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'aI9 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, regu￾lated competition, central planning, and collectivization. Based on this pragmatic ap￾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 suffi￾ciency 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 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 shared “fairly” among its