FCC Grants TV Networks Entry Into Rerun Market

A bitterly divided Federal Communications Commission voted Tuesday to grant the television networks limited entry into the lucrative TV program rerun market, but it stopped short of lifting the rules entirely, as the networks had sought.

The 3-2 decision, although aimed at settling one of the longest and most intense lobbying campaigns Washington has ever faced, will only extend the battle between the networks and Hollywood studios over the $4.8-billion syndication market, industry executives said.

As expected, the FCC voted to relax the 21-year-old “financial interest and syndication rules” that have barred ABC, CBS and NBC from owning most of their prime-time programs, or from selling the reruns of those shows to local TV stations, cable TV networks or foreign broadcasters.

Both the networks and studios, which have been unable to reach a private agreement despite hundreds of hours at the negotiating table, claimed the new rules would harm them and did not go far enough in addressing their opposing concerns.

FCC Chairman Alfred C. Sikes, after consulting with fellow members, rejected a last-minute plea from several politicians, a group of Hollywood producers and the Justice Department to again delay a vote on the proposal.

The parties had requested more time to study a new proposal, fashioned by a majority of the FCC commissioners late last week, modifying the so-called “fin/syn” rules. The new plan included significant revisions granting the networks access to the booming foreign syndication markets.

Tuesday’s vote hardly means the end to the acrimonious debate. Both the networks and Hollywood studios said they would petition the FCC to reconsider its vote, and most observers expect the decision to end up in federal appeals courts, where it could take years for a ruling.

The networks have been fighting for repeal of the fin/syn rules almost since the day they were enacted in 1970 to curb their power over the production of TV programs.

Proponents for repeal, which include the Federal Trade Commission, the President’s Council of Economic Advisers, the Justice Department and even the FCC’s professional staff, argue that the networks are much less powerful than they once were due to the growth of cable TV, home video and Fox Broadcasting’s fourth network.

Fox won a significant victory in Tuesday’s vote. The emerging network will be allowed to expand its prime-time programming to as much as 15 hours a week without being defined officially as a network and thus falling under the FCC’s rules that still limit network participation in the syndication market.

Despite an 11th-hour revised plan floated by FCC members Sherrie Marshall, Ervin Duggan and Andrew Barrett to “reach out” to Sikes and commissioner James Quello--who both advocated full repeal of the rules--the five members remained far apart on the issue.

The FCC chairman described his fellow members’ plan as based on “outdated perceptions and misplaced concerns.”

Over the past several months, Sikes has had to take an embarrassing back seat as head of a regulatory agency while Marshall led a majority of the commissioners to fashion a new set of regulations. These allow the networks to enter certain parts of the syndication business while largely keeping it under the control of the major Hollywood studios.

“I am a deregulator,” said Marshall, who described the new rules as “calibrated deregulation . . . to ensure (viewers) continue to enjoy the great panoply of creative programming that is the hallmark of American television.”

Marshall had come under criticism for her position by the networks, some of which darkly hinted that she was siding with Hollywood because of her avocation as a screenwriter.

This rumor was the subject of an irate rebuke from Duggan, who called it “a canard.” He also angrily denied reports that the White House tried to interfere in the proceeding, as some had speculated, and that commissioners who did not toe the line politically would see their careers cut short.

“I welcome the opportunity to explain this tomorrow to Mr. Dingell,” Duggan said. He was referring to scheduled hearings today on Capitol Hill, where Rep. John D. Dingell (D-Mich.), the powerful chairman of the House Energy and Commerce Committee, is expected to grill FCC members on the vote.

Hollywood studio executives complained that it was concern from Dingell--who opposed any plans that would favor foreign companies over American ones--that prompted the FCC to grant the networks greater access to the overseas syndication markets.

Four out of the seven major Hollywood studios are now owned by foreign corporations, but the American-owned networks have been barred until now from the overseas syndication business while foreign companies are allowed to sell their programs in the United States.