Competition and Market Power in Broadcasting: Where Are The 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 secondly, 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 anti-trust 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.