Footnote 1 Second Report and Order in MM Docket No. 90-162, 8 FCC Rcd 3282, recon. granted in part, Memorandum Opinion and Order in MM Docket No. 90-162, 8 FCC Rcd 8270 (1993), aff'd sub nom. Capital Cities/ABC, Inc. v. FCC, 29 F.3d 309 (7th Cir. 1994).
Footnote 2 See Network Television Broadcasting, 23 FCC 2d 382, 400 (1970), aff'd sub nom. Mt. Mansfield Television v. FCC, 442 F.2d 470 (2d Cir. 1971).
Footnote 3 Notice of Proposed Rule Making in MM Docket No. 90-162, 5 FCC Rcd 1815 (1990). In 1983, the Commission had tentatively concluded that it should repeal the financial interest rules and retain modified syndication restrictions, and to sunset any remaining constraints by 1990. Tentative Decision and Request for Further Comments in BC Docket No. 82-345, 94 FCC 2d 1019 (1983). Seven years later, this docket was terminated with no further action being taken on the Commission's tentative conclusions; instead, a new proceeding -- MM Docket No. 90-162 -- was commenced to examine whether the fin/syn rules continued to be necessary.
Footnote 4 Report and Order in MM Docket No. 90-162, 6 FCC Rcd 3094, as modified, Memorandum Opinion and Order, 7 FCC Rcd 345 (1991).
Footnote 5 Schurz Communications, Inc. v. FCC, 982 F.2d 1043 (7th Cir. 1992).
Footnote 6 The Commission's Second R&O, 8 FCC Rcd 3282 (1993), modified in a few minor respects on reconsideration, Memorandum Opinion and Order in MM Docket No. 90-162, 8 FCC Rcd 8270 (1993) ("MO&O"), was upheld on appeal by the Seventh Circuit. Capital Cities/ABC, Inc. v. FCC, 29 F.3d 309 (7th Cir. 1994).
Footnote 7 These conditions included the decline in network audience share since the fin/syn rules were adopted, the increasing demand for television programming created by the emergence of the Fox network and cable networks and the growth of independent television stations, the intense competition among the three established networks for programming, the increasing ability of first-run distribution to be a fully comparable alternative to network distribution, and the increased concentration in the programming production industry. See Second R&O, 8 FCC Rcd at 3303-10.
Footnote 8 See 47 C.F.R. § 73.663 and Second R&O, 8 FCC Rcd 3282, recon. granted in part, MO&O, 8 FCC Rcd 8270. Under these consent decrees, ABC, CBS, and NBC were prohibited from acquiring financial interests or proprietary (distribution) rights in non-network uses of television programs by others, from engaging in the domestic syndication business, and from conditioning or tying the purchase of the network right to a program upon the supplier's grant of any other right or interest to the network. Second R&O, 8 FCC Rcd at 3339.
Footnote 9 United States v. National Broadcasting Company, 842 F.Supp. 402 (C.D. Cal. 1993).
Footnote 10 47 C.F.R. § 73.663. See also Second R&O, 8 FCC Rcd at 3337-42.
Footnote 11 Syndication is the industry term used to refer to the licensing of programs for exhibition to individual stations. We use the term "active" syndication to refer to the direct negotiation with individual stations for the exhibition of programs, and the term "passive" syndication to refer to the holding of syndication rights that do not bestow the right to negotiate directly with individual stations.
Footnote 12 Under these requirements, the networks must file semi-annual reports identifying all network prime time entertainment programs and first-run non-network programs in which they hold or acquire financial interests or syndication rights. In addition, the networks must provide various related information, such as details concerning the independent syndicators that market such programming, and lists of the domestic stations to which the networks themselves syndicate. These reports must be filed with the Commission and placed in the public file of each network owned and operated station before the first regular business day of September and March of each year. See 47 C.F.R. § 73.661.
Footnote 13 Under these safeguards, a network is required to release into syndication a program for which it held syndication rights four years after the program's debut or within 180 days following the end of the network run, whichever is sooner. 47 C.F.R. § 73.660(b).
Footnote 14 "In house" productions refer to co-production arrangements between a network and an outside domestic or foreign producer, as well as programming produced solely by a network.
Footnote 15 An "emerging network" is defined as an entity not meeting the definition of a "television network" as of June 5, 1993, but which subsequently meets this definition. 47 C.F.R. § 73.662(g). See also 47 C.F.R. § 73.662(f) (in general, defining "television network" as any entity providing on a regular basis more than fifteen hours of prime time programming per week to interconnected affiliates that reach, in aggregate, at least 75 percent of television households nationwide).
Footnote 16 47 C.F.R. § 73.663. See Second R&O, 8 FCC Rcd at 3337-42.
Footnote 18See Second R&O, 8 FCC Rcd at 3303-08, 3337-40; see also MO&O, 8 FCC Rcd at 8279-80.
Footnote 19 Capital Cities/ABC, Inc., 29 F.3d at 316.
Footnote 21See MO&O, 8 FCC Rcd at 8279. As the Seventh Circuit observed, the interim period has given "the independent producers an opportunity to form their own networks if they want to havedistribution systems that are wholly independent of the existing networks, their competitors, which with the expiration of the remaining restrictions will no longer be handicapped in competing with the independent producers." Capital Cities/ABC, Inc., 29 F.3d at 314. We note that two new networks have in fact recently been launched: the Warner Brothers Network ("WB"), owned by Warner Brothers, and the United Paramount Network ("UPN"), owned by Viacom-Paramount and Chris Craft/United. See David Tobenkin, "New Players Get Ready to Roll," Broadcasting & Cable, Jan. 2, 1995, at 30.
Footnote 22 MO&O, 8 FCC Rcd at 8279.
Footnote 23 Second R&O, 8 FCC Rcd at 3340-41.
Footnote 24 Notice of Proposed Rule Making in MM Docket No. 94-123, 9 FCC Rcd 6328 (1994).
Footnote 25 Capital Cities/ABC, Inc., 29 F.3d at 316.
Footnote 26 Second R&O, 8 FCC Rcd at 3340 (codified in 47 C.F.R. § 73.663). See also MO&O, 8 FCC Rcd at 8281 n.30 ("We intend to treat and address pleadings submitted by [proponents of the continuation of the fin/syn rules] similarly to a petition for rule making.").
Footnote 27 Capital Cities/ABC, Inc., 29 F.3d at 316.
Footnote 28 Indeed, we note that the Seventh Circuit observed: "[t]he television industry is changing so rapidly that we cannot exclude the possibility that the interim restrictions will come to seem irrational before they are due to expire. In that event, however, the parties would be free to ask the Commission to modify or abrogate the restrictions ahead of schedule." Capital Cities/ABC, Inc., 29 F.3d at 316.
Footnote 29 Until and unless we act on this acceleration proposal, our present timetable for the expiration of the fin/syn rules will remain in effect. Under that timetable, "[u]nless the Commission takes affirmative action to the contrary," the remaining fin/syn rules will expire on November 10, 1995. See 47 C.F.R. § 73.663.
Footnote 30 Second R&O, 8 FCC Rcd at 3302.