FOR YOUR INFORMATION...................December 26, 1990


     The Federal Trade Commission's Bureau of Economics staff has
submitted a further comment to the Federal Communications
Commission, recommending that the FCC repeal completely its
financial interest and syndication (Fin-Syn) rules.  

     The comment is in response to an FCC Further Notice of
Proposed Rulemaking.  The Fin-Syn rules forbid broadcast television
networks from engaging in the domestic syndication of any program
or the foreign syndication of independently-produced programs, and
from obtaining any financial or proprietary right or interest in
the exhibition, distribution, or use of programs produced by
others, except for the exclusive right to network exhibition in the
United States.

     In September the FTC staff submitted a comment to the FCC,
suggesting repeal of the rules.  The current comment looks at
"several regulatory policies apparently designed to attain a
compromise solution between the 'polar extremes' of complete repeal
and retention of the rules as they currently exist."

     One of these compromise solutions would regulate the
negotiation process between the networks and the producers.  "We
believe that regulating the negotiation process is unlikely to
affect the ultimate outcome of the negotiations," according to the
FTC staff.  "Thus, we do not find compelling reasons to adopt any
of the proposed restrictions on the negotiation process.  Further,
since the regulation of negotiations can potentially increase the
costs of bargaining and might cause mutually beneficial
transactions to be bypassed, adoption of these regulations may
reduce efficiency."

     Another compromise would modify, but not abolish, restrictions
on network financial interests and syndication rights.  The FTC
staff said that proposed compromise limitations "may unnecessarily
interfere with pro-competitive transactions," and suggested that
conventional antitrust enforcement be used instead of specific
regulatory limits.

     "While compromise is in many situations an effective mechanism
for settlement of disputes, in this situation a compromise may lead
to a result that is less desirable than either complete elimination
or complete retention of the rules," the comment concludes.  "Our
analysis of these options leads us to continue to believe that the
best course for the FCC is to repeal completely the existing Fin-
Syn Rules."
                             (more)
     The comment represents the views of the staff of the FTC's 
Bureau of Economics.  They are not necessarily the views of the
Commission or any individual Commissioner.

     Copies of the comment are available from the FTC's Public
Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W.,
Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.

                              # # #

MEDIA CONTACT:      Susan Ticknor, Office of Public Affairs,
                    202-326-2181

STAFF CONTACT:      Bruce H. Kobayashi, Bureau of Economics,
                    202-326-3363



(Fin-Syn2)