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NBC Joins Fox in Bolting NAB

Washington -- NBC last week became the second major
television network to bolt the National Association of Broadcasters in a dispute about the
relaxation of TV-station-ownership rules.

The Federal Communication Commission won't allow a
TV-station owner to reach more than 35 percent of U.S. households -- a cap the four
networks want relaxed or removed but their affiliates want left unchanged to protect their
compensation flow from the networks.

NAB policy supports the affiliates.

NBC -- a division of conglomerate General Electric Co. that
owns 13 TV stations -- pulled out of the NAB officially March 7 after threatening to do so
for several months.

News Corp.'s Fox Broadcasting Co., owner of 22 local
television stations, left the trade association in June after the NAB's TV board
refused to support relaxation of the 35 percent cap.

An NAB member for 50 years, NBC communicated its decision
in a three-page, toughly worded letter from president and CEO Robert Wright to NAB
president Edward Fritts.

"Given the NAB's continued unwillingness to
embrace a forward-looking strategy aimed at securing significant deregulatory relief for
the television industry, we find ourselves with no other alternative," Wright wrote.

Throughout the letter, Wright said the TV-station industry
was coming under enormous pressure from the cable and Internet industries, and he
advocated repeal of several FCC-enforced rules.

Emphasizing the need to respond to massive changes in the
marketplace, Wright said the NAB should support lifting the ban on the common ownership of
cable systems and TV stations in the same market and lifting the ban on ownership of two
major TV networks.

"The FCC treats television broadcasters as if we still
lived in a world where Americans gathered around their black-and-white televisions to
watch Milton Berle and Bonanza," he added.

Politically, the affiliates are more powerful than the
networks inside the NAB. The affiliates pay more dues and represent hundreds of local
stations. Wright asserted that the NAB "has been captured" by affiliates
clinging to the status quo.

NAB spokesman Dennis Wharton said that because network dues
represent less than 3 percent of the association's budget, the departures of NBC and
Fox would not deal a crippling financial blow.

"This will not imperil the NAB financially in any way.
We are very healthy financially," he added.

NBC's move was presaged to some extent by actions
taken the prior week. The NAB revoked NBC's seat on the its TV board, which had been
held by Robert Okun, after NBC-owned station WNBC-TV in New York fell more than six months
behind on its dues.