Can the FCC Revive the Indies?
By Norman Horowitz, Media consultant -- Broadcasting & Cable, 2/10/2003
Three decades ago, the FCC, in its infinite wisdom, promulgated the Prime Time Access Rule (PTAR) and the Financial Interest and Syndication Rules, popularly known as the fin-syn rules. PTAR barred the networks from programming the half-hour just before prime time, usually 7:30 to 8 p.m. Fin-syn prohibited the network from having financial interest in its prime programming or being involved in the syndication of shows after their network runs. The networks failed to persuade the FCC to rescind these rulings. As a result, the CBS syndication holdings were spun out into Viacom and the ABC assets went to Worldvision.
Was PTAR good for America and its citizens? Probably not. The FCC expected these PTAR time periods to be used for news, informational, and documentary programs. But, instead, America got The Gong Show, as well as other mundane but profitable content. Was this content harmful to America? Probably not.
Yet the existence of PTAR and fin-syn did in fact make an enormous difference. It helped fuel enormous growth in broadcasting, cable, satellite and broadband program-delivery systems. And in Hollywood, the industry came alive. Independent production and distribution companies popped up everywhere.
Where are these companies now? With the exception of Carsey-Werner, they're all gone. Under heavy pressure from the networks, the FCC rescinded the fin-syn rules in their entirety in the mid 1990s. The networks could own their own programming, and the door opened for mergers between the big studios and the networks. These vertically integrated companies are now able to control the production, broadcast and subsequent distribution of their content. Their god is the god of self-interest and profitability. I would love to hear the FCC's explanation as to how this has been in the best interest of the viewers or "good for competition and diversity."
There is a renewed industry agitation to eliminate, or at least reduce, the network/studio stranglehold on programming. Is this a noble cause? Absolutely. Does it have any chance of success? Absolutely not. But let's assume that the networks were compelled by the FCC to set aside 25% of their schedule for programming in which they could have no financial or syndication interest. What would happen? Not much. The independent financing sources available while the original fin-syn rules were in effect are gone. The overseas marketplace has changed dramatically, and the U.S. syndication model is not what it used to be.
So what should the FCC do now? Here are some ideas: 1) find a way to increase program diversity; 2) leave cross-ownership rules as they are; 3) once again bar ownership of two TV stations in the same market; 4) don't allow any existing broadcast networks to buy any of the other networks; 5) reduce the cap on national TV-station ownership, don't increase it; 6) remind broadcasters that the airwaves they use do belong to the public.
When the FCC rescinded fin-syn, it did indeed cause Humpty Dumpty to have a great fall, and all the king's horses and all the king's men, can't put Humpty Dumpty back together again. But the FCC should at least try.
Norman Horowitz is a media consultant and former president of Columbia Pictures Television Worldwide Distribution, Polygram Television and MGM/UA Telecommunications, as well as a former CBS/Viacom executive.
