Wednesday, October 13, 2004

James Surowiecki writes in The New Yorker about "one of the great rip-offs in American history"— the FCC licenses for local broadcast analog television.

Anybody who is outraged about the issue of Sinclair Broadcasting airing a one-hour propaganda video a week before the Presidential Election probably ought to consider directing some of their ire to the bigger picture.

In fact, the fight over spectrum has little to do with what people watch and a lot to do with what economists call “rent-seeking.” “Rents,” in econo-speak, are the excess profits that monopolists reap in the absence of competition. By endowing local broadcasters with free channels, the government effectively made them little spectrum monopolists, and the one thing we know about monopolies is that they do not disappear of their own volition. The broadcasters, thanks in large part to their monopolies, have enormous lobbying resources, and their control of the airwaves has made local television—and, in particular, local television news—a powerful weapon to wield against politicians who cross them. Politics drives the business, and the business shapes the politics. As for the public interest—does “Desperate Housewives” count?

The good news: we all get the government the majority deserve. The information: the majority deserve the government we're about to get.

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