In Nick’s post below, he discusses Howard Dean’s desire to breakup large media companies. The thing that gets me about this debate is the “localism” argument, which Dean raises. Localism promotes the idea that programming is intrinsically better when it’s produced by a locally owned-and-operated station than by a national company. In Dean’s example, he bemoans the lack of locally-produced news in his home state of Vermont.
First of all, I always thought a key objective of the federal Constitution was to protect national markets from local discrimination. The Articles of Confederation failed precisely because states were not playing nice with each other to the detriment of commercial interests. Broadcast localism reverts us back to the 1780s, however, by automatically labeling nationalized markets inferior to local ones.
Of course, there were no national media companies in 1789, and most cities had dozens of newspapers competing for public attention. But the same is true today. Most cities may only have one major commercial newspaper, but “alternative” media of all stripes is thriving, such as the Internet, blogs, specialty magazines, alternative newsweeklies, and so forth. No individual is confined to just one source of information and entertainment.
Second, if large national networks are so harmful, why should the government permit them at all? Consider the recent FCC media ownership debate; the argument came down whether national broadcasters like Fox should be able to own stations reaching 35% of the nation or 45% (Congress and the White House settled on 39%). Right away you see the problem. Fox television doesn’t just reach 45% of the country; the FCC’s regulations only govern stations owned directly by Fox, not the hundreds of other stations that may be affiliated with the network. Affiliates are the lifeblood of national broadcasting. Yet under localism, they are an affront to diversity in media. After all, a Fox affiliate must carry a package of programs scheduled by the network; an affiliate generally can’t run some programs and not others, or run programs in a different order than the network’s schedule.
Or put another way, a network program provides identical content to the entire country without regard to “local interests.” If one applied antitrust theory to networks, they would be ordered broken up into regional competitors. Just imagine six regional NBC networks each forced to produce a “local” version of “Friends”—you could have one version for Atlanta residents, another for Denver, and yet another for Seattle.