FCC Waives Rules That Blocked Fox’s Expansion Plans : Media: NBC and CBS say the one-year deal is unfair because it permits the company to continue in the program syndication business, from which the other networks are banned.

Federal regulators Friday gave Fox Broadcasting clearance to aggressively expand its television programming even as it participates fully in the lucrative rerun business.

Over the objections of the major television networks, the Federal Communications Commission granted Fox Broadcasting a temporary waiver of the so-called financial interest and syndication rules, which prevent networks from earning money from reruns and taking an ownership interest in shows they broadcast.

Under current FCC regulations, once Fox passed the threshold of providing 15 hours of prime-time programming per week, it would be forced to sell off the rights to such programs as “A Current Affair” and “MASH,” which are sold to local TV stations.

Fox broadcasts a total of nine hours per week over three nights.

NBC and CBS immediately blasted the waiver as anti-competitive and unfair because it would allow Fox to continue in the program syndication business, from which the three major networks have been banned for 20 years.

The Motion Picture Assn. of America, the lobbying arm of the major Hollywood studios, declined to comment.

The FCC waiver, which is only for one year, would allow Fox to broadcast an additional 3 1/2 hours of programming per week above the current 15-hour trigger prescribed by law. Fox plans to add two hours of programming each on Wednesday and Friday nights this fall, in addition to broadcasting a half-hour children’s program on weekday afternoons and a three-hour block of children’s programming on Saturday mornings.

The decision allows, at least temporarily, the fourth network to proceed with its aggressive expansion plans without its parent, Fox Inc., being forced to sell a highly profitable wing of its film studio.

In granting its waiver, the FCC said it was supporting its policy of helping to foster additional broadcast networks, as well as lending “stability” to Fox’s 112 UHF affiliates and furthering the FCC’s goals of increased children’s programming.

The FCC said its decision does not “prejudge or foreshadow” the outcome of its current proceeding to re-evaluate the “fin/syn” rules. The FCC two months ago said that if the networks and studios did not reach a compromise on the rules, it may force a resolution upon the industry.

The networks and studios, which have been “discussing” the issue for seven years, have until June 14 to present the FCC with a negotiated compromise.

NBC called the waiver “unfair and counterproductive to the current round of negotiations, because it removes pressure on Fox and the studios to reach a settlement.” But NBC was encouraged by what it said appeared to be a “willingness to remove anti-competitive regulatory barriers (that) may signal the first step to more fundamental change.”

CBS objected to what it termed a “special dispensation” for Fox and said the waiver “will significantly complicate the private negotiations between the networks and other interested parties.”

Preston Padden, senior vice president of Fox and the executive responsible for shepherding the petition through the FCC, disputed that point. “Part of the FCC’s strategy appears to be to grant us only a waiver for this season, so we have incentive to bring about a solution.”