Viacom cleared to hold CBS and UPN - Broadcasting & Cable

Viacom cleared to hold CBS and UPN

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Viacom won the go-ahead to keep CBS and UPN Thursday as the FCC relaxed restrictions on dual network ownership.

The FCC decision added to changes Congress enacted in 1996 when it eased the long-standing prohibition barring one company from owning two networks. Since then ABC, CBS, NBC and Fox have been permitted to launch new networks or buy any net launched in the past five years, namely PaxTV.

Congress forbade the Big Four from acquiring each other as well as Viacom's UPN or Time Warner's WB in order to preserve programming diversity created by the upstart weblets. But Viacom, which bought CBS last year, argued that UPN would go out of business if a divestiture was forced because no company would want to absorb its losses.

Without the latest change, Viacom would have been forced to shed UPN by May 4. The rule change was endorsed by FCC Chairman Michael Powell and Commissioners Susan Ness and Harold Furchtgott-Roth.

Commissioner Gloria Tristani, a foe of media consolidation, complained there were other ways to preserve UPN. "Wholesale abandonment of well-settled rules is not the way to save a struggling network," she said. Instead she said Viacom should have been forced to seek a permanent waiver to the rule, which would have forced the company to turn over financial documents proving UPN's precarious condition and allowed the FCC extract conditions from the company.

Relaxation of the rule won support of the Rainbow Coalition, but a smaller minority group opposed the change. The Black Entertainment & Telecommunications Association noted that Viacom has already cut its commitment to African-American audiences by canceling "City of Angels," a hospital drama featuring a largely minority cast, and firing talk show host Travis Smiley soon after acquiring Black Entertainment Television. "Reduced competition spells reduced quality black programming as well as reduce opportunities for black producers, directors, writers, actors, and other media professionals," said Talib Karim, BETA president. - Bill McConnell

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