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Communication Law Keyed to Benjamin, 2nd Ed.
Schurz Communications, Inc. v. Federal Communications Commission
Citation:
982 F.2d 1043 (1992)Facts
In 1970, the FCC adopted financial interest and syndication rules designed to limit the power of the three major television networks (CBS, NBC, and ABC) over television programming. These rules prohibited networks from syndicating programs to independent stations or obtaining financial interests in programs acquired from outside producers. The rules were intended to prevent networks from leveraging their distribution power to dominate program production. By 1991, the television industry had changed dramatically, with networks’ audience share declining from 90% to 62% due to cable television, VCRs, and the emergence of Fox as a fourth network. Despite acknowledging these changes, the FCC issued modified rules in 1991 that maintained significant restrictions on networks’ programming activities. The new rules defined “network” as an entity supplying at least 15 hours of prime-time programming to interconnected affiliates, limited networks to producing no more than 40% of their prime-time entertainment schedule, and restricted their syndication activities. The networks challenged these rules, arguing that the FCC failed to provide a reasoned explanation for continuing restrictions in light of changed market conditions.
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