This Lobbying Campaign Won't Win Any Oscars

In the spring of 1989, Andrew C. Barrett's name started to float around Washington as a candidate for the Federal Communications Commission. Barrett, then an obscure GOP member of the Illinois Commerce Commission, hadn't even been contacted by Bush Administration recruiters when he received literature from the movie industry about a topic dear to its heart: TV syndication rights.

Jack Valenti, the canny president of the Motion Picture Association of America, knew that the networks were gearing up a lobbying blitz to repeal the rules that limit their entry into the $3 billion-a-year syndication business, now dominated by Hollywood studios. When a puzzled Barrett called, Valenti was only too happy to help him bone up on the issue.

It was one of the few ploys that didn't backfire in the latest round of the two-decade war between Hollywood and the networks over the financial interest and syndication rules, which limit network financing of prime-time shows--and deny them the fat profits that can be gained from reruns. Aided by the FCC's Barrett and deep fissures within the commission, Tinseltown is on the verge of a stunning, come-from-behind victory over the networks.

Although the matter was pulled from the FCC's Mar. 14 agenda, a prostudio proposal by Barrett has the backing of a majority of the five-member commission, including Ervin S. Duggan and Sherrie P. Marshall. Intense behind-the-scenes negotiations are under way to forge a compromise palatable to Chairman Alfred C. Sikes and Commissioner James H. Quello, who want to phase out the rules. But unless the Barrett initiative is changed radically, Hollywood will come away with far more protection than anyone expected.

HARDBALL. The so-called "fin-syn" lobbying war provides a revealing glimpse of power politics, Washington-style. With truckloads of money at stake, both sides sought an edge wherever possible. Yet more often than not, hardball tactics boomeranged, turning the struggle into the Ishtar of lobbying campaigns--a costly, overblown embarrassment. "The level of lobbying tactics has evolved to one of the lowest that I've ever seen," sighs Marshall.

For months, the networks were the odds-on favorite to win. Their position dovetailed with the deregulatory philosophy of the White House and the Justice Dept.'s Antitrust Div. They believed that since the networks' market power was steadily eroding, there was no danger in allowing them to finance more programming. In fact, they posited that competition would increase if the nets were allowed into the game.

But the networks overplayed their hand, using less-than-subtle tactics that wound up alienating the very people they were courting. NBC Inc. hired former Illinois GOP Governor James R. Thompson to lobby Barrett, whom Thompson had appointed to his state position. But Barrett declined even to go to dinner with Thompson. Barrett and some other commissioners considered it unseemly that "Big Jim" should even attempt to influence a former state employee.

Network lobbyists made matters worse by hinting darkly to reporters that Commissioner Marshall was tilting toward Hollywood because she was angling to peddle to the studios two scripts she had written in her spare time when she was a lawyer in private practice. Marshall heatedly denies the charge.

MAGIC WORDS. Hollywood was hardly more graceful, succeeding at times only in bringing down the wrath of official Washington. Wavering commissioners were wined and dined and invited on glitzy studio tours. At one meeting in the Century City (Calif.) studios of 20th Century Fox Film Corp., recalls Barrett, the studio's owner, News Corp. Chairman Rupert Murdoch, put off a Barrett aide by doodling idly during a presentation. The only time Murdoch showed interest in the proceedings was when he looked up upon hearing the magic words "return on investment."

Even minor early victories slipped away. When the Economic Report of the President earlier this year plugged the idea of a rollback of the FCC regulations, Hollywood called on Washington heavyweights to help fight back. The studios enlisted former Reagan White House official Kenneth Duberstein and former Bush Chief of Staff Craig Fuller to get the White House to back off. The White House then issued a more neutral statement. But when a Los Angeles Times story suggested that Valenti's clout led Chief of Staff John H. Sununu to order the policy shift, an embarrassed Sununu fired off a letter to Congress saying the FCC should follow the President's deregulation philosophy.

In the end, however, the commissioners may defy Bush's chief of staff. And their reasons for torpedoing the networks' best-laid plans could have as much to do with personality clashes within the FCC as with free-market ideology. The pro-Hollywood majority is chafing under what it considers Sikes's tyrannical rule. "If he insists on being a CEO who hurls thunderbolts from Mount Olympus and precooks decisions, it will be a most unpleasant four or five years," says one commissioner.

Sikes concedes that there's friction over the syndication issue but says he is confident it won't "slop over" into other matters. How much progress he makes in repairing the damage will be clear when the next episode of the fin-syn miniseries airs, probably on Apr. 9. But right now, the quick fix the networks lobbied so hard for is nowhere in sight.

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