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Industry Chief Sees Growing Monopoly Among Networks, Cable

October 14, 1987

BEVERLY HILLS, Calif. (AP) _ The head of the Motion Picture Industry Association of America warned entertainment industry leaders Tuesday that the three networks and cable television are heading toward a programming monopoly.

Jack Valenti said ABC, NBC and CBS are straining to escape the Financial Interest and Syndication Rules.

The rules were imposed in 1970 by the Federal Communications Commission to stop the networks’ domination of production of shows for prime-time television. The rules were intended to give independent producers a fair chance to supply entertainment for prime time.

Now, most prime-time entertainment is supplied by independent producers such as Lorimar, MTM Productions and other companies that compete creatively and commercially.

Valenti warned that such independent production is imperiled by a potential club of networks and cable operators that would seek to regain control of production of much of evening entertainment.

″Who should be fearful? If you are a programmer in any form - writer, producer, director, company executive, independent or major...you have just cause to be uneasy,″ Valenti said at a meeting of the Hollywood Radio and Television Society, a group of entertainment executives.

″If you are a home viewer who likes diversity of programs, and doesn’t want to be beholden to a few folks who provide that entertainment, then you have got to be worried,″ he said.

One network executive who shared the head table with Valenti disagreed.

″The only network produced show on primetime right now is ‘Moonlighting’ on ABC,″ said John Agoglia, NBC executive vice president for business affairs.

Agoglia said he doubted the networks want to dominate production and said he saw no trend toward that.

Valenti lamented three years of failed efforts by producers to reach a congressionally mandated production formula with the networks that would ensure competition.

Some of that was due to recent upheaval at the networks, he said.

″Almost a year ago, all three networks put forward a design that the producers accepted,″ Valenti said. ″But, the new network management backed away from their own negotiators, and the hopes for a settlement vanished, not to appear again.″

Valenti noted that a Justice Department consent decree that said the networks must use some independent production will expire in 1990.

″At that time, all three networks will be free to produce and own 100 percent of all their 22 hours of weekly prime-time programming,″ he said.

For cable, Valenti said giant cable operators, referred to as Multi-System Operators, appear unhindered by the Justice Department’s Anti-Trust Division as they continue a series of takeovers. ″The simple facts are these. By the end of this decade, a mere handful of MSO mega-monopolie s will absolutely control almost half or more of all subscribers in the nation.″

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