The Federal Trade Commission staff has told the Federal Communications Commission that the FCC's recently proposed modifications in radio ownership rules may result in significant cost-savings and other consumer benefits. In comments sent to the FCC, the FTC staff said the proposals may promote greater efficiency and cost-savings, which in turn may lead to an increase in media outlets and in program diversity. The FTC staff based its conclusion in part on a staff statistical study of jointly owned AM-FM radio stations that indicated efficiencies from common ownership could be substantial.
The FCC is considering modifications to its radio ownership rules. Under the proposals, the FCC would permit common ownership of more than one AM and/or FM radio station in a market, as well as certain AM radio station-television station combinations. The FCC also has asked for comment on whether FM radio station-television station ownership combinations should be permitted on the same basis as AM-television station combinations.
The FTC staff said relaxation of current ownership rules may generate substantial cost-savings resulting from the greater efficiency of combined ownership of several stations. "When station owners are free to combine stations, station owners organize ownership patterns in a way consistent with efficient resource utlization," the staff said. The savings resulting from that efficiency may be invested to produce higher quality programming, the staff said. In addition, the savings may encourage the construction of new broadcast facilities as permitted by the FCC, the staff said. The staff said concerns about the proposals leading to market power may be unjustified because of a huge increase in the number of media outlets. If antitrust problems do occur, they should be handled on a case-by-case basis using enforcement tools already in place, the staff said. The staff encouraged the FCC to permit FM-television station combinations if it also permits AM-television station combinations, saying it could see no reason to differentiate between the two. The FTC staff did not address the question of the effects of the new rules on diversity in editorial viewpoints, saying that issue is beyond its expertise.
The comments represent the views of the Bureaus of Competition, Consumer Protection and Economics and does not necessarily reflect the views of the Commission or of any individual Commissioner.
Copies of the comments are available from the FTC's Public Reference Branch, Room l30, 6th Street and Pennsylvania Avenue N.Comment W., Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.
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