Deregulation Shows Up on Nightly News

The television networks’ decisions to sharply cut back their news budgets--heralded with wide publicity and noisy internal dissent--marked more than one important change for the broadcasters.

The decisions represented the networks’ acknowledgment that after years of bounding growth, growing competition and slowing inflation had brought new financial pressures. And--in a far-reaching if less-noticed change--the decisions marked a shift in the networks’ attitude toward the federal regulators whose displeasure they once feared, say some observers.

The networks, which formerly considered the Federal Communications Commission’s reactions before making major news programming decisions, demonstrated they believe that in an era of deregulation, the panel will not intervene no matter what they do, these observers say.

“Deregulation had a very direct bearing on these decisions,” said Charles D. Ferris, a Washington telecommunications lawyer who was chairman of the FCC from 1977 to 1981. “There’s been a recognition that the old standard--that they had to serve the public interest--just doesn’t apply.”

This new attitude may encourage the cost-conscious managers who last year took control of the networks to make other changes in the quantity and kind of news programming, some observers predict. Pressures on the networks to squeeze profits from the usually unprofitable news divisions have been growing, “and this could accelerate the trend,” said George Gerbner, dean of the Annenberg School of Communications at the University of Pennsylvania.

The staff reductions have helped rekindle debate about the FCC’s 6-year-old deregulation program on Capitol Hill, at a time when many in Congress had already been calling for a rollback of some deregulatory initiatives.

Rep. Al Swift (D-Wash.) is preparing a bill that would require broadcasters to be guided in their actions by a “public interest standard.” Swift, Rep. John D. Dingell (D-Mich.), and Rep. Edward J. Markey (D-Mass.), are co-sponsors of a proposal that would put into law the so-called anti-trafficking rules--repealed by the deregulatory FCC--that were designed to lend stability to the broadcast industry by preventing quick buying and selling of licenses.

Next week, Markey’s finance and telecommunications subcommittee will question the heads of the networks and their news divisions on the reasons for the cuts and the future of network news, among other issues. While no one in Congress has advocated direct control of networks news operations, several complain that the companies seem to be losing sight of their role as public trustee of the airwaves.

“If over-regulation isn’t healthy, under-regulation is an equally unacceptable disease,” Markey says.

While the much-discussed network staff cuts are small compared with layoffs now being made in so many other industries, reductions in broadcast journalism could have far-reaching effects because of its importance in shaping public opinion. A poll released last month by the Roper Organization found that for the first time, network television is the sole basic news source for a majority of Americans.

The cutbacks have represented by far the largest staff reductions ever at the CBS and ABC news operations. CBS, asserting that network news expenses had gotten far out of hand, has cut staffing by nearly a third--to 1,020 from over 1,400 in mid-1985.

The network has closed three overseas bureaus, reduced staffing at others in the United States, and acknowledged that it can no longer send correspondents to cover some stories. While network executives insist the moves will not affect coverage, that assertion is disputed by many, including CBS anchorman Dan Rather, who declared in a newspaper commentary last month that the cutbacks would mean “a product that inevitably falls short of the quality and vision it once possessed.”

ABC has reduced its news staff to about 1,200 from about 1,340 since mid-1985. Top-rated NBC, though fat with profits and least affected by the weakness of the network advertising business, is now studying ways to trim its news budget by 5%.

The FCC’s 6-year-old deregulation effort has brought sweeping changes in the news operations of many local radio and television stations, which are licensed by the agency. Many have cut staff and news programs since the agency, following the lead of free-marketeer Chairman Mark Fowler, three years ago dropped all programming guidelines and stopped pressuring the stations to air informational shows.

The commission never licensed the networks, but in the past it exerted strong indirect influence over them. The FCC, after all, did license the 17 local stations owned by the network’s parent companies, which reach nearly one-quarter of the American viewing public, and are a major profit source for the concerns.

There was also the threat that the commission could involve itself directly in programming decisions, under the 1934 federal law that created the agency and which says broadcasters owe a duty to serve the public interest. Fear of the FCC was such that in the 1950s, CBS launched its “CBS Reports” documentary series to defuse complaints aroused by disclosures that “The $64,000 Question” and other quiz shows had been rigged.

The FCC rarely raised issues of programming, and then only if an issue was raised by an outside group. But “you always knew the FCC was breathing down everybody’s neck,” as one network official put it.

The FCC’s influence was “a steel fist in a velvet glove,” said Nicholas Johnson, the former FCC chairman whose tenure in the early 1960s was a high-water mark in the commission’s interest in programming matters.

On taking office in 1981, Fowler declared that the FCC would not involve itself ensuring that the networks broadcast news and public affairs programming.

“Why should a few people sitting in Washington decide what kind of news people deserve?” says Fowler, who left office April 17 and was replaced by Commissioner Dennis Patrick, an equally ardent deregulator. “The public interest is not served by broadcasters showing boring shows that some people think are good for you.”

The networks felt no pressure to cut back news operations in the early 1980s, when demand for network advertising was strong. Indeed, the networks’ news operations enjoyed bounding growth; the CBS News budget surged to $300 million last year from $90 million in 1978.

But new financial pressures came to bear in late 1985. The slowdown in inflation meant the networks could no longer easily pass on their cost increases to advertisers.

CBS took on nearly $1 billion in debt in its effort to fight off the takeover attempt by broadcast entrepreneur Ted Turner. Capital Cities Communications also shouldered huge debts when it purchased the much-larger ABC for $3.5 billion.

Networks’ new managers were also more cost-conscious than their predecessors. CBS Chief Executive Laurence A. Tisch, Capital Cities-ABC Chairman Thomas Murphy, and Robert C. Wright, installed as chief executive of NBC when it was purchased by General Electric, had long-established reputations as expense cutters.

Thus, last year the networks suddenly had reason to take advantage of the freedom offered by FCC deregulation.

“Deregulation clearly wasn’t the only reason they made these cuts,” said FCC Commissioner James Quello. “But without deregulation they would have been more restrained in what they did.”

Network officials, while acknowledging that the FCC’s interests were taken into account in the past, insist they were not considered in the decisions to make cutbacks. “The two weren’t connected,” said Richard C. Wald, senior vice president of ABC News.

The network officials contend that in any case, the budget cuts won’t change the quantity or quality of news broadcasts. CBS and ABC officials each say they have roughly doubled the amount of air time devoted to news since the beginning of the Fowler regime, largely by adding News executives say more compact broadcast equipment means they can gather and transmit news footage with far fewer staff employees.

But their critics, who include some present and former news staff members, are not so easily convinced. While acknowledging that network news budgets have soared, “it doesn’t seem to me you can cut all those people and leave quality untouched,” says Richard Salant, president of CBS News for 15 years in the 1960s and 1970s. “There was certainly excess spending there, but it doesn’t seem to me it was in the salaries of the veterans they let go.”

Others dispute the networks’ contention that an increase in the amount of air time they devote to news topics establishes an increased commitment to journalism.

Many analysts of broadcast journalism disagree sharply with the view, taken by former CBS News President Fred Friendly, that network news has deteriorated since the “Golden Age” of the 1950s, when CBS produced “Harvest of Shame,” a classic expose of the plight of migrant laborers.

But many assert that the network news business has come under new pressures since the runaway success of “60 Minutes” demonstrated that news shows could make big money. Now, they say, news staffs look harder for the topics of glamour and wide interest, such as drug dealing, child pornography and war.

“The attitude now is that you have to make money,” said one CBS producer. “A lot of people here are concerned.”

Critics say many of the additions to the networks’ news offerings have tended to be less searching news shows, such as “West 57th,” CBS’s hour-long “news magazine.” They contend that coverage of weighty and complex issues, including those involving such institutions as Congress and the courts, has been trailing off.

Some see ominous signs in the networks’ truncated coverage of the 1984 political conventions, and the decisions of NBC and ABC not to run uninterrupted coverage on the eve of the 1986 mid-term national elections.

If the networks’ recent cutbacks do have a negative effect on news coverage, the broadcasters risk further arousing those in Washington who are already talking about re-asserting some regulatory controls, observers say.

“They’ve created a real public relations problem for themselves,” FCC Commissioner Quello said.