FCC Chairman Patrick Takes a Hard Look at TV Software

Federal Communications Commission Chairman Dennis P. Patrick says the Hollywood production industry must look for new ways to produce and distribute its films and television shows to survive in a rapidly changing market.

“We have a very fluid and changing marketplace with a number of different technologies competing more furiously than ever for the loyalty of viewers,” said Patrick, who announced his resignation in April and is acting as interim chairman until Congress approves Bush appointee Alfred Sikes as his replacement. “All of the rules for producers and distributors are changing. Hollywood has to learn to deal with the new economics of production.”

Patrick was referring to changes in the television landscape in recent years, including the growth of cable to reach more than 57% of U.S. homes, the increasing number of independent television stations and new distribution services such as videocassettes and satellites.

“What you have had is a great change in the hardware landscape. In the future, the emphasis will be on software,” he said. “We now have to focus on what will fill all of those various channels into the home.”

Because the growth in programming outlets has fragmented audiences, Patrick said the big challenge for producers is to develop products “that will attract and maintain audiences at a cost which is less (than in the past) on a per-program basis.” To achieve this goal, he believes producers must discard traditional approaches to production and distribution and “exploit the new opportunities that this changing marketplace has created.”

“There are really no rules anymore,” he said. “Program producers have to learn to develop new sources of revenue, to exploit barter and syndication deals in different ways, to explore joint ventures and foreign markets, and to identify new secondary markets.”

Patrick’s comments came last week as he prepared to leave office after nearly six years with the commission, the last two as the regulatory agency’s youngest chairman.

Patrick, 38, a conservative Republican, said he leaves the commission satisfied that he has moved the agency forward, setting the stage for the advancement of high-definition television, as well as debates on issues such as whether telephone companies should be allowed to compete directly with cable TV companies.

A staunch supporter of giving the electronic media First Amendment parity with the print media, Patrick is proud of the commission’s controversial decision to scrap the Fairness Doctrine that required broadcasters to cover all sides of controversial issues. While Congress may still take action to recodify the measure, Patrick believes the FCC ruling will stand constitutional muster.

“We did the best that we could do,” he said. “Now the burden shifts to Congress. If they reach a different judgment, that’s the way the system works.”

The Fairness Doctrine, among other issues, intensified the strained relations between the agency and Congress that existed when Patrick succeeded Mark Fowler as FCC chairman. Now, as he prepares to leave the commission, Patrick said the friction was inevitable as the commission pressed forward on an agenda that many Democratic lawmakers opposed.

“We didn’t have friction until we started accomplishing our goals,” Patrick said. “If you do nothing here, you can leave town with as rosy a situation as you began.”

Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, said that while Patrick had a “rocky start,” his relations with Congress improved. “He was an effective advocate of what he thought was right,” Dingell said. However, the Congressman added, “I’m not sure that he understood Congress or how to work with it, but he did show some progress.”

Patrick had only intended to spend a year in Washington when he left the Los Angeles law firm of Adams, Duque & Hazeltine to work as assistant director of presidential personnel in the Reagan White House. He handled the FCC and became familiar with the issues facing the agency.

But even to a lawyer with a magna cum laude degree from Occidental College, he said the changes he has witnessed while at the FCC have been staggering: the divestiture of AT&T;, the evolution of competition and the creation of new technologies that have radically altered the telecommunications marketplace. “No one could have then anticipated the degree of change that the industry would see in the years to follow,” he said.

President Bush has nominated Sikes, 49, assistant secretary for communications and information at the Department of Commerce, where he heads the National Telecommunications and Information Agency, as Patrick’s successor. Confirmation hearings are expected soon for Sikes and two other nominees for FCC slots: Sherrie Marshall, a lawyer here with Wiley, Rein & Fielding who briefly headed the FCC office of legislative affairs, and Andrew Barrett, a member of the Illinois Commerce Commission.

Patrick has been waiting for the confirmation of his successor before he makes plans.

“I don’t know what I will do,” he said, although he has given some thought to the possibility of practicing law--perhaps a national practice that blends entertainment law on the West Coast with communications law on the East Coast--or going to work in the communications industry. As an FCC official, he is precluded from appearing before the commission for a year.

Patrick had intended to stay until a successor is confirmed, but says now that if Congress takes no action before its recess, he will reassess his decision.

A native Californian whose leisure activities include surfing and volleyball, and whose eclectic music tastes range from the Fine Young Cannibals to country-Western singer Lyle Lovett, Patrick says he is leaving Washington with few disappointments.

One, however, came after he was interviewed for several hours by a reporter for Rolling Stone, of which he is a fan. When the magazine’s editors learned of his resignation in April, they scrubbed the article. After eight years in Washington, Patrick had another Washington experience--being a lame duck.