May 26, 2000

In the Matter of 1998 Biennial Regulatory Review-Review of the Commission's Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996-MM Docket No. 98-35

I dissent from the majority's conclusion that the dual network rule should be modified to permit ABC, CBS, Fox, or NBC to combine with UPN or WB. Such a modification is unsupported by the record and, if ultimately adopted, would further erode the already tenuous level of diversity available on the public airwaves.

Congress itself modified the dual network rule only four years ago, as part of the Telecommunications Act of 1996. In describing the networks covered by its amended rule, Congress expressly referred to "emerging networks (WBTN, UPN)," a fact recently relied on by the Commission in applying the rule to UPN in connection with the CBS- Viacom merger.¹ Thus, in 1996, Congress found that the state of competition warranted continued application of the dual network rule to UPN and WB. Admittedly, the Commission may change the rule adopted by Congress pursuant to the biennial review provisions of the 1996 Act. But nothing has occurred in the past four years that should lead us to question Congress' judgment.

To the contrary, all of the arguments advanced by the majority as justifying modification of the rule were as true, if not more true, in 1996 than they are today. First, the majority asserts that program production and networking are complementary inputs that make vertical integration desirable, and that a merger of one of the top four networks with UPN or WB could be characterized as a merger of an established broadcast network with an established program producer. Leaving aside the factual inaccuracies of this argument (e.g., ABC and Fox are affiliated with major production studios just like UPN and WB), this characterization was equally true in 1996. Second, the majority argues that the rule should be retained for the top four networks but repealed for UPN and WB because the former are "established" broadcast networks, while the latter are still "nascent." Again, however, even assuming that UPN and WB are still "nascent" networks, they were far more nascent in 1996, when Congress specifically decided that they should fall within the dual network rule's application.

It is not hard to anticipate the effect that modification of the rule will have. It will reduce diversity on the public airwaves by reducing the number of outlets available to independent program producers. Independent programmers are already having a difficult time gaining network carriage. For the new television season, a record 24 of 37 new series are either owned or co-owned by the television networks which will air them.² Disney will own or co-own an interest in 3 out of 4 of ABC's new programs; CBS owns an interest in 6 of 7 new shows; NBC owns an interest in 4 of 7 new shows; 20th Century Fox will own or co-own 5 of Fox's 9 new shows; Paramount will produce 2 of UPN's 4 new series; Warner Brothers will own or co-own 4 of 6 new shows for WB.³ Far from demonstrating that the rule has outlived its usefulness, the marketplace shows that the rule may be needed more today than ever.

The Order emphasizes the economic efficiencies that would accrue to incumbent networks by modifying the rule. This I do not doubt. But we have a higher duty than helping broadcasters maximize their private gain. Our first duty is to manage the airwaves in a manner that promotes the public's interest in competition and diversity. In the absence of evidence that more than four independent networks are not economically feasible, we should be cautious about changing our priorities.