Monopolies in the Media Business - Research Paper Example

 Monopolies in the Media Business Table of Contents I. Introduction ……………………………………………………………….. 3 II. FCC Regulation in Terms of Media Concentration in Local Telephone Companies …………………………………………… 4 III. FCC Regulation in Terms of Media Concentration in Radio and Television Broadcasting Stations ……………………………………….. 5 IV. Impact of monopolies in the U.S. Media Businesses ……………….. 6 V. Is Clear Channel Monopoly or Not? …………………………………… 7 VI. Conclusion ………………………………………………………………… 7 References ………………………………………………………………………… 9 - 10 Introduction The Federal Communications Commission (FCC), established by the Communication Act of 1934, is an independent government agency in the Unites States that regulates the interstate and international communications by radio, television, wire, satellite and cable. (Federal Communications Commission, 2008a) The Commission staff under the FCC is organized based on its function. As of 2008, a total of seven operating Bureaus and ten Staff Offices as well as other filings handle issues on complaints, investigations, development and implementation of regulatory programs, and in-charge of legal hearings. (Federal Communications Commission, 2008a) Under the Wireline Competition Burea and the Media Bureau of FCC, the researcher will discuss the regulation in terms of promoting free market competition in different markets of radio, television, wire, satellite and cable radio, TV and Internet. Eventually, the researcher will discuss how monopolies could negatively affect the media businesses in the United States. Prior to the main discussion, the researcher will determine whether Clear Channel is considered as a monopoly or not. FCC Regulation in Terms of Media Concentration in Local Telephone Companies The Wireline Competition Bureau is mainly responsible for developing rules and regulation as well as the future goals and objectives with regards to telephone companies that provides an interstate and intrastate telecommunications service to the people with the use of wire-based transmission facilities. (Federal Communications Commission, 2008a) Part of the main objectives of Wireline Competition Bureau is to ensure the public to have several choices and opportunity and fairness in the wireline telecommunications services. (Federal Communications Commission, 2008b) Through its implementation of a deregulatory initiatives under the Telecommunications Act of 1996 (Telecommunicatins Act of 1996, 1996a), the Bureau was able to promote market competition necessary in keeping the infrastructure and services of the local wireline telecommunications efficient and competitive. In line with the promotion of market competition to all telecommunications company, the Bureau could maintain a high economic growth in the local telecommunications industry by increasing the quality of services at a reasonable and affordable market prices. (Telecommunications Act of 1996, 1996b) In the end, the Bureau could easily make the telecommunications services available and accessible in all regions in the U.S. Considering the high-cost of telecommunications infrastructure, FCC encourages new operators or carriers for the telecommunications business by extending a high-cost universal support to qualified bidders. (Federal-State Joint Board on Universal Service, 1997) In line with this regulation, eligible telecommunications carriers under the section 214(e) are requested to submit their bids that reflects their lower costs. (Telecommunicatins Act of 1996, 1996c) In the end, FCC is more on the advantageous side by reducing the financial support that will be extended for the universal service1. (Federal-State Joint Board on Universal Service, 1997b) FCC Regulation in Terms of Media Concentration in Radio and Television Broadcasting Stations The Media Bureau regulates the FM and AM radio and television broadcasting stations in the U.S. (Federal Communications Commission, 2008a) In line the purpose of enhancing the diversity of the local radio and television broadcasting services (Federal Communications Commission, 2008d), the Media Bureau is responsible developing, recommending, and administering related policies as well as the pre- and post-licensing programs to all the local and international electronic media such as the cable television, braodcasting television, satellite services, video programs as well as the radio stations throughout the United States and its corresponding territories. (Federal Communications Commission, 2008c) Similar to the regulation on the U.S. telecommunications group, the Media Bureau also promotes a free competition in the market on delivery of video programming under the Section 628(g) of the Communications Act of 1934 as well as the Cable Television Consumer Protection and the Competition Act of 1992. (Federal Communications Commission, 2006a; Communications Act of 1934, 1934) In line with the delivery of video programming services, Media Bureau examines the distribution technologies related to cable television and other established multichannel video programming distributors (MVPDs) such as the direct broadcast satellite (DBS) providers; home satellite dishes (HSDs); broadband service providers (BSPs) and the broadcast television services among others. (Federal Communications Commission, 2006b) Under the Cable Television Consumer Protection and Competition Act of 1992, the Media Bureau is responsible in regulating the average rates of each basic services like the local broadcast stations and the public, educationa, and governmental channels; cable programming services like pay-per-view program or the premium channel; as well as the necessary equipments such as remote control unit, set-top converter box and other equipment used in the cable television programming. (Cable Act, 1992) Price regulation is basically used by the Media Bureau as a strategy in promoting a better competition among the cable operators. (Federal Communications Commission, 2006c) Impact of monopolies in the U.S. Media Businesses The practice of monopoly in the U.S. media industry has a lot of negative implications with regards to the quality of television and radio services as well as the market price of the services rendered to the public. (Skeath et al., 1992) In the absence of government intervention with regards to the price regulation, a monopolized media company could easily take advantage of the public by charging them with a high price in exchange for a low quality services such as a highly manipulated news program. (Ackerman, 2001) Aside from controlling the market price of the media services, the absence of a free market competition in the U.S. media enables the high government officials and other powerful individuals such as the wealthy business people to easily have a significant control over the media company. As a result, there is a higher probability that the general public will be taken advantage by the minority in terms of misleading them with false public information. For instance, the former CIA Direcor William Colby admitted that the Central Intelligence Agency has a significant control over the major media groups in the United States. (McGowan, 2000) Another strong possibility is the fact that people in control of the media could impose a self-censorship in order to protect the welfare of the local government. (McChesney, 1989) Is Clear Channel Monopoly or Not? The main idea of monopoly is to dominate a specific market in the absence of a fair competition. Violating the 1996 Telecommunications Act wherein a radio company is prohibited to own more than 40 radio stations within the entire country, Clear Channel Communications in Texas is considered as a monopoly since the company owns approximately more than 1225 radio stations as of 2003. (Perlstein, 2002) As a result, Clear Channel was able to dominate as much as 100 out of the 112 major markets in the said geographic area enabling the station to dominate as much as 70% of the entire national ticket sales of concerts and other events. (Perlstein, 2002) Conclusion Aiming to promote a more effective and efficient media services in the United States, the government through the Federal Communications Commission should promote a free market competition among the local media operators in order to protect the public interests against the large scale media companies. Under the authority of Wireline Competition Burea and the Media Bureau, the local media services related to radio and television broadcasting services are highly regulated by the FCC. The case of Clear Channel is one of the few that violates the government regulation in the U.S. media industry. By dominating the market, Clear Channel was able to have more competitive edge towards it business competitors. References: Ackerman, S. (2001). The Most Biased Name in News: Fox News Channel's Extraordinary Right-Wing Tilt. Extra! A Fairnerss and Accuracy in Reporting Special Report. Cable Act, Section 623(k) was adopted as Section 3(k) of the 1992 Cable Act, Pub. L. No. 102-385, 106 Stat. 1460, codified 47 U.S.C. § 522(l7); 7 U.S.C. § 543(b)(7); 47 U.S.C. § 543(k)(1)(2); and 47 U.S.C. § 543(b)(3) (1992). Communications Act of 1934, § 628(g), 47 U.S.C. § 548(g) (1934). Federal Communications Commission, Pub. L. No. 102-385, 106 Stat. 1460 (1992). In Federal Communications Commission Twelfth Annual Report. The Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming (MB. Docket No. 05 - 255 March 3, 2006a). Federal Communications Commission, Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming. The Twelfth Annual Report. MB Docket No. 05 - 255 (March 3, 2006b). Federal Communications Commission, Implementation of Section 3 of the Cable Television Consumer Protection and Competition Act of 1992. Report on Cable Industry Prices. MM Docket No. 92 - 266 (December 27, 2006c). Federal Communications Commission. (2008a). Retrieved February 26, 2008, from About the FCC: http://www.fcc.gov/aboutus.html Federal Communications Commission. (2008b). Retrieved February 25, 2008, from Wireline Competition Bureau: http://www.fcc.gov/wcb/ Federal Communications Commission. (2008c). Retrieved February 25, 2008, from Media Bureau: http://www.fcc.gov/mb/ Federal Communications Commission. (2008d, February 15). Retrieved February 25, 2008, from Public Notice - Media Bureau Announces Comment and Reply Comment Dates for the Broadcast Localism Notice of Proposed Rulemaking. MB Docket No. 04 - 233: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-08-393A1.pdf Federal-State Joint Board on Universal Service, CC Docket No. 96 - 45, Report and Order, 12 FCC Rcd 8776, 8948, para. 320 (1997a). Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 8948, para. 320 (1997b). McChesney, R. W. (1989). Edward S. Herman on the Propaganda Model. Monthly Review . McGowan, D. (2000). Derailing Democracy: The American the Media Don't Want You to See. Common Courage Press. Perlstein, J. (2002, September). Media File. Retrieved February 25, 2008, from Clear Channel Stumbles: http://www.projectcensored.org/publications/2004/17.html Skeath, S. E., Velenchik, A. D., Nichols, L. M., & Case, K. E. (1992). Consistent Comparisons Between Monopoly and Perfect Competition. Journal of Economic Education , 23(3):255. Telecommunicatins Act of 1996, Pub. L. No. 104 -1 04, 110 Stat. 56 (1996 Act)., § 151, et seq. (Communications Act or Act). (1996a). Telecommunicatins Act of 1996, Pub. L. No. 104 -1 04, 110 Stat. 56 (1996 Act)., 47 U.S.C. §§ 214(e), 254(e). (1996c). Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996 Act)., 47 U.S.C. § 254(b)(1), (3), (5). (1996b). Read More