The Role of Politics and Policy in Television Regulation

Abstract

This article is a reply to Thomas Hazlett’s commentary on my article entitled, “Rethinking the Commitment to Free, Local Television.” Although politics and public choice theory represent an important approach for analyzing government actions, economic policy still exercises some influence over the regulation of television. On the one hand, we agree that the regulatory preference of free television and local programming is more a reflection of political considerations than economic policy and that the importance of promoting communities of interest over geographic communities, and the potential for new services such as Digital Audio Radio Services to benefit consumers. On the other hand, applying the economics of product differentiation shows how entry can create welfare benefits related to product variety and the potential impact of technological convergence.

Keywords: Communications policy, law & economics, regulation, politics, public interest, technology, advertising-supported & viewer-supported television, broadcast licensing, spatial competition

JEL Classification: K23, L82, L88