Federal Register / Vol. 60, No. 183 / Thursday, September 21, 1995 / Rules and Regulations 48907

International table United States table FCC use designators Government Non-Government Region 1Ðalloca- Region 2Ðalloca- Region 3Ðalloca- Rule part(s) Special-use fre- tion GHz tion GHz tion GHz Allocation GHz Allocation GHz quencies

(1) (2) (3) (4) (5) (6) (7)

Space Research SPACE RE- Space Research SPACE RE- (passive) SEARCH (pas- (passive) SEARCH (pas- sive) sive) 871 871 871 US254 US255 US254 US255 US334 G117 US334 NG144

18.8±19.7 18.8±19.7 18.8±19.7 18.8±19.7 18.8±19.7 FIXED FIXED FIXED FIXED AUXILIARY BROADCAST- ING (74) FIXED-SATELLITE FIXED-SAT- FIXED-SAT- FIXED-SAT- CABLE TELE- (space-to-Earth) ELLITE (space- ELLITE (space- ELLITE (space- VISION RELAY to-Earth) to-Earth) to-Earth) (78) DOMESTIC PUB- LIC FIXED (21) MOBILE MOBILE MOBILE MOBILE PRIVATE OPER- ATIONAL- FIXED MICRO- WAVE (94) US334 G117 US334 NG144

19.7±20.1 19.7±20.1 19.7±20.1 19.7±20.1 19.7±20.1 FIXED-SATELLITE FIXED-SAT- FIXED-SAT- FIXED-SAT- (space-to-Earth) ELLITE (space- ELLITE (space- ELLITE (space- to-Earth) to-Earth) to-Earth) Mobile-Satellite MOBILE-SAT- Mobile-Satellite MOBILE-SAT- (space-to-Earth) ELLITE (space- (space-to- ELLITE (space- to-Earth) Earth). to-Earth) 873 873A 873B 873A 873B 873C 873C 873D 873D 873 873E 873 US334 G117 873E US334

20.1±20.2 20.1±20.2 20.1±20.2 20.1±20.2 20.1±20.2 FIXED-SATELLITE FIXED-SAT- FIXED-SAT- FIXED-SAT- (space-to-Earth) ELLITE (space- ELLITE (space- ELLITE (space- to-Earth) to-Earth) to-Earth) MOBILE-SAT- MOBILE-SAT- MOBILE-SAT- MOBILE-SAT- ELLITE (space- ELLITE (space- ELLITE (space- ELLITE (space- to-Earth) to-Earth) to-Earth) to-Earth) 873A 873B 873C 873D 873 873A 873B 873 873A 873B 873 873A 873B US334 G117 US334 873C 873D 873C 873D 873C 873D *******

United States (US) Footnotes GHz, 43.5–45.5 GHz and 50.4–51.4 GHz the ACTION: Final rule. * * * * * Government fixed-satellite and mobile- US334 In the band 17.8–20.2 GHz, satellite services are limited to military SUMMARY: The Commission repealed Government space stations and associated systems. significant portions of its financial earth stations in the fixed satellite (space-to- * * * * * interest and syndication (‘‘fin/syn’’) Earth) service may be authorized on a [FR Doc. 95–23168 Filed 9–20–95; 8:45 am] rules, scheduled the remaining rules for primary basis. For a Government BILLING CODE 6712±01±M expiration, and committed itself to geostationary satellite network to operate on conducting a proceeding six months a primary basis, the space station shall be located outside the arc measured from East prior to the scheduled expiration date. to West, 70°W to 120°W. Coordination 47 CFR Part 73 On April 5, 1995, the Commission between Government fixed-satellite systems adopted a Notice of Proposed Rule and non-Government systems operating in [MM Docket No. 95±39; FCC 95±382] Making initiating the instant review of accordance with the United States Table of these rules. It also sought comment in Frequency Allocations is required. Network Financial Interest and the Notice of Proposed Rule Making on Government (G) Footnotes Syndication Rules whether to accelerate the expiration * * * * * date for the remaining rules in the event G117 In the bands 7.25–7.75 GHz, 7.9–8.4 AGENCY: Federal Communications it determined that no basis had been GHz, 17.8–21.2 GHz, 30–31 GHz, 39.5–40.5 Commission. shown for retaining them. Having 48908 Federal Register / Vol. 60, No. 183 / Thursday, September 21, 1995 / Rules and Regulations considered the record before it, the Second, a gradual phase-out of our 4. In both the Second R&O and the Commission finds that those parties restrictions on active syndication in Notice, we also set forth a list of favoring retention of the remaining fin/ particular appeared warranted because fourteen factors that we deemed syn rules have failed to meet their we considered that lifting the restraints relevant to our review of the remaining burden of proof, and that continuation on such syndication posed a more rules. See Second R&O at para. 118; of the rules therefore is not justified. significant risk of damage to outlet Notice at para. 12. The intended effect of this action is to diversity than that posed by lifting the 5. We find that commenters favoring eliminate the fin/syn rules in their other restraints, in the event our retention of the remaining fin/syn rules entirety without delay. conclusions about the reactions of the have failed to carry their burden of EFFECTIVE DATES: Sections 73.659, marketplace proved wrong. Finally, we demonstrating that, based on empirical 73.660, 73.661, and 73.663 are removed recognized that immediate elimination data and economic analysis of the effective September 21, 1995. Section of all the rules could be disruptive and television program production and 73.662 is amended effective September have unintended and unforeseen distribution markets and network 21, 1995, and removed effective August negative effects. activities since 1993, the rules are 30, 1996. 2. The rules that we retained, and necessary to ensure competitive market which we consider here, relate to active FOR FURTHER INFORMATION CONTACT: conditions or source and outlet syndication on the part of the networks, Robert Kieschnick, (202) 739–0770, or diversity. their involvement in the first-run non- David E. Horowitz, (202) 776–1653, 6. Certain arguments made by these network market, warehousing of Mass Media Bureau, Policy and Rules commenters suggest that the programs, and reporting requirements. Division. Commission must prove that repeal of Under these rules, the networks have the rules is justified. The Association of SUPPLEMENTARY INFORMATION: This is a been prohibited from actively synopsis of the Commission’s Report Independent Television Stations, Inc. syndicating prime time entertainment (‘‘INTV’’), for example, argues that there and Order in MM Docket No. 95–39, network programming or first-run non- FCC 95–382, adopted August 29, 1995, is no rational basis for sunsetting the network programs to television stations rules, that the FCC has found that the and released September 6, 1995. The within the United States. Any such networks have the incentive and ability complete text of this document is program for which a network holds a to deprive independent stations of available for inspection and copying passive syndication right must have access to syndicated programming, and during normal business hours in the been syndicated domestically through that the Commission must make FCC Reference Center (room 239), 1919 an independent syndicator. Further, contrary findings based on substantial M Street NW., Washington, DC 20554, networks have been prohibited from evidence in order to sunset the rules. and may be purchased from the holding or acquiring a continuing We disagree. Based on a thorough Commission’s copy contractor, financial interest or syndication right in review of extensive record evidence, the International Transcription Service any first-run, non-network program Commission concluded in the Second (202) 857–3800, 2100 M Street NW., distributed in the United States unless Washington, DC 20037. the network had solely produced that R&O that the development of competitive conditions in program Synopsis of the Report and Order program. The anti-warehousing safeguards we adopted were designed to production and distribution markets 1. The fin/syn rules, which were prevent a network from withholding and the decline of network dominance adopted in 1970 to limit network prime time programs from the warranted the total repeal of the rules. control over television programming syndication market for an unreasonable This decision was affirmed by the and thereby foster diversity of period of time. Finally, sem-annual Seventh Circuit. Capital Cities/ABC, Inc. programming through the development reporting requirements were imposed v. FCC, 29 F.3d 309 (7th Cir. 1994). of diverse and antagonistic on the networks. Moreover, the Court warned the FCC programming sources, restricted the 3. Both the Second R&O and the that only a compelling reason could ability of the three established networks Notice were explicit that parties who justify retention of the rules after their (ABC, CBS, and NBC) to own and oppose the scheduled expiration of the scheduled expiration. Id. at 316. Thus, syndicate television programming. As remaining fin/syn restrictions would absent such a compelling showing on stated above, we initiated the instant bear the burden of proof in this the part of those seeking to retain the proceeding pursuant to our Second R&O proceeding. In the Notice, we further rules, there are no grounds for in MM Docket No. 90–162, in which we explained that commenters opposing suggesting, as INTV does, that the determined that, given competitive the expiration of the rules would ‘‘need Commission must reexamine its conditions in the television to convince us that, based on the current conclusions regarding the lack of need programming marketplace, the fin/syn status of the program production and for fin/syn regulation. rules should be repealed in their distribution markets and the activities of 7. The Coalition to Preserve the entirety. While we concluded in the the networks since 1993, the Financial Interest and Syndication Rule Second R&O that market conditions did Commission should continue regulation (‘‘Coalition’’) acknowledges in its reply not justify retention of the fin/syn in this area. Parties arguing for retention comments that it must carry the burden restrictions, we also determined that of fin/syn restrictions should support of proof. Nonetheless, its discussion at several critical non-market factors their positions with empirical data and times suggests that the burden of proof warranted a staggered repeal rather than economic analysis.’’ Notice at para. 12. has shifted to those favoring expiration immediate elimination of all of the Thus, because we determined that, as of of the rules, i.e., the networks. Thus, the rules. First, we developed a scheme to 1993, market conditions did not justify Coalition asserts that the networks have allow us to observe the operation of a retention of the fin/syn rules, we made failed to show that certain arguments partially deregulated market for a period clear that those favoring retention of the submitted and findings made in of time to see whether our assessment rules would have to present evidence of proceedings conducted prior to 1993 are that the networks would not act in ways the networks’ behavior and the status of no longer valid. However, absent a detrimental to diversity and competition program production and distribution showing based on post-1993 evidence following deregulation was valid. markets since that time. that such earlier arguments and findings Federal Register / Vol. 60, No. 183 / Thursday, September 21, 1995 / Rules and Regulations 48909 are valid now, the networks are not that provide data and/or economic that evaluation of fin/syn repeal under required to disprove them. analysis relevant to the period from this factor fails to support a conclusion 8. Proponents of retention of the rules 1993 to the present. In the discussion that the networks favor affiliates in also argue that repeal of the rules will set forth below, we consider these syndicating their programs. yield no benefits. The Coalition, for arguments as they relate to the fourteen 13. The percentage of network example, states that the purpose of the factors set forth in the Second R&O and programming in which a network has instant proceeding is to test the the Notice. obtained a financial interest or Commission’s 1993 predictions 12. The extent to which a network- syndication right. According to the regarding the beneficial effects of owned program is syndicated primarily Coalition, the established networks have repealing the rules, and argues that, to that network’s affiliates. The only taken financial interests, through either since 1993, our relaxation of the rules relevant data on this issue were co-productions or in-house productions, has not resulted in predicted public submitted by those favoring elimination ‘‘in approximately 40 percent of new welfare benefits. Similarly, King World of the remaining fin/syn rules. Thus, for shows picked up since the Commission Productions, Inc. (‘‘King World’’), which example, the National Broadcasting eliminated the financial interest rule in focuses its comments on first-run Company, Inc. (‘‘NBC’’) provides figures 1993.’’ Coalition Comments at 17. The syndicated programming, argues that for its single in-house production that Coalition asserts that this figure is allowing the networks to syndicate first- has been in active first-run syndication evidence of the exercise of the run programming would produce no by a third-party syndicator since 1993, established networks’ market power in the purchase of programming. However, public benefit and a probability of harm a series entitled ‘‘News 4 Kids.’’ As of to source diversity. the Coalition does not explain how it May 1995, this program was being 9. The purpose of this proceeding, arrived at this figure. Moreover, as both carried on 210 stations, of which only however, is not to determine whether Capital Cities/ABC, Inc. (‘‘ABC’’) and 49—or 23%—are either owned by or any particular benefits have been NBC point out, the Coalition’s figure, affiliated with NBC. In contrast, the realized as a result of the partial even if valid, merely shows that the proponents of retention of the rules did elimination of our fin/syn rules. Rather, established networks have not had a not provide evidence showing that we provided for the instant review of financial interest in the majority of new network-owned programs are our remaining rules because we wanted shows picked up since the Commission syndicated primarily to network-owned to be certain that their removal would eliminated the financial interest rule, a not cause harm. Among our concerns or -affiliated stations. King World states circumstance that is inconsistent with was the possibility that we may have in its comments that NBC launched a the contention that the networks have erred in predicting that the networks weekly series entitled ‘‘Memories Then exercised undue market power. In sum, would not be able to abuse their and Now’’ which, in its initial season, no evidence has been presented that position if we removed all restrictions was carried on 44 stations, 31 of which demonstrates that the established on syndication. However, we have were either owned by or affiliated with networks have exercised undue market already concluded, and the Seventh NBC. According to King World, this power in acquiring a financial interest Circuit has agreed, that the syndication program illustrates how the networks in prime time entertainment rules are no longer justified by the exploit their affiliates to exercise power programming. conditions of the program distribution over the distribution system. However, 14. Further, no party has presented market, and we are concerned here only the figures King World cites are for any evidence indicating that the with preventing any harm that could February 1992, a period of time that is established networks have allowed their result if we were wrong. We anticipate not relevant to this proceeding except financial interests in or syndication that the repeal of our fin/syn rules will insofar as it is used to place post-1993 rights to programming aired during have benefits over time, but our focus network behavior into context. prime time to influence their decisions here is on whether or not there is Moreover, even if we consider these to either retain or cancel that evidence that repeal will threaten figures as relevant here, we note that programming. Under our current rules, diversity in the program production and NBC points out that ‘‘Memories Then the established networks may have both distribution markets. and Now’’ was syndicated by an a financial interest in and syndication 10. Generally speaking, many of the independent distributor, and that King rights to programming produced in- pro-fin/syn arguments presented in this World does not claim that NBC had any house. NBC states that every network in- proceeding are unconvincing because influence over the syndicator’s sales house program that premiered in the fall they rely on conclusions reached by the practices. According to NBC, the fact of 1994 was canceled by its respective Commission or others prior to 1993, or that the program was a failure in network by the end of the broadcast on analysis of network behavior before syndication shows that NBC does not season, and asserts that this fact refutes that time. Proponents of retaining the have the power over the distribution any suggestion that the networks accord rules also rely in part on arguments that system that King World claims. If it had favored treatment to their in-house were rejected in the Second R&O. Our such power, NBC states, it would have productions. We find that proponents of Notice stated that commenters opposing been able to force sufficient clearances retaining the remaining fin/syn the scheduled expiration of our rules to make the show a success. ABC also restrictions have not demonstrated would need to present information points out that the clearance of a network favoritism toward programming about and analysis of network activities program by only 31 NBC affiliates does in which they have a financial interest, and the operation of program markets not show that the networks have used or to which they have syndication since 1993. Thus, arguments based on their affiliates to exercise undue control rights, in any way that would adversely earlier analyses or data are irrelevant to over the distribution system. Finally, we affect diversity within the program the instant review (unless the data are observe that no evidence was presented production market. used as a comparative benchmark), as showing that Fox Broadcasting 15. The relative change in the number are arguments rejected in our Second Company (‘‘Fox’’), which is permitted of independent producers creating and R&O. under our rules to engage in active selling television shows to the networks. 11. We turn now to an examination of syndication, has favored its affiliates in In its reply comments, the Coalition the arguments made in this proceeding syndicating Fox programming. We find suggests that data from a study 48910 Federal Register / Vol. 60, No. 183 / Thursday, September 21, 1995 / Rules and Regulations submitted by Economists Incorporated NBC are trying to restrict the supply of hands of the networks as a result of the in comments filed in MM Docket No. programming provided by competitors. relaxation of the fin/syn rules to the 94–123, the Prime Time Access Rule In short, the information cited by the detriment of the viewing public. Indeed, (‘‘PTAR’’) proceeding, demonstrate that Coalition does not demonstrate that the fact that independently owned ‘‘source diversity has declined relaxation of our fin/syn rules has led to ‘‘packagers’’ provided 80.97% of the dramatically since the financial interest any reduction in the number of prime time programming hours rule was repealed.’’ Coalition Reply independent producers actively included in the schedules of ABC, CBS, Comments at 25. Specifically, the competing to create and sell television and NBC during the 1993–94 season, Coalition relies on Appendix E of the shows to the networks. Finally, to the provided 74.2% of these hours during study to show that there has been a extent that there has been any decline the 1994–95 season, and are scheduled reduction in the number of suppliers of in the number of suppliers of prime to provide 77.7% of these hours in the prime time entertainment series since time programming, it may be due at upcoming 1995–96 season clearly the 1993–94 season. This appendix lists least in part, as CBS claims, to the major demonstrates that the three established the packagers of programming included studios supplying an increased networks are not precluding in the prime time schedules of ABC, percentage of prime time programming. independent product from their NBC, and CBS Inc. (‘‘CBS’’) from the 17. Concentration of ownership in the schedules and thereby concentrating 1969–70 season to the 1994–95 season program production industry. In ownership of prime time programming and the percentage of prime time connection with this factor, commenters in their hands. 18. Audience shares of first-run network programming supplied by these favoring retention of the fin/syn rules syndicated programming carried by packagers. Figures for the 1995–96 focused on levels of network ownership non-network affiliated stations during season are projected based on one week of prime time entertainment prime time. According to INTV, of the announced fall line-up on the programming. The Coalition asserts that expiration of the fin/syn rules will limit three networks. Economists the networks’ share of copyrights in the ability of independent stations to Incorporated defines ‘‘packager’’ for such programming has increased from acquire first-run prime time syndicated purposes of this calculation as the entity 29% to 35% since repeal of the financial programs. INTV states that first-run that assumed contractual responsibility interest rule but does not provide programming accounts for only 39% of to a network for production or delivery documentation for these figures. INTV of a series. the prime time programming of contends that the percentage of prime independent stations, and that this 16. While we agree with the Coalition time entertainment series produced in- programming ‘‘rarely achieves’’ ratings that the Economists Incorporated study house by the networks increased from comparable to the ratings of indicates a decline in the number of less than 1% in 1984–85 to 7.6% in the programming shown on the networks. packagers of programming included in 1993–94 season. (We note that However, the Economists Incorporated the prime time schedules of ABC, NBC, Economists Incorporated, upon which data cited by INTV reflect only and CBS from 29 in 1993–94 to 17 in the INTV relies, has revised its figures of programming aired in the top 50 fall of 1995, we do not agree that these 7.6% for 1993–94 to 6.3%.) However, markets in November 1994, and do not figures necessarily demonstrate a neither the Coalition nor INTV include ratings information. Thus, the reduction in source diversity due to establishes a clear trend toward data cited do not support INTV’s claims. either the relaxation of our fin/syn rules increased network ownership of such ABC notes that first-run productions or anticompetitive behavior on the part programming that is attributable to the such as ‘‘Star Trek/Deep Space Nine,’’ of the three networks. We note that relaxation of our fin/syn rules or that ‘‘Kung Fu,’’ and ‘‘The Legendary Appendix E also shows that the number constitutes a cause for concern from a Journeys of Hercules’’ have been of packagers declined from 31 to 26 public interest standpoint. Moreover, syndicated successfully in prime time from 1990–91 to 1991–92, which was looking at the percentages of hours of without reliance on the networks’ prior to the relaxation of our rules. We prime time entertainment series affiliates. In sum, it has not been shown believe that this decline, which cannot accounted for by in-house network that competitive first-run prime time be attributed to elimination of the production since 1993, we observe that programming is unavailable to financial interest rule, is instead these percentages have fluctuated from independent stations, nor has it been attributable to the inherent riskiness of year to year. Accordingly to NBC, in- demonstrated that the repeal of our prime time programming, which may house productions accounted for 20.2% remaining fin/syn restrictions would also explain the change in the number of the established networks’ prime time diminish the amount of first-run of packagers on which the Coalition entertainment series hours in 1992–93, programming available to independent comments. In addition, we observe that 19.0% of these hours in 1993–94, 25.8% stations or otherwise be detrimental to the identity of the packagers listed in of these hours in 1994–95, and 22.2% of the diversity of programs and program Appendix E varies from year to year. these hours in the Fall 1995 schedule. sources. This suggest that the list for any given (We note that the wide difference 19. The overall business practices of year does not represent all program between the figures cited by INTV and emerging networks, such as Fox, in the suppliers selling to the networks, nor those cited by NBC is due to the fact that network television and syndication can the variations in the lists be used to INTV’s figures refer to the percentage of business. Although it does not directly support a finding that suppliers are the number of prime time entertainment discuss its business practices, Fox being excluded from the market. We series produced in-house, whereas provides information in its reply also observe that Warner Brothers, NBC’s figures document the number of comments about its production of prime which is developing a new broadcast hours of such programming.) Thus, we time programming. Fox states that it television network to compete with cannot say, based on the showings made currently produces only 31⁄2 of its own ABC, CBS, and NBC, is providing in this proceeding, that the networks 15 hours of prime time network 23.33% of the prime time entertainment have acted to preclude the prime time programming, and that it produces a schedule of the three major networks for programs of other producers from substantial amount of programming for the fall of 1995. This figure tends to reaching the market, or that program other networks, including ‘‘Chicago discount any claim that ABC, CBS, and production has been concentrated in the Hope’’ and ‘‘Picket Fences’’ for CBS. Federal Register / Vol. 60, No. 183 / Thursday, September 21, 1995 / Rules and Regulations 48911

Fox offers itself as a ‘‘perfect laboratory will, or course, be reviewing these Incorporated in our PTAR proceeding, model’’ of a broadcast network that has acquisitions in the normal course of its and the emergence of two additional not been subject to regulatory regulatory business to ensure that they broadcast networks, we find that the constraints as a producer. We believe do not undermine the competiveness of established broadcast television that the fact that most of the prime time the production and distribution networks have faced more, rather than programming aired on the Fox network markets. less, competition from broadcast is produced by outside suppliers is 22. The growth of additional television purchasers and distributors evidence that permitting a network to networks, including the development of since 1993. In keeping with this finding, own and syndicate programming does Fox and its position vis-a-vis the three we disagree with King World’s claim not result in foreclosing independent major networks. In their comments, that the established networks have suppliers from the market. NBC, CBS, and ABC point to the bottleneck power over the broadcast 20. Network negotiating patterns, growing audience share of Fox, and to television distribution system. particularly the manner in which their own declining audience share, as 23. The growth in the number and networks obtain financial interests and evidence of the competition Fox types of alternative outlets for sale of syndication rights and the extent to provides to the established broadcast programming (e.g. the development of which successful negotiations over networks. CBS notes that the aggregate the Direct Broadcast Satellite (‘‘DBS’’) back-end rights influence network prime time viewing share of the three service; cable penetration; wireless cable buying decisions. While not directly original networks, which had already development). We determined in our Second R&O that cable networks were addressing this issue, the Coalition does fallen to 59% in 1992, dropped further assert that the established networks competitors to the established broadcast to 57% in the 1993–94 season. NBC, have uniformly lowered the license fees television networks in the purchase of CBS, and ABC also point to the they pay for prime time entertainment television programming. CBS and ABC emergence of the United Paramount and programming. However, the Coalition point out in this proceeding that there Warner Brothers networks as evidence cites figures without providing any has been continued growth in the of both the forward integration of documentation. Moreover, as NBC number and audience share of not only existing television programming points out, the Coalition does not cable networks but also other networks producers into the distribution of indicate in citing its figures what type using alternative distribution programming through broadcast of programming is involved or the track technologies (e.g., DBS, wireless cable), television outlets and the increased record of the producer. As a result, we and they cite data provided in cannot assess the significance of the number of potential purchasers of Economists Incorporated’s PTAR Coalition’s numbers. We note, too, that television programming. INTV argues comments that demonstrate the CBS cites independent industry analysts that these new networks cannot increased market share of cable as reporting that the average license fees compete effectively with the established networks. The Coalition argues that paid by the three major networks, as networks because of the structural cable and other services are not effective estimated on a per-hour basis, remained advantages enjoyed by the latter— competitors to broadcast television, and virtually unchanged from the 1992–93 primarily the number of VHF stations that cable and other non-broadcast season through the 1994–95 season. owned by or affiliated with the networks therefore are not effective Thus, we find that proponents of established networks. INTV also competitors to broadcast networks. retaining the fin/syn rules have suggests that the two newest networks However, we have already decided in provided no probative evidence that the have not had a significant competitive our Second R&O that these alternative established networks have exercised impact because they supply only 2 to 4 video delivery systems provide undue market power since 1993 in their hours of weeknight prime time sufficient competition with the negotiations for financial interests and programming. We have, however, broadcast networks to obviate the need syndication rights in television already decided in our Second R&O that for fin/syn restrictions and, absent programming. any structural advantages of the evidence of new developments, this 21. Mergers or acquisitions involving established networks are no longer conclusion need not be revisited. networks, studios, cable systems and sufficient to allow them to dominate the Moreover, based on the evidence in the other program providers since our 1993 program production and distribution record before us, we find that the fin/syn decision took place. CBS cites a markets. Moreover, Fox has competed established broadcast television number of mergers that have occurred effectively for a number of VHF networks have faced more, rather than since 1993 that have resulted in the affiliates and initiated a series of less, competition for the acquisition of formation of large new competitors in affiliate switches, which have resulted television programming from non- the video production and distribution in some of the established networks broadcast television purchasers since markets. Among these are the merger of having fewer, rather than more, VHF 1993. Viacom Inc., Blockbuster Entertainment affiliates than they did in 1993. Thus, 24. Proponents of retaining our Corp., and Paramount Communications, any structural advantage that the remaining fin/syn rules have failed to Inc., which has resulted in a company established networks may have had carry their burden of proof that earlier with both production and distribution based on ownership of an affiliation relaxation of these rules has threatened capabilities. To the extent that such with VHF stations has been diminished diversity in the television program mergers have strengthened the rather than increased since our Second production and distribution markets, or production and distribution capabilities R&O. Even if the impact of the United enabled the established networks to of the merging parties, the three original Paramount and Warner Brothers engage in anticompetitive activities to networks are facing more effective networks is currently relatively small, the detriment of the public interest; or competitors in the video production and they nonetheless appear to be viable that the current conditions of the distribution markets. We note as well new competitors for the established production and distribution markets the recent announcements that the Walt networks and may increase their market warrant retention of the rules. Disney Company plans to acquire ABC share as Fox has done. Given Fox’s Proponents of retaining the rules have and that Westinghouse Electric Corp. growth in audience share, as not provided persuasive evidence that plans to purchase CBS. The Commission documented by Economists the established networks engage in, or 48912 Federal Register / Vol. 60, No. 183 / Thursday, September 21, 1995 / Rules and Regulations threaten to engage in, affiliate favoritism November 10, 1995, would disrupt the concluded that no evidence had been to the detriment of non-network conduct of business by parties relying presented showing that earlier repeal stations; that the established networks on the rules, although we sought would disrupt the conduct of business place or retain programming in their comment on this point. We also note, as by parties relying on the rules. Given schedules because of their financial discussed above, that the networks now the increased competition facing the interests in or syndication rights to that face more competition than in 1993 for networks and the negative effects of the programming, or for other than the acquisition of television fin/syn rules on production and legitimate competitive reasons; or that programming from broadcast and non- distribution markets, the Commission the established networks have reduced broadcast television distributors. concluded that no public interest the pool of suppliers of television Moreover, we have described at length purpose would be served by waiting programming through anticompetitive the negative effects of the fin/syn rules until November 10, 1995, to sunset the practices. on production and distribution markets rules. 25. In addition, proponents of in our earlier decisions. Under these retaining the remaining fin/syn rules circumstances, we conclude that no Ordering Clauses have provided no evidence unrelated to public interest purpose would be served 32. Accordingly, It Is Ordered that our fourteen factors that would cause us by allowing the rules to remain in effect pursuant to the authority contained in to question whether the conclusions we until November 10, 1995. We thus Sections 4(i), 4(j), 301, 303(i), 303(r), reached in 1993 remain valid today. Nor conclude that all of the remaining fin/ 313 and 314 of the Communications Act have they shown that the semi-annual syn rules will be repealed immediately of 1934, as amended, 47 U.S.C. reports submitted by the networks upon publication of this Order in the §§ 154(i), 154(j), 301, 303(i), 303(r), 313 reveal ownership patterns that pose a Federal Register. and 314, Sections 73.659 through 73.663 threat to programming diversity. Final Regulatory Flexibility Analysis of Part 73 of the Commission’s Rules, 47 Moreover, there is persuasive evidence CFR Part 73, Are Amended as set forth 28. Pursuant to the Regulatory that the established broadcast television below, effective upon publication of this networks have faced increased Flexibility Act of 1980, the Commission Order in the Federal Register. competition for the acquisition of has set forth the following Final television programming from broadcast Regulatory Flexibility Analysis. The 33. In keeping with our recent and non-broadcast television Secretary shall send a copy of this decision in our PTAR proceeding, It Is distributors since 1993, and there is Report and Order, including the Final Further Ordered that section 73.662 of evidence which suggests that the market Regulatory Flexibility Analysis, to the Part 73 of the Commission’s Rules, 47 power of the established networks, as Chief Counsel for Advocacy of the Small CFR Part 73, Is Further Amended as set determined by their prime time Business Administration in accordance forth below, effective August 30, 1996. audience share, has decreased since with the Regulatory Flexibility Act, 4 34. It Is Further Ordered that MM 1993. We therefore decline to alter our U.S.C. § 601 et seq. Docket No. 95–39 Is Terminated. 1993 decision to sunset the remaining 29. Need for and Purpose of this fin/syn rules. In light of the fact that the Action: This action is taken to accelerate List of Subjects in 47 CFR Part 73 commenters have not shown a need to the expiration of the Commission’s Radio broadcasting. retrain these rules, we also conclude remaining fin/syn rules—previously that there is no justification for scheduled for November 10, 1995—so Federal Communications Commission. strengthening any of the rules, as the that the rules will expire upon William F. Caton, Coalition urges. publication of this Order in the Federal Acting Secretary. 26. Finally, we note that both the Register. Rule Changes Coalition and INTV urge us to retain, 30. Summary of Issues Raised by the and indeed strengthen, our reporting Public Comments in Response to the Part 73 of title 47 of the Code of requirements for the networks even if Initial Regulatory Flexibility Analysis: Federal Regulations is amended as we allow the rest of the fin/syn rules to None. follows: expire. These parties argue that it is 31. Significant Alternatives important for the Commission to Considered and Rejected: The PART 73ÐRADIO BROADCAST monitor the network’s conduct Commission considered retaining the SERVICES following repeal of the remaining rules remaining fin/syn rules. However, after in order to assess the impact of such reviewing the comments submitted in 1. The authority citation for part 73 repeal. However, neither of these this proceeding, the Commission continues to read as follows: commenters has demonstrated the need concluded that the proponents of Authority: 47 U.S.C. 154, 303, 334. to continue reporting requirements, and retaining the rules had not met their we decline to do so. burden of proving that the rules are still 2. Sections 73.659 through 73.661, 27. In our Notice, we sought comment needed to achieve the FCC’s goals of and 73.663, are removed and reserved. on whether, in the event proponents of source and outlet diversity in the 3. Sections 73.662 is amended by retention of the fin/syn rules failed to television programming marketplace. revising the heading and introductory meet their burden of proving that One commenter in this proceeding text to read as follows: retaining the rules is warranted, we argued that the fin/syn rules should be should amend our rules to allow for an strengthened. The Commission 73.662 Definitions for television prime expiration date earlier than November considered this argument but concluded time access rules. 10, 1995. Commenters in this that it was without merit in light of the For purposes of § 73.658(k): proceeding have failed to demonstrate fact that no need for retaining the rules * * * * * that market conditions and networks at all had been demonstrated. The 4. Effective August 30, 1996, § 73.662 behavior since 1993 justify retraining Commission also considered leaving the is removed and reserved. the rules. In addition, no evidence or remaining fin/syn rules in place until argument has been submitted showing their previously scheduled expiration [FR Doc. 95–23366 Filed 9–20–95; 8:45 am] that repeal of the remaining rules before date of November 10, 1995, but BILLING CODE 6712±01±M