Broadcasters oppose coalition proposal

Jan 6, 2003  •  Post A Comment

Broadcast networks will fight a proposal by a coalition of TV producers to bring back a form of fin-syn.

The producers, operating under the banner of the Coalition for Program Diversity, urged the Federal Communications Commission in a filing last week to adopt a new regulation that would force the Big 4 TV networks to devote 25 percent of their prime-time schedules to independently produced programming.

“Fin-syn was an inherently antitrust remedy from the pre-cable and pre-satellite days, when three networks controlled nearly all prime-time viewing,” said Preston Padden, executive VP, worldwide government relations, for ABC parent The Walt Disney Co. “It is ludicrous to suggest such a remedy in today’s highly competitive television marketplace, where the once-dominant networks are struggling to survive.”

Added Carl Folta, a spokesman for CBS parent Viacom, “With literally hundreds and hundreds of outlets and opportunities for programmers, it’s more irrational than ever to restrict TV broadcasters.”

The coalition argued that since the FCC axed its fin-syn rules nearly a decade ago, network-owned programs have come to dominate the network schedules, with the independents’ share of network prime time plummeting from 68 percent before the rules were eliminated to 24 percent now.

“The commission must address the troublesome reality that in the past decade, independent sources of diverse programming have been dramatically reduced as network deregulation prompted a tidal wave of vertical and horizontal mergers-resulting in massive media consolidation,” the coalition said.

Adding insult to injury, according to the coalition, is that networks now regularly demand backend rights in the programming they carry. Fin-syn regulations thwarted network bargaining power by prohibiting them from taking ownership stakes in prime-time entertainment shows.

In its FCC filing, the coalition said that despite network complaints about a financial squeeze, network programming expenditures as a percentage of revenues dropped from 30.3 percent to 26.3 percent over the past eight years.

In addition, the coalition said the new cap would be a boon to advertisers by giving them a way to reach audiences turned off by the “blandness” of existing network fare.

“It is an accepted tenet throughout the advertising industry that viewers are more attentive to commercials in programs that they care about,” the coalition said. “It is hard to care about redundant programming that is very similar to everything else on the air.”

On a related note, the coalition asked the FCC to reject network pleas to ax rules that bar broadcasters from buying TV stations reaching more than 35 percent of the nation’s TV homes and prevent the Big 4 TV networks from merging with each other.

At deadline, members of the coalition included Sony Pictures Television, Carsey-Werner-Mandabach, Marian Rees Associates, the American Federation of Television and Radio Artists, the Directors Guild of America, MediaCom and the Screen Actors Guild.

The coalition filing came in response to FCC proposals to ax or relax its media ownership rules. Other comments filed in response to the FCC’s proposal last week include:

* In a joint filing, the National Association of Broadcasters and the Network Affiliated Stations Alliance urged the FCC to keep the 35 percent national TV ownership cap and the dual network rule barring the Big 4 TV networks from combining.

“If networks own their stations, they can require network programming to be aired even if alternative programming is more suitable for the local audience,” the groups said.

The groups also said retention of the dual-network rule is particularly important in the wake of fin-syn’s demise. “If the number of major networks were to decrease, the network ‘funnel’ through which national television broadcast programming must pass would be narrowed,” the groups explained. “Allowing the major networks to merge would also increase their economic leverage over affiliates to the detriment of localism.”

* In another joint filing, Fox, NBC and Viacom urged the FCC to junk the cap-and all of its other media ownership rules-relying on antitrust regulations to police the marketplace.

At deadline, a spokesman said ABC planned to file separately.

* NAB, in yet another filing, asked the FCC to radically revise its duopoly rule to let a TV station buy a second station in the same market as long as the acquired station has less than a 10 percent share of the viewing audience.

Under the agency’s existing rule, broadcasters can buy a second station only if the deal won’t merge two of the market’s four top-rated operations and leaves at least eight independently owned stations behind.

In its filing with the FCC, NAB said the existing rule is overly restrictive.

NAB’s proposed alternative would “provide needed financial relief for struggling lower-rated stations, especially those in medium and small markets,” the association said.#