US Media Markets: Is Continued Regulation Still Necessary? Dr. Anna P. Della Valle Columbia University Presented at the 15 th International Conference.
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US Media Markets: Is Continued Regulation
Still Necessary?Dr. Anna P. Della ValleColumbia University
Presented at the 15th International Conference of the ACEI
Boston, June 13-15, 2008
On December 18, 2007, the FCC gave:
Relaxation of mediacross-ownership rules
No change in cable ownershiprules
US Broadcasters a gift
and cable television owners a lump of coal
Cross-ownership not permitted
Rules Loosened for Top 20 Markets1. New York2. Los Angeles3. Chicago4. Philadelphia5. Dallas-Ft. Worth6. San Francisco-Oakland-San Jose7. Boston8. Atlanta9. Washington, D.C.10. Houston11. Detroit12. Phoenix13. Tampa-St. Petersburg, Fla.14. Seattle-Tacoma15. Minneapolis-St. Paul, Minn.16. Miami-Ft. Lauderdale17. Cleveland-Akron18. Denver19. Orlando-Daytona Beach, Fla.20. Sacramento, Calif.
Cross-ownership rules unchanged since 1975
Exceptions to the Media Cross-Ownership Rules
• Grandfathering
• Financial distress
Rationale for US Media Cross Ownership Rules
• Pursuant to the 1934 Communications Act, the FCC is required to ensure that licenses to public TV and radio broadcasters are granted “in the public interest and necessity” to “promote diversity and localism.”
Concerns Re. Localism and Diversity
Arguments for:• Need to give viewers,
listeners, readers what they want
• Cost efficiencies• Change in media
landscape– Availability of other sources– Internet as “citizen media”
Arguments against:• Homogenization of
programming• Evidence from radio• Loss of localism• Empirical evidence• Effect on “marketplace of
ideas.”
Cable Television Ownership
Cannot reach more than 40% of US cable households
Rationale for the Cable Ownership Ruling
Undue market power over:
Prices Content
Buying power overIndependent programming
Availability of alternativemeans of program distribution: satellite, telephone, other cable
Exercise of Market Power Over Content
Arguments for:• Need to give viewers
what they want.• Increased efficiency
from vertical integration
• Availability of other media sources
Arguments against:• Buyers’ market power
over independent programmers
• Sellers’ market power from premium services
• Incentives to favor own programming and content
• Empirical evidence
Anecdotal EvidenceThis idea that the cable companies don't discriminate is ridiculous. That's what they do. They're the gatekeeper of the platform. They decide whether you get the golf channel or the food channel, and, you know, if they're part owner of you, your odds of getting on tend to be a little higher, but I mean that's exactly precisely what they do.
Jerry Levine, Chairman, Time Warner, Transcript of AOL/Time Warner FCC Hearings
Anecdotal Evidence
If the rules (allowing increased consolidation of cable companies) had been in place in 1970, it would have been virtually impossible for me to start Turner Broadcasting or, 10 years later, to launch CNN.
Ted Turner, ex-chairman Turner Broadcasting Washington Post, 05/30/2003
Experience in Other Countries
Rupert Murdoch Silvio Berlusconi Emilio Azcarraga
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