concentration reflects a triumph of efficiencies over market power. In the extreme, a so- called natural monopoly is able to deliver goods to consumers at a low price because its economies of scale more than offset its monopoly pricing. Antitrust policy attacks such a firm only if its market power is abused. An ownership rule imposed by the Commission must reflect a judgment that the net(of any market power costs) consumer benefits of the natural level of concentration are worth sacrificing to other policy goals. It might be sen- sible to insist that any such judgment be based in part on a quantitative assessment of the lost consumer benefits. Even if the other goals cannot be quantified, at least we would know how much we are paying to achieve them As it happens a concrete example of the"unnatural" and thus costly outcomes of Com- mission ownership policy is at hand. Before the 1996 Telecomm Act, the FCC strictly limited the number of radio stations that could be owned by a single entity in any one market as well as the total number of radio stations that a single entity could own in total across the country. The Act eliminated the national cap and the FCC eased the local cap The result has been a significant consolidation of radio station ownership. (At one point, no person was permitted to own more than seven AM and seven FM radio stations. To- day, the largest station group owns some 1,100 stations. No one would argue that radio stations in different markets compete, so joint ownership of such stations portends no monopolistic profits. The only reason for joint ownership is cost savings. The consolida tion that has taken place thus implies that the former FCC rules imposed significant costs on society. Nevertheless, it would have been very difficult to demonstrate the existence of such potential efficiencies convincingly in advance of the consolidation. 5 Vertical Ownership Issues The last area I will touch on has to do with ownership policies aimed at vertical markets The national cable ownership cap, for example, cannot possibly have any economic basis In principle, the motivation for these mergers may have been to increase concentration in local o However, radio mergers have often brought stations in the same market under common owners markets. In practice, the Department of Justice has been very active in reviewing such mergers Consequently, it is reasonable to assume that the acquisition of market power in local advertising markets has not motivated the mergers13 concentration reflects a triumph of efficiencies over market power. In the extreme, a so￾called natural monopoly is able to deliver goods to consumers at a low price because its economies of scale more than offset its monopoly pricing. Antitrust policy attacks such a firm only if its market power is abused. An ownership rule imposed by the Commission must reflect a judgment that the net (of any market power costs) consumer benefits of the natural level of concentration are worth sacrificing to other policy goals. It might be sen￾sible to insist that any such judgment be based in part on a quantitative assessment of the lost consumer benefits. Even if the other goals cannot be quantified, at least we would know how much we are paying to achieve them. As it happens a concrete example of the “unnatural” and thus costly outcomes of Com￾mission ownership policy is at hand. Before the 1996 Telecomm Act, the FCC strictly limited the number of radio stations that could be owned by a single entity in any one market as well as the total number of radio stations that a single entity could own in total across the country. The Act eliminated the national cap and the FCC eased the local cap. The result has been a significant consolidation of radio station ownership. (At one point, no person was permitted to own more than seven AM and seven FM radio stations. To￾day, the largest station group owns some 1,100 stations.) No one would argue that radio stations in different markets compete, so joint ownership of such stations portends no monopolistic profits. The only reason for joint ownership is cost savings. The consolida￾tion that has taken place thus implies that the former FCC rules imposed significant costs on society. Nevertheless, it would have been very difficult to demonstrate the existence of such potential efficiencies convincingly in advance of the consolidation. 15 Vertical Ownership Issues The last area I will touch on has to do with ownership policies aimed at vertical markets. The national cable ownership cap, for example, cannot possibly have any economic basis 15 However, radio mergers have often brought stations in the same market under common ownership. In principle, the motivation for these mergers may have been to increase concentration in local markets. In practice, the Department of Justice has been very active in reviewing such mergers. Consequently, it is reasonable to assume that the acquisition of market power in local advertising markets has not motivated the mergers