to calls for complete deregulation of the networks, and was "as deregulatory as reality permits."
But Commissioner James Quello, who wanted to repeal the rules, said calling the modifications deregulation was "like telling an inmate at the end of his term that he's free to go so long as he doesn't venture beyond the prison walls."
Marshall, Andrew Barrett and Ervin Duggan supported the proposal and Quello and FCC Chairman Alfred Sikes opposed it.
Under the fin-syn rules, the networks essentially lease prime-time programs from producers, who make the shows at a deficit with the expectation they'll recoup their losses when they sell the programs to television stations after their network runs.
The networks maintain that they need to share in these revenues to remain competitive in an increasingly international TV marketplace.
The FCC established the fin-syn rules when CBS, ABC and NBC dominated television. But the networks, the Bush administration and some analysts say the rules now are outmoded in the face of pressures from cable, video cassette rentals and independent TV stations.
The prime-time audience share of the three major networks has declined from about 95 percent in 1970 to about 60 percent today.
by CNB