Broadcast Ownership Rules Lack Rationale, According to NAB

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WASHINGTON—In recent comments filed with the FCC, the National Association of Broadcasters urged the commission to update its broadcast ownership rules to reflect the current marketplace.

The comments were submitted to the FCC for its 2014 Quadrennial Ownership Review, and included an economic study by Economists Incorporated that tested the Department of Justice Antitrust Division's position that broadcast TV stations do not face competition from cable and other media sources for local advertising revenue.

The study, which analyzed pricing data from the past 10 years in 210 local markets, found that in markets with a duopoly television station owner do not have higher advertising prices than in markets without a duopoly. The study found no evidence that in local markets where broadcasters are engaged in a joint sales agreement or shared service agreement are broadcasters able to charge higher advertising rates than in markets where these arrangements are not present.

“There is even some evidence that markets with JSAs and SSAs have prices approximately 16 percent lower than other markets, suggesting that these arrangements benefit consumers by lowering costs,” concluded the study, which was conducted by economists Hal J. Singer and Kevin W. Caves.

NAB also highlighted other broadcast ownership rules that it says can no longer be rationally maintained, including cross-ownership restrictions.

"The newspaper-broadcast cross ownership rule, in particular, should have been eliminated years ago," said NAB. "Failure to do so has likely led to the hastened diminishment of the newspaper industry and should serve as a warning to the Commission of what can happen to the marketplace when it ignores its deregulatory mandate and waits too long to adjust its rules."

NAB also said that barriers that restrict access to capital result in fewer female and minority owners of broadcast radio and TV stations, contrary to the commission’s intention.

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