NBC quits, rips NAB

Net cites org's opposition to deregulation

WASHINGTON — NBC formally resigned from the National Assn. of Broadcasters on Tuesday while accusing the trade org of refusing to push for deregulation of an industry that faces competitive threats from cablers, satellites and the Internet.

NBC’s withdrawal comes just three days after it lost its board member vote for failure to pay dues for WNBC. But the Peacock web had been talking about resigning for several months. Fox resigned from the NAB over similar public policy differences.

Ownership expansion

The central issue between the networks and the NAB is the former’s push for deregulation of national ownership caps. The affils want to keep the current cap, which limits broadcast companies to a 35% of national audience reach through their owned stations.

The affils argue that the networks are already too powerful and granting them the right to own more stations will make it tougher to negotiate compensation and scheduling.

The networks insist that the current rules hamper their ability to compete with pay-TV services, including cable and satellite. It is “all too ironic that the NAB is debating regulations from the 1940s at the same time that (America Online) and Time Warner are preparing to merge,” wrote NBC president and CEO Bob Wright to NAB prexy Eddie Fritts.

In NBC’s resignation letter to Fritts, Wright alluded to the differences between the networks and the affils: “Rather than acknowledging the challenges that our industry faces, the NAB’s actions appear to be guided by supporters of the current regulatory structure who find a narrow competitive advantage for their individual companies in today’s anachronistic regulations.”

Challenging FCC

In addition to removal of the current ownership cap, NBC would like to see an end to the Federal Communications Commission-administered Network Affiliate Rules, which regulate the relationship between nets and their affils.

NBC also would like to see the broadcast-cable ownership rules revised so that one company may own a TV station and a cable company in the same market. Such a change could dramatically increase the value of TV stations by creating a broader market of potential buyers. In addition, the Peacock web is pushing to have the dual-network rule repealed to allow one company to own two or more nets.

Although there has been speculation that ABC and CBS will follow the lead of NBC, sources believe that it is not likely at this time.

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