[Federal Register Volume 60, Number 183 (Thursday, September 21, 1995)]
[Rules and Regulations]
[Pages 48907-48912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23366]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 95-39; FCC 95-382]
Network Financial Interest and Syndication Rules
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Commission repealed significant portions of its financial
interest and syndication (``fin/syn'') rules, scheduled the remaining
rules for expiration, and committed itself to conducting a proceeding
six months prior to the scheduled expiration date. On April 5, 1995,
the Commission adopted a Notice of Proposed Rule Making initiating the
instant review of these rules. It also sought comment in the Notice of
Proposed Rule Making on whether to accelerate the expiration date for
the remaining rules in the event it determined that no basis had been
shown for retaining them. Having
[[Page 48908]]
considered the record before it, the Commission finds that those
parties favoring retention of the remaining fin/syn rules have failed
to meet their burden of proof, and that continuation of the rules
therefore is not justified. The intended effect of this action is to
eliminate the fin/syn rules in their entirety without delay.
EFFECTIVE DATES: Sections 73.659, 73.660, 73.661, and 73.663 are
removed effective September 21, 1995. Section 73.662 is amended
effective September 21, 1995, and removed effective August 30, 1996.
FOR FURTHER INFORMATION CONTACT:
Robert Kieschnick, (202) 739-0770, or David E. Horowitz, (202) 776-
1653, Mass Media Bureau, Policy and Rules Division.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Report and Order in MM Docket No. 95-39, FCC 95-382, adopted August 29,
1995, and released September 6, 1995. The complete text of this
document is available for inspection and copying during normal business
hours in the FCC Reference Center (room 239), 1919 M Street NW.,
Washington, DC 20554, and may be purchased from the Commission's copy
contractor, International Transcription Service (202) 857-3800, 2100 M
Street NW., Washington, DC 20037.
Synopsis of the Report and Order
1. The fin/syn rules, which were adopted in 1970 to limit network
control over television programming and thereby foster diversity of
programming through the development of diverse and antagonistic
programming sources, restricted the ability of the three established
networks (ABC, CBS, and NBC) to own and syndicate television
programming. As stated above, we initiated the instant proceeding
pursuant to our Second R&O in MM Docket No. 90-162, in which we
determined that, given competitive conditions in the television
programming marketplace, the fin/syn rules should be repealed in their
entirety. While we concluded in the Second R&O that market conditions
did not justify retention of the fin/syn restrictions, we also
determined that several critical non-market factors warranted a
staggered repeal rather than immediate elimination of all of the rules.
First, we developed a scheme to allow us to observe the operation of a
partially deregulated market for a period of time to see whether our
assessment that the networks would not act in ways detrimental to
diversity and competition following deregulation was valid. Second, a
gradual phase-out of our restrictions on active syndication in
particular appeared warranted because we considered that lifting the
restraints on such syndication posed a more significant risk of damage
to outlet diversity than that posed by lifting the other restraints, in
the event our conclusions about the reactions of the marketplace proved
wrong. Finally, we recognized that immediate elimination of all the
rules could be disruptive and have unintended and unforeseen negative
effects.
2. The rules that we retained, and which we consider here, relate
to active syndication on the part of the networks, their involvement in
the first-run non-network market, warehousing of programs, and
reporting requirements. Under these rules, the networks have been
prohibited from actively syndicating prime time entertainment network
programming or first-run non-network programs to television stations
within the United States. Any such program for which a network holds a
passive syndication right must have been syndicated domestically
through an independent syndicator. Further, networks have been
prohibited from holding or acquiring a continuing financial interest or
syndication right in any first-run, non-network program distributed in
the United States unless the network had solely produced that program.
The anti-warehousing safeguards we adopted were designed to prevent a
network from withholding prime time programs from the syndication
market for an unreasonable period of time. Finally, sem-annual
reporting requirements were imposed on the networks.
3. Both the Second R&O and the Notice were explicit that parties
who oppose the scheduled expiration of the remaining fin/syn
restrictions would bear the burden of proof in this proceeding. In the
Notice, we further explained that commenters opposing the expiration of
the rules would ``need to convince us that, based on the current status
of the program production and distribution markets and the activities
of the networks since 1993, the Commission should continue regulation
in this area. Parties arguing for retention of fin/syn restrictions
should support their positions with empirical data and economic
analysis.'' Notice at para. 12. Thus, because we determined that, as of
1993, market conditions did not justify retention of the fin/syn rules,
we made clear that those favoring retention of the rules would have to
present evidence of the networks' behavior and the status of program
production and distribution markets since that time.
4. In both the Second R&O and the Notice, we also set forth a list
of fourteen factors that we deemed relevant to our review of the
remaining rules. See Second R&O at para. 118; Notice at para. 12.
5. We find that commenters favoring retention of the remaining fin/
syn rules have failed to carry their burden of demonstrating that,
based on empirical data and economic analysis of the television program
production and distribution markets and network activities since 1993,
the rules are necessary to ensure competitive market conditions or
source and outlet diversity.
6. Certain arguments made by these commenters suggest that the
Commission must prove that repeal of the rules is justified. The
Association of Independent Television Stations, Inc. (``INTV''), for
example, argues that there is no rational basis for sunsetting the
rules, that the FCC has found that the networks have the incentive and
ability to deprive independent stations of access to syndicated
programming, and that the Commission must make contrary findings based
on substantial evidence in order to sunset the rules. We disagree.
Based on a thorough review of extensive record evidence, the Commission
concluded in the Second R&O that the development of competitive
conditions in program production and distribution markets and the
decline of network dominance warranted the total repeal of the rules.
This decision was affirmed by the Seventh Circuit. Capital Cities/ABC,
Inc. v. FCC, 29 F.3d 309 (7th Cir. 1994). Moreover, the Court warned
the FCC that only a compelling reason could justify retention of the
rules after their scheduled expiration. Id. at 316. Thus, absent such a
compelling showing on the part of those seeking to retain the rules,
there are no grounds for suggesting, as INTV does, that the Commission
must reexamine its conclusions regarding the lack of need for fin/syn
regulation.
7. The Coalition to Preserve the Financial Interest and Syndication
Rule (``Coalition'') acknowledges in its reply comments that it must
carry the burden of proof. Nonetheless, its discussion at times
suggests that the burden of proof has shifted to those favoring
expiration of the rules, i.e., the networks. Thus, the Coalition
asserts that the networks have failed to show that certain arguments
submitted and findings made in proceedings conducted prior to 1993 are
no longer valid. However, absent a showing based on post-1993 evidence
that such earlier arguments and findings
[[Page 48909]]
are valid now, the networks are not required to disprove them.
8. Proponents of retention of the rules also argue that repeal of
the rules will yield no benefits. The Coalition, for example, states
that the purpose of the instant proceeding is to test the Commission's
1993 predictions regarding the beneficial effects of repealing the
rules, and argues that, since 1993, our relaxation of the rules has not
resulted in predicted public welfare benefits. Similarly, King World
Productions, Inc. (``King World''), which focuses its comments on
first-run syndicated programming, argues that allowing the networks to
syndicate first-run programming would produce no public benefit and a
probability of harm to source diversity.
9. The purpose of this proceeding, however, is not to determine
whether any particular benefits have been realized as a result of the
partial elimination of our fin/syn rules. Rather, we provided for the
instant review of our remaining rules because we wanted to be certain
that their removal would not cause harm. Among our concerns was the
possibility that we may have erred in predicting that the networks
would not be able to abuse their position if we removed all
restrictions on syndication. However, we have already concluded, and
the Seventh Circuit has agreed, that the syndication rules are no
longer justified by the conditions of the program distribution market,
and we are concerned here only with preventing any harm that could
result if we were wrong. We anticipate that the repeal of our fin/syn
rules will have benefits over time, but our focus here is on whether or
not there is evidence that repeal will threaten diversity in the
program production and distribution markets.
10. Generally speaking, many of the pro-fin/syn arguments presented
in this proceeding are unconvincing because they rely on conclusions
reached by the Commission or others prior to 1993, or on analysis of
network behavior before that time. Proponents of retaining the rules
also rely in part on arguments that were rejected in the Second R&O.
Our Notice stated that commenters opposing the scheduled expiration of
our rules would need to present information about and analysis of
network activities and the operation of program markets since 1993.
Thus, arguments based on earlier analyses or data are irrelevant to the
instant review (unless the data are used as a comparative benchmark),
as are arguments rejected in our Second R&O.
11. We turn now to an examination of the arguments made in this
proceeding that provide data and/or economic analysis relevant to the
period from 1993 to the present. In the discussion set forth below, we
consider these arguments as they relate to the fourteen factors set
forth in the Second R&O and the Notice.
12. The extent to which a network-owned program is syndicated
primarily to that network's affiliates. The only relevant data on this
issue were submitted by those favoring elimination of the remaining
fin/syn rules. Thus, for example, the National Broadcasting Company,
Inc. (``NBC'') provides figures for its single in-house production that
has been in active first-run syndication by a third-party syndicator
since 1993, a series entitled ``News 4 Kids.'' As of May 1995, this
program was being carried on 210 stations, of which only 49--or 23%--
are either owned by or affiliated with NBC. In contrast, the proponents
of retention of the rules did not provide evidence showing that
network-owned programs are syndicated primarily to network-owned or -
affiliated stations. King World states in its comments that NBC
launched a weekly series entitled ``Memories Then and Now'' which, in
its initial season, was carried on 44 stations, 31 of which were either
owned by or affiliated with NBC. According to King World, this program
illustrates how the networks exploit their affiliates to exercise power
over the distribution system. However, the figures King World cites are
for February 1992, a period of time that is not relevant to this
proceeding except insofar as it is used to place post-1993 network
behavior into context. Moreover, even if we consider these figures as
relevant here, we note that NBC points out that ``Memories Then and
Now'' was syndicated by an independent distributor, and that King World
does not claim that NBC had any influence over the syndicator's sales
practices. According to NBC, the fact that the program was a failure in
syndication shows that NBC does not have the power over the
distribution system that King World claims. If it had such power, NBC
states, it would have been able to force sufficient clearances to make
the show a success. ABC also points out that the clearance of a program
by only 31 NBC affiliates does not show that the networks have used
their affiliates to exercise undue control over the distribution
system. Finally, we observe that no evidence was presented showing that
Fox Broadcasting Company (``Fox''), which is permitted under our rules
to engage in active syndication, has favored its affiliates in
syndicating Fox programming. We find that evaluation of fin/syn repeal
under this factor fails to support a conclusion that the networks favor
affiliates in syndicating their programs.
13. The percentage of network programming in which a network has
obtained a financial interest or syndication right. According to the
Coalition, the established networks have taken financial interests,
through either co-productions or in-house productions, ``in
approximately 40 percent of new shows picked up since the Commission
eliminated the financial interest rule in 1993.'' Coalition Comments at
17. The Coalition asserts that this figure is evidence of the exercise
of the established networks' market power in the purchase of
programming. However, the Coalition does not explain how it arrived at
this figure. Moreover, as both Capital Cities/ABC, Inc. (``ABC'') and
NBC point out, the Coalition's figure, even if valid, merely shows that
the established networks have not had a financial interest in the
majority of new shows picked up since the Commission eliminated the
financial interest rule, a circumstance that is inconsistent with the
contention that the networks have exercised undue market power. In sum,
no evidence has been presented that demonstrates that the established
networks have exercised undue market power in acquiring a financial
interest in prime time entertainment programming.
14. Further, no party has presented any evidence indicating that
the established networks have allowed their financial interests in or
syndication rights to programming aired during prime time to influence
their decisions to either retain or cancel that programming. Under our
current rules, the established networks may have both a financial
interest in and syndication rights to programming produced in-house.
NBC states that every network in-house program that premiered in the
fall of 1994 was canceled by its respective network by the end of the
broadcast season, and asserts that this fact refutes any suggestion
that the networks accord favored treatment to their in-house
productions. We find that proponents of retaining the remaining fin/syn
restrictions have not demonstrated network favoritism toward
programming in which they have a financial interest, or to which they
have syndication rights, in any way that would adversely affect
diversity within the program production market.
15. The relative change in the number of independent producers
creating and selling television shows to the networks. In its reply
comments, the Coalition suggests that data from a study
[[Page 48910]]
submitted by Economists Incorporated in comments filed in MM Docket No.
94-123, the Prime Time Access Rule (``PTAR'') proceeding, demonstrate
that ``source diversity has declined dramatically since the financial
interest rule was repealed.'' Coalition Reply Comments at 25.
Specifically, the Coalition relies on Appendix E of the study to show
that there has been a reduction in the number of suppliers of prime
time entertainment series since the 1993-94 season. This appendix lists
the packagers of programming included in the prime time schedules of
ABC, NBC, and CBS Inc. (``CBS'') from the 1969-70 season to the 1994-95
season and the percentage of prime time network programming supplied by
these packagers. Figures for the 1995-96 season are projected based on
one week of the announced fall line-up on the three networks.
Economists Incorporated defines ``packager'' for purposes of this
calculation as the entity that assumed contractual responsibility to a
network for production or delivery of a series.
16. While we agree with the Coalition that the Economists
Incorporated study indicates a decline in the number of packagers of
programming included in the prime time schedules of ABC, NBC, and CBS
from 29 in 1993-94 to 17 in the fall of 1995, we do not agree that
these figures necessarily demonstrate a reduction in source diversity
due to either the relaxation of our fin/syn rules or anticompetitive
behavior on the part of the three networks. We note that Appendix E
also shows that the number of packagers declined from 31 to 26 from
1990-91 to 1991-92, which was prior to the relaxation of our rules. We
believe that this decline, which cannot be attributed to elimination of
the financial interest rule, is instead attributable to the inherent
riskiness of prime time programming, which may also explain the change
in the number of packagers on which the Coalition comments. In
addition, we observe that the identity of the packagers listed in
Appendix E varies from year to year. This suggest that the list for any
given year does not represent all program suppliers selling to the
networks, nor can the variations in the lists be used to support a
finding that suppliers are being excluded from the market. We also
observe that Warner Brothers, which is developing a new broadcast
television network to compete with ABC, CBS, and NBC, is providing
23.33% of the prime time entertainment schedule of the three major
networks for the fall of 1995. This figure tends to discount any claim
that ABC, CBS, and NBC are trying to restrict the supply of programming
provided by competitors. In short, the information cited by the
Coalition does not demonstrate that relaxation of our fin/syn rules has
led to any reduction in the number of independent producers actively
competing to create and sell television shows to the networks. Finally,
to the extent that there has been any decline in the number of
suppliers of prime time programming, it may be due at least in part, as
CBS claims, to the major studios supplying an increased percentage of
prime time programming.
17. Concentration of ownership in the program production industry.
In connection with this factor, commenters favoring retention of the
fin/syn rules focused on levels of network ownership of prime time
entertainment programming. The Coalition asserts that the networks'
share of copyrights in such programming has increased from 29% to 35%
since repeal of the financial interest rule but does not provide
documentation for these figures. INTV contends that the percentage of
prime time entertainment series produced in-house by the networks
increased from less than 1% in 1984-85 to 7.6% in the 1993-94 season.
(We note that Economists Incorporated, upon which INTV relies, has
revised its figures of 7.6% for 1993-94 to 6.3%.) However, neither the
Coalition nor INTV establishes a clear trend toward increased network
ownership of such programming that is attributable to the relaxation of
our fin/syn rules or that constitutes a cause for concern from a public
interest standpoint. Moreover, looking at the percentages of hours of
prime time entertainment series accounted for by in-house network
production since 1993, we observe that these percentages have
fluctuated from year to year. Accordingly to NBC, in-house productions
accounted for 20.2% of the established networks' prime time
entertainment series hours in 1992-93, 19.0% of these hours in 1993-94,
25.8% of these hours in 1994-95, and 22.2% of these hours in the Fall
1995 schedule. (We note that the wide difference between the figures
cited by INTV and those cited by NBC is due to the fact that INTV's
figures refer to the percentage of the number of prime time
entertainment series produced in-house, whereas NBC's figures document
the number of hours of such programming.) Thus, we cannot say, based on
the showings made in this proceeding, that the networks have acted to
preclude the prime time programs of other producers from reaching the
market, or that program production has been concentrated in the hands
of the networks as a result of the relaxation of the fin/syn rules to
the detriment of the viewing public. Indeed, the fact that
independently owned ``packagers'' provided 80.97% of the prime time
programming hours included in the schedules of ABC, CBS, and NBC during
the 1993-94 season, provided 74.2% of these hours during the 1994-95
season, and are scheduled to provide 77.7% of these hours in the
upcoming 1995-96 season clearly demonstrates that the three established
networks are not precluding independent product from their schedules
and thereby concentrating ownership of prime time programming in their
hands.
18. Audience shares of first-run syndicated programming carried by
non-network affiliated stations during prime time. According to INTV,
expiration of the fin/syn rules will limit the ability of independent
stations to acquire first-run prime time syndicated programs. INTV
states that first-run programming accounts for only 39% of the prime
time programming of independent stations, and that this programming
``rarely achieves'' ratings comparable to the ratings of programming
shown on the networks. However, the Economists Incorporated data cited
by INTV reflect only programming aired in the top 50 markets in
November 1994, and do not include ratings information. Thus, the data
cited do not support INTV's claims. ABC notes that first-run
productions such as ``Star Trek/Deep Space Nine,'' ``Kung Fu,'' and
``The Legendary Journeys of Hercules'' have been syndicated
successfully in prime time without reliance on the networks'
affiliates. In sum, it has not been shown that competitive first-run
prime time programming is unavailable to independent stations, nor has
it been demonstrated that the repeal of our remaining fin/syn
restrictions would diminish the amount of first-run programming
available to independent stations or otherwise be detrimental to the
diversity of programs and program sources.
19. The overall business practices of emerging networks, such as
Fox, in the network television and syndication business. Although it
does not directly discuss its business practices, Fox provides
information in its reply comments about its production of prime time
programming. Fox states that it currently produces only 3\1/2\ of its
own 15 hours of prime time network programming, and that it produces a
substantial amount of programming for other networks, including
``Chicago Hope'' and ``Picket Fences'' for CBS.
[[Page 48911]]
Fox offers itself as a ``perfect laboratory model'' of a broadcast
network that has not been subject to regulatory constraints as a
producer. We believe that the fact that most of the prime time
programming aired on the Fox network is produced by outside suppliers
is evidence that permitting a network to own and syndicate programming
does not result in foreclosing independent suppliers from the market.
20. Network negotiating patterns, particularly the manner in which
networks obtain financial interests and syndication rights and the
extent to which successful negotiations over back-end rights influence
network buying decisions. While not directly addressing this issue, the
Coalition does assert that the established networks have uniformly
lowered the license fees they pay for prime time entertainment
programming. However, the Coalition cites figures without providing any
documentation. Moreover, as NBC points out, the Coalition does not
indicate in citing its figures what type of programming is involved or
the track record of the producer. As a result, we cannot assess the
significance of the Coalition's numbers. We note, too, that CBS cites
independent industry analysts as reporting that the average license
fees paid by the three major networks, as estimated on a per-hour
basis, remained virtually unchanged from the 1992-93 season through the
1994-95 season. Thus, we find that proponents of retaining the fin/syn
rules have provided no probative evidence that the established networks
have exercised undue market power since 1993 in their negotiations for
financial interests and syndication rights in television programming.
21. Mergers or acquisitions involving networks, studios, cable
systems and other program providers since our 1993 fin/syn decision
took place. CBS cites a number of mergers that have occurred since 1993
that have resulted in the formation of large new competitors in the
video production and distribution markets. Among these are the merger
of Viacom Inc., Blockbuster Entertainment Corp., and Paramount
Communications, Inc., which has resulted in a company with both
production and distribution capabilities. To the extent that such
mergers have strengthened the production and distribution capabilities
of the merging parties, the three original networks are facing more
effective competitors in the video production and distribution markets.
We note as well the recent announcements that the Walt Disney Company
plans to acquire ABC and that Westinghouse Electric Corp. plans to
purchase CBS. The Commission will, or course, be reviewing these
acquisitions in the normal course of its regulatory business to ensure
that they do not undermine the competiveness of the production and
distribution markets.
22. The growth of additional networks, including the development of
Fox and its position vis-a-vis the three major networks. In their
comments, NBC, CBS, and ABC point to the growing audience share of Fox,
and to their own declining audience share, as evidence of the
competition Fox provides to the established broadcast networks. CBS
notes that the aggregate prime time viewing share of the three original
networks, which had already fallen to 59% in 1992, dropped further to
57% in the 1993-94 season. NBC, CBS, and ABC also point to the
emergence of the United Paramount and Warner Brothers networks as
evidence of both the forward integration of existing television
programming producers into the distribution of programming through
broadcast television outlets and the increased number of potential
purchasers of television programming. INTV argues that these new
networks cannot compete effectively with the established networks
because of the structural advantages enjoyed by the latter--primarily
the number of VHF stations owned by or affiliated with the established
networks. INTV also suggests that the two newest networks have not had
a significant competitive impact because they supply only 2 to 4 hours
of weeknight prime time programming. We have, however, already decided
in our Second R&O that any structural advantages of the established
networks are no longer sufficient to allow them to dominate the program
production and distribution markets. Moreover, Fox has competed
effectively for a number of VHF affiliates and initiated a series of
affiliate switches, which have resulted in some of the established
networks having fewer, rather than more, VHF affiliates than they did
in 1993. Thus, any structural advantage that the established networks
may have had based on ownership of an affiliation with VHF stations has
been diminished rather than increased since our Second R&O. Even if the
impact of the United Paramount and Warner Brothers networks is
currently relatively small, they nonetheless appear to be viable new
competitors for the established networks and may increase their market
share as Fox has done. Given Fox's growth in audience share, as
documented by Economists Incorporated in our PTAR proceeding, and the
emergence of two additional broadcast networks, we find that the
established broadcast television networks have faced more, rather than
less, competition from broadcast television purchasers and distributors
since 1993. In keeping with this finding, we disagree with King World's
claim that the established networks have bottleneck power over the
broadcast television distribution system.
23. The growth in the number and types of alternative outlets for
sale of programming (e.g. the development of the Direct Broadcast
Satellite (``DBS'') service; cable penetration; wireless cable
development). We determined in our Second R&O that cable networks were
competitors to the established broadcast television networks in the
purchase of television programming. CBS and ABC point out in this
proceeding that there has been continued growth in the number and
audience share of not only cable networks but also other networks using
alternative distribution technologies (e.g., DBS, wireless cable), and
they cite data provided in Economists Incorporated's PTAR comments that
demonstrate the increased market share of cable networks. The Coalition
argues that cable and other services are not effective competitors to
broadcast television, and that cable and other non-broadcast networks
therefore are not effective competitors to broadcast networks. However,
we have already decided in our Second R&O that these alternative video
delivery systems provide sufficient competition with the broadcast
networks to obviate the need for fin/syn restrictions and, absent
evidence of new developments, this conclusion need not be revisited.
Moreover, based on the evidence in the record before us, we find that
the established broadcast television networks have faced more, rather
than less, competition for the acquisition of television programming
from non-broadcast television purchasers since 1993.
24. Proponents of retaining our remaining fin/syn rules have failed
to carry their burden of proof that earlier relaxation of these rules
has threatened diversity in the television program production and
distribution markets, or enabled the established networks to engage in
anticompetitive activities to the detriment of the public interest; or
that the current conditions of the production and distribution markets
warrant retention of the rules. Proponents of retaining the rules have
not provided persuasive evidence that the established networks engage
in, or
[[Page 48912]]
threaten to engage in, affiliate favoritism to the detriment of non-
network stations; that the established networks place or retain
programming in their schedules because of their financial interests in
or syndication rights to that programming, or for other than legitimate
competitive reasons; or that the established networks have reduced the
pool of suppliers of television programming through anticompetitive
practices.
25. In addition, proponents of retaining the remaining fin/syn
rules have provided no evidence unrelated to our fourteen factors that
would cause us to question whether the conclusions we reached in 1993
remain valid today. Nor have they shown that the semi-annual reports
submitted by the networks reveal ownership patterns that pose a threat
to programming diversity. Moreover, there is persuasive evidence that
the established broadcast television networks have faced increased
competition for the acquisition of television programming from
broadcast and non-broadcast television distributors since 1993, and
there is evidence which suggests that the market power of the
established networks, as determined by their prime time audience share,
has decreased since 1993. We therefore decline to alter our 1993
decision to sunset the remaining fin/syn rules. In light of the fact
that the commenters have not shown a need to retrain these rules, we
also conclude that there is no justification for strengthening any of
the rules, as the Coalition urges.
26. Finally, we note that both the Coalition and INTV urge us to
retain, and indeed strengthen, our reporting requirements for the
networks even if we allow the rest of the fin/syn rules to expire.
These parties argue that it is important for the Commission to monitor
the network's conduct following repeal of the remaining rules in order
to assess the impact of such repeal. However, neither of these
commenters has demonstrated the need to continue reporting
requirements, and we decline to do so.
27. In our Notice, we sought comment on whether, in the event
proponents of retention of the fin/syn rules failed to meet their
burden of proving that retaining the rules is warranted, we should
amend our rules to allow for an expiration date earlier than November
10, 1995. Commenters in this proceeding have failed to demonstrate that
market conditions and networks behavior since 1993 justify retraining
the rules. In addition, no evidence or argument has been submitted
showing that repeal of the remaining rules before November 10, 1995,
would disrupt the conduct of business by parties relying on the rules,
although we sought comment on this point. We also note, as discussed
above, that the networks now face more competition than in 1993 for the
acquisition of television programming from broadcast and non-broadcast
television distributors. Moreover, we have described at length the
negative effects of the fin/syn rules on production and distribution
markets in our earlier decisions. Under these circumstances, we
conclude that no public interest purpose would be served by allowing
the rules to remain in effect until November 10, 1995. We thus conclude
that all of the remaining fin/syn rules will be repealed immediately
upon publication of this Order in the Federal Register.
Final Regulatory Flexibility Analysis
28. Pursuant to the Regulatory Flexibility Act of 1980, the
Commission has set forth the following Final Regulatory Flexibility
Analysis. The Secretary shall send a copy of this Report and Order,
including the Final Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration in accordance
with the Regulatory Flexibility Act, 4 U.S.C. Sec. 601 et seq.
29. Need for and Purpose of this Action: This action is taken to
accelerate the expiration of the Commission's remaining fin/syn rules--
previously scheduled for November 10, 1995--so that the rules will
expire upon publication of this Order in the Federal Register.
30. Summary of Issues Raised by the Public Comments in Response to
the Initial Regulatory Flexibility Analysis: None.
31. Significant Alternatives Considered and Rejected: The
Commission considered retaining the remaining fin/syn rules. However,
after reviewing the comments submitted in this proceeding, the
Commission concluded that the proponents of retaining the rules had not
met their burden of proving that the rules are still needed to achieve
the FCC's goals of source and outlet diversity in the television
programming marketplace. One commenter in this proceeding argued that
the fin/syn rules should be strengthened. The Commission considered
this argument but concluded that it was without merit in light of the
fact that no need for retaining the rules at all had been demonstrated.
The Commission also considered leaving the remaining fin/syn rules in
place until their previously scheduled expiration date of November 10,
1995, but concluded that no evidence had been presented showing that
earlier repeal would disrupt the conduct of business by parties relying
on the rules. Given the increased competition facing the networks and
the negative effects of the fin/syn rules on production and
distribution markets, the Commission concluded that no public interest
purpose would be served by waiting until November 10, 1995, to sunset
the rules.
Ordering Clauses
32. Accordingly, It Is Ordered that pursuant to the authority
contained in Sections 4(i), 4(j), 301, 303(i), 303(r), 313 and 314 of
the Communications Act of 1934, as amended, 47 U.S.C. Secs. 154(i),
154(j), 301, 303(i), 303(r), 313 and 314, Sections 73.659 through
73.663 of Part 73 of the Commission's Rules, 47 CFR Part 73, Are
Amended as set forth below, effective upon publication of this Order in
the Federal Register.
33. In keeping with our recent decision in our PTAR proceeding, It
Is Further Ordered that section 73.662 of Part 73 of the Commission's
Rules, 47 CFR Part 73, Is Further Amended as set forth below, effective
August 30, 1996.
34. It Is Further Ordered that MM Docket No. 95-39 Is Terminated.
List of Subjects in 47 CFR Part 73
Radio broadcasting.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Part 73 of title 47 of the Code of Federal Regulations is amended
as follows:
PART 73--RADIO BROADCAST SERVICES
1. The authority citation for part 73 continues to read as follows:
Authority: 47 U.S.C. 154, 303, 334.
2. Sections 73.659 through 73.661, and 73.663, are removed and
reserved.
3. Sections 73.662 is amended by revising the heading and
introductory text to read as follows:
73.662 Definitions for television prime time access rules.
For purposes of Sec. 73.658(k):
* * * * *
4. Effective August 30, 1996, Sec. 73.662 is removed and reserved.
[FR Doc. 95-23366 Filed 9-20-95; 8:45 am]
BILLING CODE 6712-01-M
