Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post
Newsgroups: americast.wpost
From: americast-post@AmeriCast.Com
Organization: American Cybercasting
Approved: americast-post@AmeriCast.com
Subject: Court Voids Syndication Rules In Major Victory for Networks<By Paul
Date: Fri, 6 Nov 92 05:06:14 EST
Message-ID: <9.1992Nov6.050614@AmeriCast.com>

Court Voids Syndication Rules In Major Victory for Networks<By
Paul Farhi<Washington Post Staff Writer<

In a victory for the three TV networks, a federal court yesterday
tossed out rules that had limited the networks' ability to sell
their entertainment programs in the lucrative TV rerun market.  A
three-judge panel of the U.S. Court of Appeals in Chicago vacated
the "financial interest and syndication rules" (fin-syn), which
were modified last year by the Federal Communications Commission
to restrict ABC, CBS and NBC from competing with Hollywood's ma-
jor studios on sales of reruns to cable and independent stations.

 The ruling brought the networks closer to their goal of elim-
inating the rules, a step that would not only allow them to share
in the $5 billion-a-year market for syndicated programs, but also
sweep aside federal restrictions that prevent the networks from
merging with the major studios or other TV production companies.

 In yesterday's ruling, the court essentially said the FCC's de-
cision to modify the fin-syn rules was not justified, given the
evidence it based its decision on.

 However, the court yesterday appeared to leave the door open for
Hollywood. It gave the studios and the FCC 30 days to argue for
reinstating the rules.

 It also said the FCC could revisit the issue and rewrite the
rules. An FCC dominated by appointees of President-elect Bill
Clinton is widely expected to look favorably on the networks'
case.

 Last year, after a protracted lobbying battle between Hollywood
and the networks, the FCC voted to relax, but not eliminate, the
21-year-old fin-syn rules. Until that time, the rules had kept
the Big Three from producing, owning or reselling their own pro-
grams - in effect forcing the networks to "rent" shows such as
"Cosby" and "Cheers" from companies such as Paramount Communica-
tions Inc., Walt Disney Co., Time Warner Inc. and MCA Inc. The
studios then had the right to resell the shows to independent
stations and cable outlets after the networks had aired them.
The rules were adopted in 1970, when the networks commanded vir-
tually the entire prime-time TV audience, to prevent the networks
from holding too much power over the creation and distribution of
entertainment shows.

 Through the lobbying of its Washington trade group, the Motion
Picture Association of America (MPAA), the studios had kept the
rules in place for two decades, in effect controlling the market
for themselves.

  A separate legal proceeding is underway in Los Angeles to lift
the 1970 consent decrees that essentially codified the restric-
tions on the networks.

 Even though the FCC partially relaxed the strictures last year,
the networks appealed the decision, arguing that their dominance
over the airwaves had been so eroded that any restriction was un-
fair. Hollywood argued for tougher limits.

 MPAA President Jack Valenti said he had not seen the judges'
ruling yesterday, and had no comment.  02:06 11-06C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

For more information, send-email to American Cybercasting Cor-
poration (usa@AmeriCast.COM)