For decades, the Department of Justice's (DOJ) Antitrust Division has maintained that local broadcast television stations compete only against one another when analyzing mergers and other competition issues. This view is out of sync with today's media marketplace. With the explosive growth of online video and digital content along with the proliferation of cable and satellite television channels, broadcasters face intense competition for audiences and local advertising dollars. Yet, the DOJ's outdated viewpoint stifles broadcasters' ability to achieve efficiencies to allow them to best serve audiences with the high-quality entertainment and locally-focused news, weather and sports they have come to expect. It is well past time for the DOJ to update its regulatory policies to reflect the realities of the 21st century media market.
Here's why:
As a direct result of the DOJ's narrow view of the media marketplace, broadcasters face strict limitations in acquiring stations and taking advantage of important economies of scale. This skews the competitive playing field because giant tech companies such as Facebook and Google, large pay-TV and broadband providers such as Charter Spectrum and Verizon, and online video providers like Netflix and Amazon are not subject to comparable limitations. Yet, broadcasters compete with them for local viewers and advertising dollars. Neither consumers nor advertisers believe that local TV stations are their only options for accessing video content or placing advertisements:
The bottom line:
The DOJ should recognize what broadcasters, cable and satellite providers, online content providers, advertisers and consumers already know: technological advances have transformed the media landscape. In light of these vast changes, the DOJ should reevaluate its approach for defining the relevant market and analyzing competition when reviewing TV station mergers.