The continuing soap opera struggle between the network television world here and the Hollywood production community is likely to be renewed for at least another season.
Two weeks ago, when the Federal Communications Commission tentatively decided to ignore Hollywood's pleas and give the three commercial television networks a bigger financial stake in programming, the action was only the latest episode in a saga as entertaining as some of the shows the fight is about and as potentially long running as the most successful reruns.
It continues to be one of the hottest subjects in the entertainment centers on both coasts following this week's publication of the FCC's tentative decision on the rules. Widely know as the Financial Interest and Syndication Rules, they have barred the three major commercial networks from owning interests in the shows they do not produce and prohibits them from participating in the subsequent $800 million annual syndication market for those shows. A final decision on changing the rules is expected this fall.
The FCC's tentative decision paper is certain to fuel the battle and intensify the studio-led pressure on Capitol Hill to block the commission's efforts.
Although "Variety," the widely read entertainment trade paper last week bannered the headline "Nets Lose FCC Rules Compromise," that curious display of contrarian thought ought to be dismissed as quickly as one can flip the TV dial. NBC's disappointment that the commission did not lift the rules totally in order to end "constraints on the free television system" is substantively and politically just as silly as the "Variety" headline, since the only thing "free" on the tube is the viewer's willingness to turn it off.
There is little doubt that the anti-network forces, a coalition of movie and independent television station executives, lost and lost big at the FCC.
"What the commission has done is given the networks almost all they have asked for and given the production community almost nothing," said Philip Verveer, a Washington attorney who represents the Hollywood coalition.
Nursing its wounds, the coalition huddled this week in California, attempting to map new political strategies to stymie the FCC plan and figure new recipients for campaign contributions.
Nowhere is that outcome clearer than in the FCC's formal decision paper, which rebukes virtually all the Hollywood community's arguments that weakening of the rules would bring about network dominance, monopoly power and the possible end to the blooming of independent stations.
The rules "appear to fail as mechanisms to increase network or first-run syndicated program diversity and fail to foster competition in the program supply and distribution markets," the three-member commission majority wrote.
Over the past year, the debate over the rules has gradually shifted from the issue of network behavior to the fate of independent stations and the prospects of network program owners "warehousing" or withholding programs. Even on that score, a purported compromise created by the commission to molify Hollywood is unlikely to succeed.
That compromise proposes that a network, six months after a show's network run has ended, must dump the rights to those shows off to an independent syndicator. Second, the networks are required by end of the fifth year of a network program run to transfer those syndicated rights to an independent party. By 1990, these rules would go off the books.
The FCC concluded that the financial interest rule "has failed to increase the independent program supply, has no effect on program diversity or quality, has not decreased network control over program content or creativity, does not represent an inherently undesirable conflict and appears to present no threat to the well-being of the independents."
It's not, in the view of Verveer, a leading legal spokesman for the studio group, much of a compromise. "The decision appears to put the networks in a position to make the syndication market look like whatever they want to make it," he said. "They can choose a syndicator free of regulatory restraint. Laying aside concerns about dirty play, if that marketplace becomes a good deal more concentrated, they independent station operators will pay a good deal more for their product."
Verveer cites the Justice Department's recent opposition to the efforts of movie studios to become partners in the Showtime-Movie Channel venture as raising similar issues about the syndication provisions. That theory, he said, revolves around the problem raised by the pay channel--in effect, paying itself whatever it wants for its own movies, thereby driving up the prices for those films paid by other distributors.
Verveer says the incentives for networks with interests in programs are similar in markets where the networks are station owners. "Our suspicion is that the networks are probably in a pretty good position to collude, perhaps tacitly, and the independents will be out there swinging in the wind," he said.
The Hollywood group will continue to swing, too, now primarily on Capitol Hill, where every indication is that their support is only growing. The House may take up its bill, sponsored by Hollywood's man in Washington, Rep. Henry Waxman (D-Calif.), as soon as the current recess ends. Stay tuned.