《新闻传播》课程教学资源（参考文献，英文版）FCC媒体所有权制度.pdf_大学文库

Media ownership Bruce m. owen L. Introduction This Article examines, from an economic perspective, federal administrative restrictions on ownership of media properties. I review both antitrust and First Amendment policy bases for the rules. I conclude that the present rules are duplicative of antitrust law en- forcement and should therefore be abolished as wasteful of public resources and a bur- den on consumer welfare. I argue that First Amendment goals are not threatened by abo- The Federal Communications Commission( Commission or FCC) has regulated owner- ship of mass media outlets since the 1920s. The Telecommunications Act of 1996, Pub L. No 104-104, 110 Stat. 56(1996), abolished some of these regulations, changed others and required the FCC to determine".as part of its [biennial] regulatory reform review under [47 U.S.C.$161]. whether any of such rules are necessary in the public interest the result of competition. The Commission shall repeal or modify any regulation it de- termines to be no longer in the public interest. The Commission's third biennial review initiated in 2002, began a comprehensive re-evaluation of the rules affecting broadcast Gordon Cain Senior Fellow in the Stanford Institute for Economic Policy Research and Professor by courtesy, of Economics, Stanford University. This Article originated in invited remarks pre- pared for an October 2001 FCC Roundtable on Media Ownership (http://www.fcc.govlownershin/roundtable.htmlhttr://www.fccgow/realaudio/tr102901.ndf(transcriptofFcc Roundtable on Media Ownership Policies-10/29/01). A refocused version was later submitted in the FCC public record on behalf of several media companies( Comments of Fox Entertainment Group, Inc and Fox Television Stations, Inc, National Broadcasting Company, Inc. and Tele mundo Communications Group, Inc, and Viacom, MB Docket No. 02-277, January 2, 2003). The present final version was prepared for, but on account of scheduling conflicts not delivered at, the February 2003 Quello Symposium. I am grateful to Kent Mikkelsen and Michael Baumann for useful suggestions (47 U.S.C. $202(h). The statutory language is not a model of clarity, and the meaning of the phrase"whether any of such rules are necessary in the public interest as the result of competition has been subject to judicial interpretation. See note 4 infra

3 Media Ownership Bruce M. Owen1 I. Introduction This Article examines, from an economic perspective, federal administrative restrictions on ownership of media properties. I review both antitrust and First Amendment policy bases for the rules. I conclude that the present rules are duplicative of antitrust law enforcement and should therefore be abolished as wasteful of public resources and a burden on consumer welfare. I argue that First Amendment goals are not threatened by abolition. The Federal Communications Commission (Commission or FCC) has regulated ownership of mass media outlets since the 1920s. The Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996), abolished some of these regulations, changed others, and required the FCC to determine “…as part of its [biennial] regulatory reform review under [47 U.S.C. § 161] … whether any of such rules are necessary in the public interest as the result of competition. The Commission shall repeal or modify any regulation it determines to be no longer in the public interest.”2 The Commission’s third biennial review, initiated in 2002, began a comprehensive re-evaluation of the rules affecting broadcast- 1 Gordon Cain Senior Fellow in the Stanford Institute for Economic Policy Research and Professor, by courtesy, of Economics, Stanford University. This Article originated in invited remarks prepared for an October 2001 FCC Roundtable on Media Ownership (http://www.fcc.gov/ownership/roundtable.html; http://www.fcc.gov/realaudio/tr102901.pdf (Transcript of FCC Roundtable on Media Ownership Policies - 10/29/01)). A refocused version was later submitted in the FCC public record on behalf of several media companies (Comments of Fox Entertainment Group, Inc. and Fox Television Stations, Inc., National Broadcasting Company, Inc. and Telemundo Communications Group, Inc., and Viacom, MB Docket No. 02-277, January 2, 2003). The present final version was prepared for, but on account of scheduling conflicts not delivered at, the February 2003 Quello Symposium. I am grateful to Kent Mikkelsen and Michael Baumann for useful suggestions. 2 (47 U.S.C. §202(h)). The statutory language is not a model of clarity, and the meaning of the phrase “whether any of such rules are necessary in the public interest as the result of competition” has been subject to judicial interpretation. See note 4 infra

ers. This review was predicated, in part, on D. C. Circuit reversals of Commission actions in earlier biennial reviews. While the fCC will likely have acted in its current proceed ing by the time this article is published, probable judicial review and further FCC pro- ceedings will support the continued relevance of the analysis There are six rules under review in the third biennial. the first four rules relate to local markets while the last two are national in scope s The local TV station ownership rule, 47 C F.R.$ 733555(b), provides that no one may own more than two TV stations in any one market and may own two only under certain conditions s The local radio ownership cap, 47 C F.R.$ 733555(a), provides that a firm may own up to eight radio stations in one market depending on the number of ra- dio stations in that market s The local TV-radio cross-ownership rule, 47 C.F.R$73 3555(b), provides that a firm that owns only one TV station in a local market may own one, four, or seven radio stations in that market depending on not only of the number of radio and TV stations but also the number of cable systems and newspapers The broadcast-newspaper cross ownership ban, 47 C.F.R.$ 73 3555(d),pro- vides that no one may own both a daily newspaper and either a TV or a radio sta- tion in the same market s The dual network rule, 47 C.F. R. $73.658(g), provides that a merger between firms that are among the top four television broadcast networks is not permitted but a top-four network may merge with a network not among the top four The national TV station ownership cap, 47 C F R.$ 733555(e), provides that no company may own a group of television stations that, in the aggregate, can reach more than 35 percent of U.S. households (There is no corresponding nationwide imit on the number of radio stations that any firm can own The courts in 2001 Notice of Proposed Rule Making in the matter of 2002 Biennial Regulatory Review -Review of the Commissions Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 20 of the Telecommunications Act of 1996, MB Docket No. 02-277, released September 23, 2002 Fox Television Stations, Inc v. FCC, 280 F 3d 1027, rehearing granted, 293 F 3d 537 (D.C. Cir 2002), addressed the national TV ownership rule. Sinclair Broadcast Group, Inc v FCC, 284 F 3d 148 (D. C Cir. 2002), rehearing denied Aug. 13, 2002, addressed the local TV ownership rule. These cases held that $202(h)carries a presumption in favor of repealing or modifying the ownership rules

4 ers.3 This review was predicated, in part, on D.C. Circuit reversals of Commission actions in earlier biennial reviews.4 While the FCC will likely have acted in its current proceeding by the time this Article is published, probable judicial review and further FCC proceedings will support the continued relevance of the analysis. There are six rules under review in the third biennial. The first four rules relate to local markets while the last two are national in scope. * The local TV station ownership rule, 47 C.F.R. § 73.3555(b), provides that no one may own more than two TV stations in any one market and may own two only under certain conditions. * The local radio ownership cap, 47 C.F.R. § 73.3555(a), provides that a firm may own up to eight radio stations in one market depending on the number of radio stations in that market. * The local TV-radio cross-ownership rule, 47 C.F.R. § 73.3555(b), provides that a firm that owns only one TV station in a local market may own one, four, or seven radio stations in that market depending on not only of the number of radio and TV stations but also the number of cable systems and newspapers. * The broadcast-newspaper cross ownership ban, 47 C.F.R. § 73.3555(d), provides that no one may own both a daily newspaper and either a TV or a radio station in the same market. * The dual network rule, 47 C.F.R. § 73.658(g), provides that a merger between firms that are among the top four television broadcast networks is not permitted, but a top-four network may merge with a network not among the top four. * The national TV station ownership cap, 47 C.F.R. § 73.3555(e), provides that no company may own a group of television stations that, in the aggregate, can reach more than 35 percent of U.S. households. (There is no corresponding nationwide limit on the number of radio stations that any firm can own. The courts in 2001 3 Notice of Proposed Rule Making in the matter of 2002 Biennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket No. 02-277, released September 23, 2002. 4 Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, rehearing granted, 293 F.3d 537 (D.C. Cir. 2002), addressed the national TV ownership rule. Sinclair Broadcast Group, Inc. v. FCC, 284 F.3d 148 (D.C. Cir. 2002), rehearing denied Aug. 13, 2002, addressed the local TV ownership rule. These cases held that §202(h) carries a presumption in favor of repealing or modifying the ownership rules

struck down the fCC rule limiting cable television MSOs to 30 percent of U.S households.) In reviewing these regulations policy analysis is required at several levels. First, what policy goals are at issue? Second, how should media ownership transactions be analyzed in light of these goals, and what standards should apply? Third, is this analysis best con- ducted case-by-case or reflected in a rule of general applicability? It is not difficult to identify two broad social values at issue in media ownership policy There is little opposition to the idea that ownership policy should promote economic competition(to increase the economic welfare of consumers) and First Amendment vah ues( to preserve the political freedom of citizens). Of course there is room for disagree ment on the specifics and on how to balance the goals to the extent they are in conflict will argue below that the goals are not in conflict, so that no tradeoff is required. On the meaning of First Amendment values, I accept for purposes of this Article the classical Western liberal position that decentralized, unregulated competition in the marketplace of ideas is a desirable prospect, and I reject the modern liberal position that the public has a ight passively"to be informed"by the state, directly or through a state-engineered and regulated media industry. 6 I believe that the economic aspect of media ownership concentration is best approached using the standard tools of economic analysis intended for such purposes. Analyzing the fects and measuring the extent of economic concentration is a well-developed field of economic policy analysis, especially in the context of antitrust enforcement. Whether In Time Warner Entertainment Co v. Federal Communications Commission, 240 F 3d 1 126(D. C Cir. 2001), the U.S. Court of Appeals for the District of Columbia Circuit struck down the Federal Communications Commission's cable ownership rules, 47 C F R$876.503-76504, promulgate ursuant to $1l(c)of the Cable Television Consumer Protection and Competition Act of 1992, 47 S.C.$533(f(1). The court applied a standard developed in Time Warner Entertainment Co United States, 211 F 3d 1313(D.C. Cir. 2000) a defense of the modern liberal position may be found in Lee Bollinger, Image of a Free Press, Chicago, 1991. Statements of the classical liberal position may be found in John Miltons famous Areopagitica: A Speech For The Liberty OfUnlicensed Printing To The Parliament Of England (1664) and more recently in Lucas Powe, American Broadcasting and the First Amendment, Univ of Calif. Press, Berkeley, 1987, and Matthew L Spitzer, Seven Dirty Words and Six Other Stories Controlling the Content of Print and broadcast. Yale Univ. Press 1986

5 struck down the FCC rule limiting cable television MSOs to 30 percent of U.S. households.5 ) In reviewing these regulations policy analysis is required at several levels. First, what policy goals are at issue? Second, how should media ownership transactions be analyzed in light of these goals, and what standards should apply? Third, is this analysis best conducted case-by-case or reflected in a rule of general applicability? It is not difficult to identify two broad social values at issue in media ownership policy. There is little opposition to the idea that ownership policy should promote economic competition (to increase the economic welfare of consumers) and First Amendment values (to preserve the political freedom of citizens). Of course there is room for disagreement on the specifics and on how to balance the goals to the extent they are in conflict. I will argue below that the goals are not in conflict, so that no tradeoff is required. On the meaning of First Amendment values, I accept for purposes of this Article the classical Western liberal position that decentralized, unregulated competition in the marketplace of ideas is a desirable prospect, and I reject the modern liberal position that the public has a right passively “to be informed” by the state, directly or through a state-engineered and regulated media industry. 6 I believe that the economic aspect of media ownership concentration is best approached using the standard tools of economic analysis intended for such purposes. Analyzing the effects and measuring the extent of economic concentration is a well-developed field of economic policy analysis, especially in the context of antitrust enforcement. Whether 5 In Time Warner Entertainment Co. v. Federal Communications Commission, 240 F.3d 1126 (D.C. Cir. 2001), the U.S. Court of Appeals for the District of Columbia Circuit struck down the Federal Communications Commission’s cable ownership rules, 47 C.F.R. §§ 76.503-76.504, promulgated pursuant to §11(c) of the Cable Television Consumer Protection and Competition Act of 1992, 47 U.S.C. §533(f)(1). The court applied a standard developed in Time Warner Entertainment Co. v. United States, 211 F.3d 1313 (D.C. Cir. 2000). 6 A defense of the modern liberal position may be found in Lee Bollinger, Image of a Free Press, Chicago, 1991. Statements of the classical liberal position may be found in John Milton’s famous Areopagitica: A Speech For The Liberty Of Unlicensed Printing To The Parliament Of England (1664) and more recently in Lucas Powe, American Broadcasting and the First Amendment, Univ. of Calif. Press, Berkeley, 1987, and Matthew L. Spitzer, Seven Dirty Words and Six Other Stories: Controlling the Content of Print and Broadcast, Yale Univ. Press 1986

ownership concentration poses harm to competition or to consumers is precisely the ques- tion upon which the antitrust laws and their enforcers focus The modern approach to analysis of ownership concentration is illustrated by the frame work set out in the DOJ/FTC Merger Guidelines(Merger Guidelines or Guidelines). The Guidelines, while certainly not infallible, are widely respected by courts and commenta- tors alike. The guidelines describe methods by which the government can assess the m- pact of a proposed transaction. Also, the guidelines offer the private sector a rational ba- sis to predict the likely reaction of the authorities to a proposed merger or acquisition, thus reducing uncertainty and unnecessary transaction costs. In close cases, the Guide- lines help to focus debate on the key factors affecting consumer welfare rather than on extraneous issues Very briefly, the Merger Guidelines require analysts to consider what products consum- ers view as alternatives for those produced by the merging parties, to define a"relevant market consisting of such products, to measure concentration among sellers in that mar- ket, and to consider the ease with which other sellers could enter. The aim of the analysis is to assess the risk that consumers will be faced with price increases(or quality deterio- ration )as a result of the proposed transaction. In addition to an analytical framework, the Guidelines establish non-binding administrative standards(in terms of permitted levels of concentration, for example) for the exercise of prosecutorial discretion. In an antitrust context the purpose of the guidelines is to provide the public with tools to predict the au thorities'decision whether or not to bring a law enforcement action to stop any given transaction. As spillover effects, the Guidelines informally restrict the discretion of prosecutors and provide authoritative analytical guidance to courts both in deciding merger cases and in other areas of antitrust law, especially those where market definition is a significant issue Mass media compete in many different product and geographic markets. Some of these markets are ordinary commercial markets for the sale of advertising, the purchase of pro- gramming, and(in the cases of multichannel video program distributors, certain internet service providers, and print media)the compilation of content packages and the provision 6

6 ownership concentration poses harm to competition or to consumers is precisely the question upon which the antitrust laws and their enforcers focus. The modern approach to analysis of ownership concentration is illustrated by the framework set out in the DOJ/FTC Merger Guidelines (Merger Guidelines or Guidelines). The Guidelines, while certainly not infallible, are widely respected by courts and commentators alike. The Guidelines describe methods by which the government can assess the impact of a proposed transaction. Also, the Guidelines offer the private sector a rational basis to predict the likely reaction of the authorities to a proposed merger or acquisition, thus reducing uncertainty and unnecessary transaction costs. In close cases, the Guidelines help to focus debate on the key factors affecting consumer welfare rather than on extraneous issues. Very briefly, the Merger Guidelines require analysts to consider what products consumers view as alternatives for those produced by the merging parties, to define a “relevant market” consisting of such products, to measure concentration among sellers in that market, and to consider the ease with which other sellers could enter. The aim of the analysis is to assess the risk that consumers will be faced with price increases (or quality deterioration) as a result of the proposed transaction. In addition to an analytical framework, the Guidelines establish non-binding administrative standards (in terms of permitted levels of concentration, for example) for the exercise of prosecutorial discretion. In an antitrust context the purpose of the Guidelines is to provide the public with tools to predict the authorities’ decision whether or not to bring a law enforcement action to stop any given transaction. As spillover effects, the Guidelines informally restrict the discretion of prosecutors and provide authoritative analytical guidance to courts both in deciding merger cases and in other areas of antitrust law, especially those where market definition is a significant issue. Mass media compete in many different product and geographic markets. Some of these markets are ordinary commercial markets for the sale of advertising, the purchase of programming, and (in the cases of multichannel video program distributors, certain internet service providers, and print media) the compilation of content packages and the provision

of transmission or delivery services for sale to consumers. For ease of reference I will refer to the foregoing as"economic"markets. These markets are addressed in Section II of this Article. The mass media also play an important role in the metaphoric"market place of ideas, which I discuss in Section Ill. I will bring the two types of markets to- ether in Section Iv a brief summary of my proposed approach to FCC media ownership policy is as follow The most sensible way to consider the effects of ownership concentration in media eco- nomic markets is to use the Merger Guidelines approach. But if the Commission adopts this rational policy it will duplicate the work of the Antitrust Division, which would be a aste of public and private resources. The commission also has monitored the effects of concentration in the marketplace of ideas. However, as a practical matter, enforcement of the Clayton Act in media economic markets will serve to prevent undue concentration in markets for ideas and information. as a result, there is no longer a rational basis for the Commission to regulate media ownership Rules versus case-by-case analysis Rules(e.g, a ban on newspaper- TV station cross-ownership [ownership of a cross is still permitted) conserve public and private resources, but at the cost of increased Type I and Type II errors. Rules also increase predictability. Case-by-case analysis reduces errors but is more expensive for regulators and applicants The Commissions traditional ownership policies might be justified on the basis of what is called"judicial economy. For example, the nature and definition of local advertising markets might be so well-established through prior experience, and the appropriate stan- dards necessary to prevent mergers or natural concentration from harming consumers or advertisers might be so well-understood, that a general rule would save everyone n- These errors correspond respectively, here, to incorrectly permitting the harmful and to incorrectly forbidding the beneficial The common law process can in principle be inexpensive if there is stare decisis and a sufficient body of applicable precedent. In the present context, with rapidly changing technology and market arrangements, new fact issues will have to be analyzed

7 of transmission or delivery services for sale to consumers. For ease of reference I will refer to the foregoing as “economic” markets. These markets are addressed in Section II of this Article. The mass media also play an important role in the metaphoric “marketplace of ideas,” which I discuss in Section III. I will bring the two types of markets together in Section IV. A brief summary of my proposed approach to FCC media ownership policy is as follows: The most sensible way to consider the effects of ownership concentration in media economic markets is to use the Merger Guidelines approach. But if the Commission adopts this rational policy it will duplicate the work of the Antitrust Division, which would be a waste of public and private resources. The Commission also has monitored the effects of concentration in the marketplace of ideas. However, as a practical matter, enforcement of the Clayton Act in media economic markets will serve to prevent undue concentration in markets for ideas and information. As a result, there is no longer a rational basis for the Commission to regulate media ownership. Rules versus case-by-case analysis Rules (e.g., a ban on newspaper-TV station cross-ownership [ownership of a cross is still permitted) conserve public and private resources, but at the cost of increased Type I and Type II errors.7 Rules also increase predictability. Case-by-case analysis reduces errors, but is more expensive for regulators and applicants.8 The Commission’s traditional ownership policies might be justified on the basis of what is called “judicial economy.” For example, the nature and definition of local advertising markets might be so well-established through prior experience, and the appropriate standards necessary to prevent mergers or natural concentration from harming consumers or advertisers might be so well-understood, that a general rule would save everyone in- 7 These errors correspond respectively, here, to incorrectly permitting the harmful and to incorrectly forbidding the beneficial. 8 The common law process can in principle be inexpensive if there is stare decisis and a sufficient body of applicable precedent. In the present context, with rapidly changing technology and market arrangements, new fact issues will have to be analyzed

volved from wasting time and effort on case-by-case analysis, even at the cost of some small errors It makes sense to have rules, perhaps with waivers, when the outcome of nearly every case can be readily predicted on the basis of easily ascertainable facts. For example, thirty years ago only 2.7 percent of U.S. cities with a daily newspaper had more than one such newspaper. Similarly, most cities had no more than three significant commercial TV sta- tions. A merger between the newspaper and one of the TV stations in these cities would almost certainly have increased concentration significantly in local advertising markets however broadly defined. In those circumstances, a rule banning such cross-ownership was likely more efficient than repetitive case-by-case analysis. Today the relevant facts vary significantly across local markets, and a rule-based approach is no longer approprh When facts differ significantly from one transaction to another, a case-by-case approach is likely to be superior to a rule if it employs analytical tools that are well-defined and easy to understand. If prospective applicants understand these tools, they can model the agencys decision process. This increases predictability and, presumably, reduces the number of applications likely to be rejected. The Merger Guidelines are again a very use- ful model of such a tool. 9 In spite of the Guidelines state-of-the-art analytical framework, there might be pragmatic reasons to reject the use of traditional antitrust enforcement standards in media industries. Imagine, for example, that empirical studies by the Commission demonstrated significant adverse effects on the price of advertising in local media markets when HHI levels exceeded 800. That might justify the Commissions use of 800 rather than 1,000 or 1, 800 as a safe harbor, or it might justify an owner ship cap at 800, depending on the nature of the empirical findings. The Merger Guidelines stan- dards are of general applicability. Their numerical values, frankly, are arbitrary. Certainly they are not necessarily appropriate for every industry. As it happens, there is no evidence that a special standard is required for broadcasting and related industries 8

8 volved from wasting time and effort on case-by-case analysis, even at the cost of some small errors. It makes sense to have rules, perhaps with waivers, when the outcome of nearly every case can be readily predicted on the basis of easily ascertainable facts. For example, thirty years ago only 2.7 percent of U.S. cities with a daily newspaper had more than one such newspaper. Similarly, most cities had no more than three significant commercial TV stations. A merger between the newspaper and one of the TV stations in these cities would almost certainly have increased concentration significantly in local advertising markets, however broadly defined. In those circumstances, a rule banning such cross-ownership was likely more efficient than repetitive case-by-case analysis. Today, the relevant facts vary significantly across local markets, and a rule-based approach is no longer appropriate. When facts differ significantly from one transaction to another, a case-by-case approach is likely to be superior to a rule if it employs analytical tools that are well-defined and easy to understand. If prospective applicants understand these tools, they can model the agency’s decision process. This increases predictability and, presumably, reduces the number of applications likely to be rejected. The Merger Guidelines are again a very useful model of such a tool. 9 9 In spite of the Guidelines’ state-of-the-art analytical framework, there might be pragmatic reasons to reject the use of traditional antitrust enforcement standards in media industries. Imagine, for example, that empirical studies by the Commission demonstrated significant adverse effects on the price of advertising in local media markets when HHI levels exceeded 800. That might justify the Commission’s use of 800 rather than 1,000 or 1,800 as a safe harbor, or it might justify an ownership cap at 800, depending on the nature of the empirical findings. The Merger Guidelines standards are of general applicability. Their numerical values, frankly, are arbitrary. Certainly they are not necessarily appropriate for every industry. As it happens, there is no evidence that a special standard is required for broadcasting and related industries

II Ownership Issues in Economic Markets There is nothing in the Constitution about competition. Competition is simply a socially useful process for allocating resources. Experience has shown that competition, even if imperfect, generally produces greater and more reliable benefits for consumers than the alternatives. The alternatives include not only monopoly but regulated monopoly, regur lated competition, central planning, and collectivization. Based on this pragmatic proach, free markets are desirable policy objectives when they are burdened neither by monopoly nor by regulation. Free markets are an inferior choice when they are so imper fect that even flawed regulation produces better results Every free market produces not just a set of outcomes measured in terms of prices, out- puts, productivity, technological progress and so on, but also a natural"market structure In some cases the natural market structure is rather concentrated. In the extreme it can even be a so-called"natural monopoly. "Traditional antitrust(and especially merger) pol- icy seeks to prevent concentration when it is not natural. Economically sound antitrust enforcement seeks to stop mergers that will tend to reduce consumer welfare by raising prices and to prevent monopolies from arising for reasons other than a superior ability to benefit consumers FCC ownership policies such as ownership caps and cross-ownership rules appear to ac- cept the idea that competition is desirable. However, such rules implicitly reject the suff ciency of the antitrust approach I have just described. More specifically, the ownership ules reject certain natural market outcomes, even those that are not the result of mergers What lies behind this choice? It would be accurate to say that a principal basis for the Commission's historical media ownership policies has been the assumption that "natural"market outcomes would pro- duce insufficient diversity of content or sources or ease of access to the media. And hid ing just beneath the surface of the diversity principle has been the more ancient notion that the radio spectrum, as a nationalized resource, should be sharedfairly'aI

9 II. Ownership Issues in Economic Markets There is nothing in the Constitution about competition. Competition is simply a socially useful process for allocating resources. Experience has shown that competition, even if imperfect, generally produces greater and more reliable benefits for consumers than the alternatives. The alternatives include not only monopoly but regulated monopoly, regulated competition, central planning, and collectivization. Based on this pragmatic approach, free markets are desirable policy objectives when they are burdened neither by monopoly nor by regulation. Free markets are an inferior choice when they are so imperfect that even flawed regulation produces better results. Every free market produces not just a set of outcomes measured in terms of prices, outputs, productivity, technological progress and so on, but also a “natural” market structure. In some cases the natural market structure is rather concentrated. In the extreme it can even be a so-called “natural monopoly.” Traditional antitrust (and especially merger) policy seeks to prevent concentration when it is not “natural.” Economically sound antitrust enforcement seeks to stop mergers that will tend to reduce consumer welfare by raising prices and to prevent monopolies from arising for reasons other than a superior ability to benefit consumers. FCC ownership policies such as ownership caps and cross-ownership rules appear to accept the idea that competition is desirable. However, such rules implicitly reject the sufficiency of the antitrust approach I have just described. More specifically, the ownership rules reject certain natural market outcomes, even those that are not the result of mergers. What lies behind this choice? It would be accurate to say that a principal basis for the Commission’s historical media ownership policies has been the assumption that “natural” market outcomes would produce insufficient diversity of content or sources or ease of access to the media. And hiding just beneath the surface of the diversity principle has been the more ancient notion that the radio spectrum, as a nationalized resource, should be shared “fairly” among its