FCC Reopens the Debate on Syndication : Television: The agency, responding to an appeals court’s criticism of new rules, asks for comments from interested parties on several key issues.

The Federal Communications Commission, seeking the last word in the debate over whether TV networks should be allowed to compete in the lucrative rerun business, on Thursday reopened its examination of the rules governing syndication.

The agency pledged to avoid a rerun, however, of an earlier two-year battle over the “financial interest and syndication” rules, saying it would limit the re-examination to narrow areas that troubled a federal appeals court when it sent the issue back to the FCC.

A three-judge panel of the U.S. Court of Appeals in Chicago ordered the FCC to better justify the revised “fin/syn” rules it adopted in 1991 or face the prospect of having those regulations lapse in April. The court termed the rules “arbitrary and capricious” and gave the FCC 120 days to rework them.

Specifically, the FCC on Thursday asked interested parties to submit comments on several issues, including its proposed 40% cap on prime-time shows produced in-house by the networks and what the judges termed a lack of safeguards for smaller, independent producers.

The FCC first adopted “fin/syn” rules more than 20 years ago to prevent the networks from using their power to dictate financial terms to TV program producers. The rules barred the networks from the lucrative rerun business, where producers sometimes make enormous profits.

But with the advent of cable TV and home video over the last two decades, the networks claim that the economics of the TV business have changed dramatically. They argue that they should no longer be excluded from the syndication business.

In 1991, a bitterly divided FCC adopted a new set of fin/syn rules that permitted the major broadcast networks limited entry into syndication. The compromise disappointed both the networks, which sought full repeal of the rules, and the Hollywood studios, which sought their full retention.

The FCC will be resuming debate on the issue at a sensitive time.

FCC Chairman Alfred C. Sikes has announced his retirement to make way for an as-yet-unnamed appointment by President-elect Bill Clinton. How a Clinton FCC will handle the fin/syn issue is still unclear.

Veteran Washington lobbyists point out that Clinton clearly had Hollywood’s support in the November election, noting that he is a close friend of TV producer Linda Bloodworth-Thomason (“Evening Shade”).

Yet one of Clinton’s campaign promises was to clean up the influence-peddling that has permeated Washington. Critics will be watching to see whether his FCC will be more sympathetic to Hollywood’s interests.