FCC allows Big 4 to own WB or UPN

Apr 23, 2001  •  Post A Comment

Clearing the way for Viacom to keep UPN, the Federal Communications Commission last week voted 3-1 to modify its dual-network rule.
The dual-network regulation barred the Big 4 TV networks from merging with each other or acquiring UPN or The WB.
It became a big problem for Viacom after the company acquired CBS last year.
Without the FCC’s intervention, Viacom would have had to divest itself of UPN by May 5 under a condition imposed when the FCC originally approved Viacom’s acquisition of CBS last year.
But an FCC majority last week held that the part of the rule that applied to UPN was no longer needed to achieve the rule’s original goal of encouraging media diversity.
“The change we make today will not harm and indeed is likely to promote competitive efficiency and diversity,” FCC Chairman Michael Powell said in a statement.
Said Viacom, in response: “We are encouraged by the FCC’s willingness to revisit and amend its traditional positions in light of the realities of communications in the 21st century. We hope that the commission will take additional actions in the future to rationalize other areas under its oversight.”
Despite Mr. Powell’s well-known deregulatory leanings, the FCC voted to retain the part of the rule that bars any of the Big 4 TV networks from combining. That’s perhaps because Democratic FCC Commissioner Susan Ness-one of the votes in the FCC’s majority-believes that removing the bar on the Big 4 would “dangerously diminish source and viewpoint diversity.”
With the FCC’s changes, one of the Big 4 TV networks could also acquire The WB-or AOL Time Warner could acquire one of the big networks.
But sources said The WB is not for sale, and neither is NBC, the only major network recently rumored to be in play. “Bob Wright [NBC president and CEO] recently said unequivocally that GE has no plans to sell NBC,” an NBC source said.
FCC Commissioner Gloria Tristani said she dissented from the FCC’s decision because she doesn’t believe reducing the number of broadcast network owners would lead to greater viewpoint diversity-the goal the agency is supposed to be shooting for.
“Sadly, the train of consolidation continues to run on time,” Ms. Tristani said.
But Mr. Powell said the FCC’s record in the proceedings on the rule demonstrated that continued ownership of UPN by CBS is essential to the continued viability of UPN and its local affiliated stations.
“The failure of this network would result in a loss of diversity,” Mr. Powell said.
GOP FCC Commissioner Harold Furchtgott-Roth-the majority’s third vote-said he would have thrown out the entire set of regulations.
“They are an anachronism,” he said.