Published online by Cambridge University Press: 18 December 2009
Introduction
This chapter considers where the scarce assets are located in the broadcasting sector and what are the lessons for public interventions to prevent the abuse of market power. It focuses on what makes broadcasting different from other sectors and on the way in which recent technological advances such as digitisation may be changing the nature and distribution of scarcity rents.
It considers two hypotheses in particular: first, that falls in the cost of reproducing and transmitting information have greatly reduced entry barriers in broadcasting, meaning that market power is less of a concern, and second, that rents in broadcasting will increasingly come from control of scarce content rather than from control over means of transmission. Both hypotheses contain elements of truth but the situation is more complex than either implies on its own. The chapter goes on to look at a number of challenges for competition policy, including such issues as market definition, exclusionary practices and bundling, matters that have been brought to the fore in recent antitrust developments. It suggests that the risks attendant on these practices may be somewhat different from those that have traditionally been emphasised and proposes rules of thumb to help identify the circumstances under which they are most likely to lead to a consolidation of market power.
We begin with a summary of technological changes in broadcasting and an assessment of their impact on the nature of competition in broadcasting markets.
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