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Media deregulation

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TV industry girds for deregulation showdown

WASHINGTON (Variety) - Key players in the entertainment industry declared war on each other Thursday, as Washington gets set to loosen media ownership rules and allow another tidal wave of media consolidation.

After weeks of huddling in secret, opposing sides revealed their battle plans in thousands of pages of documents filed with the Federal Communications Commission, center of the action. Both sides took extreme positions, leaving plenty of room for negotiations in the weeks to come.

Some groups not only want the FCC to leave the rules as is, they also want the agency to bring back some version of the financial-syndication rules, which barred a broadcast network from having a stake in the programs it aired.

At the other end are big broadcasting guns NBC, News Corp. and Viacom, which are itching for to add TV stations to their lucrative stables. They didn't even try to sugar coat their argument in a massive filing, saying the FCC should "abandon the media ownership regulatory scheme in its entirety."

The three media giants applauded FCC chairman Michael Powell -- known as a deregulator -- for his agency's commitment to conducting a "top-to-bottom" re-examination of its rules.

Thursday's filing deadline was just one step in the FCC's review, which is likely to take at least another six months. At some point, the full commission will vote up or down on the rules.


Rules up for grabs include a national cap barring a broadcaster from reaching more than 35% of the national audience; a cap on the number of TV and radio stations a company can own in the same market; a cross-ownership rule blocking a broadcaster from owning a newspaper in the same major market; and a rule blocking a major network from owning another major rival.

Those opposed to repeal of the rules argue that the major networks already control the airwaves, drowning out independent voices by favoring their own programming.

The answer? Bring back "fin-syn" -- the now-defunct rules governing networks' financial interest in the syndication of series -- scrapped by Washington nearly a decade ago.

Or so says one coalition comprised of Sony Pictures Entertainment, indie producer Carsey-Werner-Mandabach, ad agency MediaCom, the Screen Actors Guild and the Directors Guild of America. The coalition says 25% of a network's primetime lineup should be set aside for independently produced shows.

"The narrow primetime television-programming marketplace has become dysfunctional as diverse sources of independently produced, non-network programming has been eliminated or seriously compromised by the unregulated major networks," the coalition said.

Over the last nine years, networks have gradually upped their stakes in programming, with CBS, ABC, NBC and Fox now owning or co-owning almost all of their own primetime schedules.


CBS president Leslie Moonves dismissed the coalition's comments on program diversity.

"I vehemently disagree with the idea that TV is more bland than it was 10 years or even 20 years ago," Moonves told Daily Variety. "With 'Survivor,' 'The Sopranos,' 'CSI,' 'Law & Order,' 'Sex and the City,' 'The Bachelor' and 'Fear Factor' all on the air, to call TV more bland is ridiculous. Especially in drama, this really is the golden age of television."

Moonves also objected to the notion that networks want ownership of all series they air.

"All the networks are looking and begging for outside suppliers to provide the financial resources to go with these series," he said. "We're forced to own (parts of) shows to help cover the deficit. We welcome as many outside suppliers as we can."

Indeed, in the past two years, it's become increasingly common for studios to ask networks to come on board as financial partners in projects, particularly when the studio is producing a show for a web outside its corporate family (such as 20th Century Fox producing a show for CBS.)

Some industry observers were also surprised to see Sony and Carsey-Werner-Mandabach, producer of Fox sitcom "That 70s Show," filing briefs in favor of tweaking fin-syn.

"Sony was virtually out of the network TV business a year and a half ago," one executive said. "We begged them to bring us shows. And (C-W-M) has projects in development all over town, even though they want you to cover 100% of a show's deficit and get no ownership."

The depth of the debate over the FCC's ownership rule review is striking, as shown by SAG's willingness to join up with MediaCom, even though it's about to enter into negotiations with the ad industry over the basic ad contract.

"We want to encourage access to mainstream networks for independent producers," said Pamm Fair, SAG's Deputy National Executive Director for Planning and External Affairs.

Another Hollywood coalition filing documentss with the FCC was the newly formed Center for the Creative Community. It wants fin-syn to be revived to some degree as well.

"Not only is the quality of television harmed by concentrated corporate control of America's airwaves -- so are America's culture and economy," said Jonathan Rintels, the center's executive director.

Board members include Academy of Motion Picture Arts & Sciences president Frank Pierson, Writers Guild of America West president Victoria Riskin, actress Sissy Spacek, writer-director-producer Lionel Chetwynd, producer Tony Adams, producer Craig Haffner, screenwriter Gregory Allen Howard and writer-director-producer James Sadwith.

Repeal of the 35% national cap also is opposed by the National Assn. of Broadcasters and the network affiliates.

Essentially, those opposed to relaxing the rules are arguing that further media deregulation will reduce diversity, make programming blander, raise advertising costs and put more little guys out to pasture.

But broadcast network executives say the world has changed drastically, and that the FCC regulations were written at a time when the three broadcast networks were the only game in town. Such is the case no longer, evidenced by the proliferation of cable and satellite broadcasting.

"They may not have noticed that things have changed," said Disney lobbyist Preston Padden.


Copyright Reuters Ltd. All rights reserved. The information contained In this news report may not be published, broadcast or otherwise distributed without the prior written authority of Reuters Ltd.

01/02/2003 23:09

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