Fox Network Pulls Out of NAB

News Corporation's Fox Network and the National Association of Broadcasters have gone their separate ways. Fox made the announcement on June 8 in protest over the Association's refusal to lobby against legal limits on the number of television stations one company can own. The limit is now defined by Federal law as a total number of stations that reach no more than 35% of the more than 100 million homes in the US. Three weeks earlier, NBC, a unit of General Electric, had threatened similar action over the NAB's refusal to change its policy.

According to Peggy Binzel, a News Corp. lobbyist, "It seemed to make no sense to be in a trade association that opposed our No.1 legislative priority." The networks---none of which has a plurality of viewers---want to campaign for greater deregulation in an attempt to restore themselves to a position of dominance in home entertainment and to pump up declining revenues. "We have a general view that there needs to be across-the-board broadcast deregulation," Binzel says.

The majority of NAB members are independent stations and network affiliates who fear that lifting limits on station ownership will give the networks an unfair advantage over them. The networks, in turn, fear the encroachment of cable, satellite services, and telephone companies---providers who were granted new rights to provide television programming by the passage of the Telecommunications Act of 1996, which paradoxically also broadened the limits for station ownership. Satellite services have also recently won the right to retransmit local TV signals, which was previously forbidden (see previous story).

Increased station ownership might provide a revenue boost for the networks in the short run, but it probably won't restore them to the pinnacle of power they enjoyed in the 1950s, '60s, and '70s. Many industry observers agree that the networks' glory days are over. They have seen their market share shrink annually as the Internet, home theater, and other forms of diversion pull potential viewers away in ever greater numbers.

Fox's departure and NBC's threat are mostly symbolic. The NAB, which provides public relations and lobbying efforts for the broadcasting industry, receives less than 4% of its funding from the major networks. The financial impact of Fox's absence will be minimal, according to NAB spokesman Dennis Wharton.

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