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Carey makes a case

Fox TV CEO calls for an end to owner regs

WASHINGTON — Fox Television CEO Chase Carey called on lawmakers and regulators to abandon the current broadcast regulatory regime, especially its limit on the number of stations a single company may own.

Carey insisted that major broadcast networks cannot survive without the ability to own more stations. Currently, there is a 35% national coverage cap for owned stations. Like the other network honchos, including CBS’ Mel Karmazin and ABC’s Bob Iger, Carey maintained it is impossible for networks to compete with a plethora of cable and DBS channels without the benefits of greater station ownership.

“The old broadcast network model simply does not work anymore,” said Carey, who told his Media Institute audience that the combined profits of all four major broadcast networks are less than either TNT or CNN.

Consolidation trend

The current trend toward consolidation is an unstoppable business reality, according to Carey. “CBS and NBC simply can’t compete on a stand-alone basis. Neither can Universal or Sony.”

Carey also called for factions within the broadcast industry to drop their differences and take a unified stand against all forms of regulation.

He was referring to some station groups and smaller networks that are worried about the loss of their congressionally imposed “must carry” status on cable systems. In addition, many affiliate groups are opposed to any relaxation in the ownership caps because of fears that this will give the networks an upper hand in negotiations over compensation and scheduling.

But Carey said the constant bickering among networks, affiliates and station groups has led to paralysis in the broadcasting industry, while the cable, computer and radio industries have scored huge successes. He referred to the broadcasting industry’s inability to work out its internal differences as a “case study for incompetence.”

Without regulatory freedom, broadcast television may have no other choice but to start charging subscription fees for programming or face extinction, Carey said. “Those stuck behind … archaic regulations and business structures have only two choices: to fade away or to follow their competition to a world of … dual revenue streams,” Carey said.