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US Media Markets: Is Continued Regulation Still Necessary?

US Media Markets: Is Continued Regulation Still Necessary?. Dr. Anna P. Della Valle Columbia University Presented at the 15 th International Conference of the ACEI Boston, June 13-15, 2008. On December 18, 2007, the FCC gave:. US Broadcasters a gift. Relaxation of media

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US Media Markets: Is Continued Regulation Still Necessary?

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  1. US Media Markets: Is Continued Regulation Still Necessary? Dr. Anna P. Della Valle Columbia University Presented at the 15th International Conference of the ACEI Boston, June 13-15, 2008

  2. On December 18, 2007, the FCC gave: US Broadcasters a gift Relaxation of media cross-ownership rules and cable television owners a lump of coal No change in cable ownership rules

  3. Cross-ownership not permitted

  4. Cross-ownership rules unchanged since 1975

  5. Rules Loosened for Top 20 Markets 1. New York 2. Los Angeles 3. Chicago 4. Philadelphia 5. Dallas-Ft. Worth 6. San Francisco-Oakland-San Jose 7. Boston 8. Atlanta 9. Washington, D.C. 10. Houston 11. Detroit 12. Phoenix 13. Tampa-St. Petersburg, Fla. 14. Seattle-Tacoma 15. Minneapolis-St. Paul, Minn. 16. Miami-Ft. Lauderdale 17. Cleveland-Akron 18. Denver 19. Orlando-Daytona Beach, Fla. 20. Sacramento, Calif.

  6. Exceptions to the Media Cross-Ownership Rules • Grandfathering • Financial distress

  7. 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.”

  8. 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.” Concerns Re. Localism and Diversity

  9. Cable Television Ownership Cannot reach more than 40% of US cable households

  10. Rationale for the Cable Ownership Ruling Undue market power over: Content Prices Availability of alternative means of program distribution: satellite, telephone, other cable Buying power over Independent programming

  11. 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 Exercise of Market Power Over Content

  12. Anecdotal Evidence This 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

  13. 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

  14. Experience in Other Countries Rupert Murdoch Silvio Berlusconi Emilio Azcarraga

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