Broadcast Ownership Rules Lacking in Rationale, NAB Analysis Finds

FOR IMMEDIATE RELEASE
August S, 2014

Duopoly broadcast TV markets don’t result in larger advert
charges, financial research concludes

WASHINGTON, DC — The rationale underlying a number of many years-previous
media possession guidelines that broadcast tv stations solely
compete towards themselves in native markets is just not true,
the National Association of Broadcasters stated in feedback filed at this time with the FCC. The
Commission ought to modify its guidelines to raised mirror at present and
tomorrow’s market that options competitors from rival
industries because it weighs enjoyable possession restrictions, NAB
stated.

In its feedback submitted to the FCC for its 2014 Quadrennial
Ownership Review, NAB included an financial research by Economists
Incorporated that examined the Department of Justice Antitrust
Division’s place that broadcast TV stations don’t face
competitors from cable and different media sources for native
promoting income. The research discovered no proof that in native
markets the place broadcasters are engaged in a joint gross sales
settlement (JSA) or shared service settlement (SSA) are
broadcasters capable of cost larger promoting charges than in
markets the place these preparations will not be current.

“The presence of JSAs and SSAs just isn’t statistically related
with elevated promoting costs in native markets,” concluded
the research, which was carried out by economists Hal C. Singer and
Kevin W. Caves. “There is even some proof that markets with
JSAs and SSAs have costs roughly sixteen % decrease than
different markets, suggesting that these preparations profit
shoppers by decreasing prices.”

The research, which analyzed pricing knowledge from the previous 10 years
in 210 native markets, additionally discovered that in markets with a duopoly
tv station proprietor should not have greater promoting costs
than in markets with no duopoly. “Increases in native
tv broadcast station focus don’t seem to
have any impact on the promoting charges that broadcasters are
capable of cost,” the research concluded. That end result “is
in line with the conclusion that native broadcasting costs
re disciplined by non-broadcast options,” the research discovered.

NAB additionally highlighted a lot of different broadcast possession
guidelines that may not be rationally maintained in in the present day’s
market. Cross-possession guidelines that forestall widespread possession
of a radio station and TV station or broadcast entities and
newspapers in the identical market don’t promote the Commission’s
localism, competitors or variety objectives, NAB stated in its
feedback.

“The newspaper-broadcast cross possession rule, particularly,
ought to have been eradicated years in the past,” stated NAB. “Failure to
achieve this has possible led to the hastened diminishment of the
newspaper business and will function a warning to the
Commission of what can occur to the marketplace when it
ignores its deregulatory mandate and waits too lengthy to regulate
its guidelines.”

Barriers that prohibit entry to capital are the reason for
depressed feminine and minority possession of broadcast radio and
TV stations, NAB stated. Ownership restrictions haven’t led to
a rise in feminine and minority entities proudly owning broadcast
stations and actually restrict their capability to acquire enough
capital to buy and function stations.

“Purposefully miserable the worth of broadcast stations
by means of possession limitations solely makes it harder for
present licensees to take care of working capital with a view to
compete or for potential new entries to safe funding,” stated
NAB. “It merely has not labored. The time has come for the
Commission to think about higher incentives-based mostly options.”

About NAB
The National Association of Broadcasters is the premier
advocacy affiliation for America’s broadcasters. NAB advances
radio and tv pursuits in legislative, regulatory and
public affairs. Through advocacy, schooling and innovation, NAB
allows broadcasters to greatest serve their communities,
strengthen their companies and seize new alternatives within the
digital age. Learn extra at www.nab.org.