Handing the television networks a major victory, the Federal Communications Commission yesterday tentatively approved a plan that would allow ABC, NBC and CBS to hold a larger financial share in all of the programs they broadcast.
The commission voted 3 to 1 to lift its 13-year-old rule that has barred the networks from controlling the lucrative syndication rights to rerun network shows or from holding any other financial interest in the future use of programming.
The vote came despite strong opposition from the Hollywood production industry and from Congress, which is considering ways of blocking any change in current rules.
The FCC concluded, however, that these rules have not achieved their goal of increasing competition and diversity in the television programming industry. As a result, the commission said it was time to permit the networks to have a stake in the $800-million-a-year syndication industry.
However, to protect the independent television stations that rely heavily on syndicated shows--such as the popular "M*A*S*H"--from possible anticompetitive practices by the networks, the FCC decided that the networks could not control the syndication process of its prime-time shows. This provision would prevent the networks from deciding which stations could get the shows and at what times they could be aired.
Instead, the syndication process would have to be done through a completely independent company--until 1990, when this requirement would automatically expire.
The commission made its decision tentative to give the public another chance to comment on the highly controversial proposal, which has drawn intensive lobbying from the networks on the one hand, and from producers, directors, writers, actors and independent television stations on the other side. Although Commissioner James Quello said he dissented because he wasn't ready to make even a tentative decision, he indicated that he supported the concept.
The proposal has been one of FCC Chairman Mark S. Fowler's top priorities, and FCC officials said they hoped to adopt a final rule by late fall.
However, the commission could be stymied by Congress, which is considering legislation to bar the commission from changing its rules for at least five years. More than 100 members of the House are cosponsors of such legislation, including 10 of the 14 members of the telecommunications subcommittee.
Meanwhile in the Senate, majority whip Ted Stevens (R-Alaska) is considering attaching an amendment to an appropriations bill that would bar the FCC from using its money to complete the current proceeding.
The push for legislation is being led by the Committee for Prudent Deregulation, a coalition of producers, directors, writers, actors and independent television station owners whose cause has been pushed by such television stars as Alan Alda, Larry Hagman and Henry Winkler.
The committee, which has argued that the current rules need to be retained to prevent network domination of the program-production industry, denounced the FCC's action, calling it a "catastrophe for American television viewers," because it would give the networks greater financial and creative control over the production of programs.
The networks argue that, given the increasing competition from other sources (such as cable and pay-television), they should now be allowed to share in the profitable syndication process.
Noting that their share of viewers has declined from 88 percent in 1979 to 81 percent in 1981 and is still headed downwards, the networks argue that their survival is dependent on their ability to own and market programming however they see fit.
That is why when Thomas H. Wyman assumed the presidency of CBS Inc. last fall, he made the repeal of the syndication rules the company's top priority.
Yesterday, Wyman released a statement saying that although the company was disappointed that the FCC didn't move for complete repeal, the decision was "judicious and well-considered" given all the points of view the commission received.
NBC, however, said the commission's decision still imposed "severe restrictions on the ability of the networks to participate in program syndication."
Even if the FCC reaffirms its decision later this year, the networks will still be unable to share in syndication profits until the Justice Department agrees to modify 1980 consent decrees with the networks. The decrees, signed to settle government antitrust suits against ABC, CBS and NBC, include the current FCC rules barring the companies from having syndication rights.
But industry sources say that the decrees are in the process of being modified to include the FCC's new proposals. They expect the new ones to go into effect by next spring, unless a federal judge objects.