BY BRIAN Lowry

Los Angeles Times

HOLLYWOOD - Born within days of each other, the WB and UPN networks have at times behaved like squabbling children - name-calling and roughhousing, trying to claim the best affiliated stations or largest share of the viewing pie.

Yet while each network will celebrate its fifth birthday in the middle of January, the milestone marks a more significant signpost for the television industry, a business shifted on its axis during the 1990s and whose prospects often appear as precarious as a toddler's whims.

Much of the last decade's tumult has stemmed from the elimination of federal rules that kept networks from distributing the programs they broadcast. Phasing out those guidelines cleared the way for a spate of mergers -such as Disney grabbing up ABC - as well as the launch of studio-backed networks, following the trail blazed by Fox.

The WB has generally gotten the better of UPN in their skirmish, which has contributed to dilution of the existing talent pool and further splintering of the audience.

As is often the case, however, understanding the future begins with a grasp of the past - in this case, an epic tale full of intrigue, feuding and Star Trek," starting with Paramount's plans to become the "fourth network" nearly a quarter-century ago. In fact, long before Fox made its debut in 1986, young executives tried to achieve the same goal at Paramount, whose inability to realize that institutional dream allowed Fox and the WB to become the thriving enterprises they are today.

"The men leading the Paramount Television Service," as a sales brochure for the venture said, became some of the most influential players in the entertainment industry. They included Barry Diller, then chairman of Paramount Pictures; Michael Eisner, the studio's president; Richard Frank, its vice president, later president of the Walt Disney Studios; and Mel Harris, currently co-president and chief operating officer of Sony Pictures.

In 1977, Paramount announced that the service, dubbed PTVS, would launch in May 1978 with a single night of programming: an original movie and the series "Star Trek: Phase 2."

To Diller's chagrin, Paramount pulled the plug six months before the venture was to make its debut. Studio chief Charles Bluhdorn worried PTVS would lose too much money, though the $40-million projection is less than 5 percent of the losses incurred by UPN thus far.

Diller, Eisner and their team kept trying to revive the network, only to be thwarted by the late Martin Davis, who replaced Bluhdorn in 1983. "It took Martin Davis until '93 to say, 'Go do it,' " recalls Lucie Salhany, a former president of Paramount's syndication division, the. Fox network and UPN, who currently operates her own media consulting firm. "There was always a dream at Paramount to have another network,!, and it was handed down from generation to generation. In '84 we tried to do it again."

In fact, Paramount had "meeting after meeting," as Salhany recalls, with Tribune Co., the TV station group owner presently aligned with the WB. Frustrated, Diller left to become chairman of Fox, which spent $1.5 billion to acquire the six Metromedia TV stations, providing the foundation for the Fox network.

The seismic event that ultimately prompted the creation of the WB and UPN occurred in April 1993, when the Federal Communications Commission phased out the financial interest and syndication rules, which had been initiated in 1970 to bar networks from the monopolistic power of owning lucrative rerun rights to the programs they broadcast.

Although independent producers and studios lobbied hard to keep the rules in place, the government was swayed by the argument that the Big Three networks, as U.S. companies, should be unfettered to face global competition from studios such as MCA and Columbia Pictures, which had been acquired by Japanese corporations.

Bob Daly, then-chairman of Warner Bros. and onetime head of CBS, spearheaded the studio fight and saw the danger of networks supplying their own programs, locking out studios. "This is a disaster for independent producers," he said at the time. "They will be whipsawed in their deals with networks. The networks will end up abusing their power."

Daly was approached by Jamie Kellner, a former Fox president, to join him in establishing a new broadcasting entity. They soon agreed, and Kellner quickly began assembling fellow Fox alumni to launch the WB.

Paramount - which had made a fortune selling rerun rights to "Cheers" and other prime-time hits - came to a similar conclusion about the value of controlling its own programming destiny by creating a new channel, which, thanks to its partnership with Chris-Craft Industries' United Television, was dubbed the United Paramount Network.

Both networks were announced near the end of 1993, beginning a mad scramble to sign stations to carry their programming. At first, Paramount appeared to have the upper hand. The studio not only owned a group of TV stations but also had a signature program - "Star Trek: Voyager" - to anchor its push.

The WB deviated from its family oriented image with dramas such as "Buffy the Vampire Slayer" and later "Dawson's Creek," but the network established itself as the primary destination for teenagers and especially girls -carving out a profitable niche that tapped into Hollywood's obsession with fresh-faced youth.

UPN, by contrast, experienced not only management turmoil but also inconsistency in its approach. After some success with action shows and comedies featuring African American casts - a strategy Fox once used, countering the Big Three with "Martin" and "Living Single" the network changed chief executive and its programming course, deciding to go after blue-collar workers. The strategy failed, and UPN has since returned to the principal pursuit of young men, with the wrestling show "WWF Smackdown!" leading that charge.

As one network executive put it, "Paramount clearly had the advantage initially with the station lineup, and they blew it.... WB had a vision and really followed it through."

Now the proposed merger between CBS and Viacom, Paramount's corporate parent, is casting shadows over UPN's fate. While Viacom officials have lobbied the government to let them operate both networks, they have also indicated they will do what's necessary to ensure the merger is completed, which could require shedding all or part of its half-ownership stake in UPN.