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Confusing Success with Access: "Correctly" Measuring Concentration of Ownership and Control in Mass Media and Online Services

May 2004
Working Paper
03-026
By  Bruce Owen
In 2003 the Federal Communication Commission (FCC) proposed modest relaxation of its media ownership concentration rules; the proposal aroused heated political opposition and has been partially overturned by Congress and stayed pending appellate review. The purpose of this paper is quite narrow: to explore, from a public policy perspective, measurement issues associated with media ownership concentration in general, and online content control in particular. Measurement is meaningless in a vacuum. Alternative approaches to measurement derive their relative merits chiefly from their ability to assess the phenomenon under study, not from independent or abstract characteristics of the measurement device. In the policy area, the choice of a method of measurement follows from the adoption of a goal, or an understanding of the nature of a problem, rather than the other way around.

Media ownership concentration raises two broad policy concerns: (1) the problem of market power, which can reduce output and raise prices, reducing both consumer and social economic welfare; and (2) the problem of private restrictions of access by suppliers of content that may be unpopular or politically incorrect to audiences, and the closely related issue of government regulation of content and access. The first issue (economic competition) is indistinguishable from that addressed by antitrust policy, and the sophisticated analytical tools of modern antitrust analysis present the best available approach to measurement. The second problem (competition in the market place of ideas, which I call “Miltonian competition”) can also usefully be approach from an antitrust perspective, leading to a different conclusion about sound concentration measurement techniques.