Ironically regulatory policy conceived to control market power in news outlets may have the opposite effect to deter market entry in the connected age. There are essentially no barriers to start a news outlet online, but newspapers have died by the thousands in part because they could not monetize internet business models. The Federal Communications Commission (FCC) exerts significant power by conditioning the transfer of broadcast licenses and the imposition of legacy ownership policies from the pre-internet age. These policies should be updated to reflect the reality that capital will find its best, productive use through innovators, not regulators. Notably the FCC regulates against “news distortion” (that is deliberate distortion, not inaccuracy or opinion) specifically for transmission of broadcast spectrum, but this is constrained by the First Amendment protections for press freedom. As such, the FCC has an important ex post authority to regulate entities post-merger.

News entities wanting to merge to improve their business case for investment must also get permission of the Department of Justice. A common trope by competition authorities to deter or reject mergers is to declare simply that mergers will raise prices by proffering a simplistic view of the projected sticker price post-merger. Academic papers by Howell and Potgieter perform quantitative analysis to demonstrate how and why end users consumer content and news in bundles, the many possible outcomes from pricing in mergers, and that sticker prices are meaningless when the user gets higher overall value. Moreover, higher prices may be justified in the face of investment and greater quality of news networks.

Notably investors signal that they value diversity in the news workforce. Spearheaded by Soo Kim, a long-term Korean-American investor with a proven record in the broadcast and local news industry, the pending acquisition of Tegna by Standard General could create the nation’s largest minority owned, women-led broadcasting company. Perhaps the desired social outcomes may be better achieved by the market rather than regulators. Dutton observes, “Regulation of ownership is less critical when there is competition in the media for news.”

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Forbes | by Roslyn Layton