NEW YORK, Oct. 2, 1983 -- President Reagan called Federal Communications Commission Chairman Mark Fowler to the White House last week to discuss the FCC's efforts to relax the rule governing television program finance and syndication.
The financial interest and syndication rule has pitted the Hollywood studios against the major television networks in a battle over millions of dollars in revenue from the production and syndication of TV shows. Under the current rule the networks are barred from owning programs or controlling their syndication, but the FCC has proposed phasing out the regulation.
The unusual Oval Office meeting, reportedly the first Fowler has had with the president since being named to head the FCC, comes to light as the Hollywood film and production community is putting increasing pressure on the White House and on Congress to block the FCC's effort to revise the rule. Producers and studios say that the TV networks would dominate the field unfairly if the restraints are relaxed.
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Two sources attending the meeting said Reagan did not give any indication of his views on the issue, although legislative sources close to the film industry say they have been repeatedly told of the president's support for the Hollywood effort.
In addition to Reagan and Fowler, those attending the 45-minute meeting, held late last Wednesday, were Edwin Meese III, counselor to the president; White House Chief of Staff James A. Baker III; Deputy Chief of Staff Richard G. Darman; Assistant to the President for Communications David Gergen, and Fowler's administrative assistant, Willard R. Nichols.
Word of the meeting has startled communications industry officials on both sides of the issue. It is highly unusual for a president to meet with an independent regulatory agency chairman on an issue pending before the agency, and many regulatory experts would considered it improper for Reagan to have suggested what action Fowler take on the proposal.
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One White House official who was present insisted that Reagan did not take a position on the issue at the meeting and that there is no White House position as yet on the lifting of the rules. "There were no policy indications," the official said. "It is more accurate to say Reagan was briefed."
An FCC official said Fowler decided that under FCC rules there was no reason to file notice of ex parte contact as a result of the White House meeting since FCC officials viewed it as a briefing rather than a lobbying session with an outside party.
Reagan reportedly has discussed the issue with his friends and political allies in the Hollywood community, and one friend, actor Charlton Heston, is among the most outspoken and visible of the rule's opponents in the Capitol Hill lobbying campaign.
Complicating the administration's difficulties with the issue is the fact that there are differing views about the issue within the Reagan White House, sources said. In addition, the Departments of Justice and Commerce both have backed the FCC move to phase out the regulation.
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Several key Capitol Hill sources said today that they had been told that Reagan, who has considerable experience with film and television contracts and syndication packages, took "Fowler to the woodshed" over its proposal, a characterization a top White House official labeled a "fairy tale."
"It is generally believed that this president feels most strongly about things about which he has personal experience," said a congressional source. "He's had experience with this one."
At issue in the fight is whether the three major commercial television networks, American Broadcasting Cos. Inc., CBS Inc., and National Broadcasting Co. Inc., will play a greater financial role in the television programming and syndication arena. The rules barring them from the $800 million market were adopted by the FCC in 1970.
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In August, the FCC issued a preliminary decision that essentially lifts the financial interest rule but limits the networks' control over prime-time series. After a show has had a five-year run, the networks could have another firm syndicate the show to local stations. Eventually, the networks themselves would be allowed to syndicate shows.
The FCC action launched a flurry of activity on Capitol Hill aimed at blocking final FCC actions on the rules for five years. A House subcommittee approved that measure two weeks ago, and Senate efforts to block the proposal, using an appropriations bill, appear to be gaining steam.
Sen. Pete Wilson (R-Calif.), sponsor of the Senate plan to block the FCC, has written the White House asking for its position on his effort. Sources point out that it is unlikely the president would take a position on the issue unless faced with a piece of legislation he would be forced to sign or veto.
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A leading network spokesman on the issue, CBS corporate affairs Vice President William Lilley III, said late today that CBS is aware of the White House meeting. "Our understanding is that Chairman Fowler briefed the president on communications issues, that the president expressed no views one way or another on any issues discussed, and that Chairman Fowler did a good job explaining the issues," Lilley said.
