Appeals court scraps rules that limit media ownership (1 Viewer)

[MickeS]

No discussion about this here yet, so I thought I'd see what you people think about it. See http://www.msnbc.com/news/711180.asp for some details.

The television networks have argued that the nearly 60-year-old concept of a national-ownership limit is out of date. Developed in the era when competition was limited to three broadcast networks, the rule now restricts seven networks as they attempt to compete with cable, satellite, wireless and Internet operations for programming and advertising.
No longer needed to ensure competition, the rule now is skewing investment decisions and weakening free, over-the-air television, which the FCC has sought to preserve, the networks contend.
Public-interest groups, meanwhile, say the ownership limits are more important than ever in an age of media convergence. The continuing consolidation will favor a small group of powerful interests, threatening diversity in programming, the groups say.
The National Association of Broadcasts and other groups representing network affiliates also oppose relaxing the rule. Independent broadcasters and affiliates fear that they will lose bargaining power with the networks.

I don't buy the networks' argument that the rule isn't needed anymore. I'd say that the mere fact that they oppose the rule proves that it's needed!
I think there should be a cap, but I don't know if it should be 35% as it is now (even though the FCC have already granted exceptions for that).
/Mike

 

[Dave Barth]

I'd say that the mere fact that they oppose the rule proves that it's needed!

Why? It could be that there are a lot of economies of scale or scope that cannot be captured because these firms are unable to operate at the size or breadth necessary. This situation would also lead firms to argue against the rule.

I'm not saying that your assessment of the rule is wrong (or right), only that I don't agree with your reasoning.