Diller Calls for Cable Regulation


Las Vegas -- Exploiting his reputation as a self-described contrarian, USA
Interactive chairman Barry Diller believes the business climate is ripe for more
regulation of the cable and broadcast industries.

Even as the Federal Communications Commission prepares to relax or eliminate
traditional broadcast-ownership rules, Diller, in a speech to the National
Association of Broadcasters' convention here, called on local TV stations to
fight media consolidation that has been under way for several years, which, he
said, has given most of the media power to the owners of ABC, CBS, NBC and

But twice, Diller branched off to appeal for tighter regulation of the cable
and direct-broadcast satellite industries.

Although he was less than precise, Diller said, "Having tight
program-ownership and financial-interest rules for the already completely
concentrated cable and satellite business is mandatory."

The FCC has rules that restrict the number of channels a cable operator may
fill with affiliated programming. But those rules were struck down and remanded
to the agency by a panel of the U.S. Court of Appeals for the D.C. Circuit March
2, 2001.

Repealed financial-interest rules that the FCC once applied to CBS, NBC and
ABC restricted ownership and syndication rights of shows that ran on the
networks during primetime.

Independent Hollywood producers want a form of the rules revived, calling on
the FCC to require the "Big Four" networks to set aside about five hours per
week of primetime for unaffiliated creators.

"Ten years ago, independents produced 16 new series. Last year, they produced
just one," Diller said.

The basis for proposed FCC deregulatory moves is that media markets have
fundamentally changed over the years.

TV broadcasters today are living under rules adopted prior to the advent of
cable TV, DBS and the Internet, FCC chairman Michael Powell has said.

But Diller said ownership curbs are needed today because media markets are
highly concentrated.

"Five corporations, with their broadcast and cable networks, are now on the
verge of controlling the same number of households as the `Big Three' did 40
years ago," Diller said.