In a significant victory for the major broadcast networks, the Department of Justice on Friday proposed lifting restrictions that prohibit ABC, CBS and NBC from owning financial stakes in the programs they air.
The decision is the latest development in the years-long battle between the broadcast networks and the Hollywood studios over allowing the networks into the lucrative TV program syndication business.
Last year the Federal Communications Commission relaxed regulations that would allow the networks limited entry into the $4.8-billion TV program rerun market.
But the networks have been effectively barred from taking advantage of the new rules until the Justice Department lifted actions it had taken--in the form of consent decrees--to restrict the networks from owning and syndicating TV shows.
"The television industry has changed significantly since these decrees were entered," said James F. Rill, assistant attorney general in charge of the antitrust division. "There is no longer rationale for maintaining restrictions that impede efficient marketplace transactions."
The Justice Department's action came in papers filed before U.S. District Judge Robert Kelleher in Los Angeles, who has overseen the decrees since they were entered to settle antitrust lawsuits against the networks more than a decade ago.
Jack Valenti, president of the Motion Picture Assn. of America and the leader in Hollywood's fight to prevent the "fin-syn" rules from being overturned, said he had not yet read the Justice Department's motion and declined comment.
Richard Cotton, senior vice president at NBC and a network lobbyist, said: "As was the case with virtually every independent valuation of the rules and consent decrees, these antiquated prohibitions have again been found to be unnecessary and anti-competitive."
The networks have argued that the economic landscape of television changed radically during the 1980s and that they no longer hold the kind of market sway that they did before the emergence of cable, satellites and other alternative video pipelines into the home.
But the studios have maintained that the networks still use their considerable clout to unfairly negotiate the prices they pay for programs and to extract financial stakes in the programs they air.
Although the financial syndication fight has been one of the longest-running sagas in Hollywood, it is still not over.
Judge Kelleher will be taking comments from interested parties over the next three months before making a final decision on the Justice Department's motion.
In addition, the networks contend that the FCC's new rules do not go far enough and have asked a federal appeals court in Chicago to declare the new rules unconstitutional.
A decision on that is not expected until later this year or next.