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What the FCC hath wrought

With the FCC's approval in its back pocket, Viacom now appears ready to get UPN's programming woes under control.

Viacom won the go-ahead last week to own two broadcast television networks—CBS and UPN—as the FCC relaxed restrictions on dual-network ownership. It was a historic moment, however one views it; this is the first time in U.S. broadcast history that two TV networks have had the same owner. Now, a variety of sources say, the media giant is quickly moving to beef up UPN's low-rated programming lineup.

The change in dual-ownership rules also allows any of the Big Four networks (CBS, ABC, NBC and Fox) to acquire The WB, as well—if AOL-Time Warner want to sell.

Viacom didn't own CBS for most the time it had a half-interest in UPN (Chris-Craft owned the other half). So now, for the first time in its history, UPN has a single owner. That may not last. Viacom is currently in negotiations with News Corp. on new co-ownership structure.

The FCC's approval comes just weeks before network executives are scheduled to unveil their fall lineup to advertisers. Because of the expected change in ownership, UPN's programmers have been somewhat at a standstill for the last few months, and executives have only green-lighted two comedies and two drama pilots for the fall season, which UPN will present to advertisers on May 17.

By comparison, The WB has more than a dozen of each in development.

"It appears that Viacom and UPN are starting to get really aggressive and extremely passionate about their programming," says one top studio executive. "It appears they want to be a formidable destination."

Sources say the network will likely announce within a month that it has reached a deal with co-owned Paramount Network Television for the next Star Trek series, Enterprise, debuting this fall. The network's longtime anchor series Star Trek: Voyager ends its run next month.

Insiders say UPN is also fighting hard and offering top dollar for 20th Century Fox-produced drama Buffy The Vampire Slayer. The cult hit is currently in the final year of its contract at The WB, where network executives have repeatedly stated they will not pay more than $1.6 million an episode for the series. But insiders now say The WB has quietly upped the ante to $1.8 million per episode. Viacom/UPN executives are reportedly willing to pay at least that amount and possibly more.

If The WB were to lose Buffy, the show's spin-off Angel (20th Century Fox) could also become a free agent and possibly wind up on UPN, as well. The potential additions would join UPN's Thursday-night block of WWF Smackdown and Monday night lineup of African-American comedies next season. Viacom and News Corp. executives had no comment.

Viacom issued a statement that applauded the FCC for a decision that "correctly reflects the highly competitive nature of the broadcast industry … We hope that the commission will take additional actions in the future to rationalize other areas under its oversight."

One other "area" is the station-ownership cap, which a Federal Appeals Court in Washington will revisit in September. Viacom, News Corp., NBC and Disney are all counting on the court to overturn the 35% station cap and have the FCC bump up the cap, perhaps to 50% or even beyond. Viacom's possible UPN arrangement with Fox depends in part on that rule change because CBS and Fox are currently over the limit.

The FCC's dual-network decision added to changes Congress enacted in 1996 when it eased the long-standing prohibition barring one company from owning more than one network. Since then, ABC, CBS, NBC and Fox have been permitted to launch new networks or buy any net launched in the past five years. Basically, that was only PaxTV.

Congress prohibited the Big Four from acquiring each other, as well as Viacom's UPN or Time Warner's WB, in order to preserve programming diversity created by those startup Weblets. But Viacom, which bought CBS last year, argued that UPN would go out of business if a divestiture were forced because no company would want to absorb its losses.

Without the latest change, Viacom would have been forced to shed UPN by May 4. The rule change was endorsed by FCC Chairman Michael Powell and Commissioners Susan Ness and Harold Furchtgott-Roth.

Commissioner Gloria Tristani, a foe of media consolidation, complained there were other ways to preserve UPN. "Wholesale abandonment of well-settled rules is not the way to save a struggling network," she said. Instead, she said, Viacom should have been forced to seek a permanent waiver to the rule, which would have forced the company to turn over financial documents proving UPN's precarious condition and allowed the FCC to extract conditions from the company.

Relaxation of the rule won support of the Rainbow Coalition, but a smaller minority group opposed the change. The Black Entertainment & Telecommunications Association noted that Viacom has already cut its commitment to African-American audiences by canceling City of Angels, a CBS hospital drama featuring a largely minority cast, and firing talk show host Tavis Smiley soon after acquiring Black Entertainment Television. "Reduced competition spells reduced quality black programming, as well as reduced opportunities for black producers, directors, writers, actors and other media professionals," said Talib Karim, BETA president.

—Bill McConnell contributed to this story