Fox Broadcasting is crowing, Hollywood producers are crying and the Big Three networks are busy contemplating yesterday's Federal Communications Commission decision setting in motion outright elimination of the financial interest and syndication rules.
Under the decision, all rules that have given Hollywood a hold on the TV program and syndication business for more than 20 years could be lifted in time for the 1996-97 development season.
The commission said the regulations will be nixed two years after a federal judge in Los Angeles removes antitrust consent decrees that mostly parallel the fin-syn regs, a ruling that might come within months.
The FCC decision carries several caveats that are cause for concern for the networks, among those the requirement that six months before the FCC rules are destined for elimination, the commission must initiate a review deciding whether fin-syn's finale is warranted.
At that time, the burden will be on Hollywood and its allies to persuade the FCC to retain the rules.
Hollywood is expected to wage an unrelenting court fight to block elimination of the regs. "This fight is not over," warned Warner Bros. chairman Robert Daly. "As long as I'm here, it will never be over."
The FCC also took a giant deregulatory step for the webs yesterday by getting rid of the financial interest portion of the fin-syn rules. Jettisoned was the provision adopted under "the Barrett plan" two years ago that placed a 40% cap on the amount of in-house programs in which a web may invest in its prime time lineup.
Under the new regs, the networks are free to take a stake in 100% of their prime time shows, no matter whether they are produced in-house, co-ventured or purchased from outside producers. They also can produce 100% of their schedules in-house, a scenario that's unlikely, given the high cost of program production.
Notably, the networks can act immediately to beef up their in-house production lineup and don't have to wait for the Los Angeles judge to act in the consent decree case, because the consent decrees carry no lingo limiting a web's in-house production.
Full-time Fox
The FCC also handed a huge gift to Fox Broadcasting Co. by exempting the weblet from all fin-syn restrictions. Fox is now free to program 22 hours a week while continuing its involvement in syndication, a decision that NBC topper Robert Wright called "shocking."
Predictably, Fox Broadcasting topper Lucie Salhany praised the ruling. "We applaud today's steps by the FCC to further unshackle America's great free broadcast networks," said Salhany.
Though the decision was seen as mostly pro-network -- and strongly pro-Fox -- webheads complained about a change in the 1991 rules barring the nets from active domestic syndication in all prime time shows.
The new reg states that domestic syndication rights to all programs in which the networks hold an interest must be brokered off through an unaffiliated third party.
(Under the '91 decision, the FCC allowed a network to actively syndicate 40% of its own lineup.)
NBC's Wright called the decision to nix the financial interest section of the rules "a big step in the right direction. Nonetheless, I was surprised that some critical restrictions were kept intact and others were actually increased."
NBC takes a stand
NBC released a "position statement" in which the web called the FCC action on network participation in syndication of reruns "more restrictive than its own 1991 rules."
Interim FCC chairman James Quello was joined by commissioners Andrew Barrett and Ervin Duggan in making yesterday's decision. Quello and Barrett voted in favor of the entire rules change; Duggan dissented from much of the decision.
"We should have no illusions about what is happening here," said Duggan. "Although this action is couched as a partial retention of the rules, it marks the death of fin-syn."
Perhaps most surprising to fin-syn's supporters was Barrett's abandonment of the "pro-Hollywood" 1991 rules that were cooked up at the last minute as "the Barrett plan." As recently as several months ago, the FCC -- with Barrett on board -- was defending the 1991 rules in court.
Barrett yesterday released a statement saying, "Changing market factors have led me to constantly reassess my position. ... My assessment of the market is that cable continues to be a growing source of bidding for original TV movies and off-network syndicated product."
Both ABC and CBS praised the FCC decision to lift the financial interest portion of the rule. ABC said it will "benefit our company, small producers who need investment partners, and ultimately the American people."
CBS called it "unjustified and impossible to understand" how the FCC could "toughen the syndication rules."
Motion Picture Assn. of America chieftain Jack Valenti said the decision was the result of a "maladjustment of government policy." Valenti noted the FCC is headed by Quello, whom he described as a "temporary chairman who won't be there in four to six weeks," and that two commissioners didn't vote on the issue.
Former FCC chairman Al Sikes' seat sits vacant, while Hollywood's favorite commish -- Sherrie Marshall -- has recused herself from voting on broadcast issues during her job search.
Valenti also lambasted Chicago Judge Richard Posner, who wrote the decision overturning the fin-syn rules adopted in 1991 and sent the case back to the FCC. "It's theater of the absurd to have a judge in Chicago making national telecommunications policy," said Valenti.
Warner Bros.' Daly said independent producers "got murdered" by yesterday's decision, because he claimed the networks now have the ability to "abuse their power" by demanding syndie rights to a new program as a condition for placing the show on the network.
Daly also expressed fear that independent TV stations will be hurt by the rules change.
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