CMC 210 Week 4 Government-Fostered Ownership

CMC 210 Week 4 Government-Fostered Ownership -...

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Government-Fostered Ownership The development of radio industry in the USA was accompanied by the introduction strict measures concerning the regulation of the development of the industry by the state, namely by the Federal Communication Commission. The latter provides license to broadcasters and, thus, is able to influence the development of the market. In this respect, it is worth mentioning the fact that the state, by means of the Federal Communication Commission (FCC) attempted to limit the number of companies operating in the industry. In such a situation, the state assisted to the development of oligopoly in the radio industry of the USA, which can potentially outgrow into monopoly. At the same time, such a transition from oligopoly to monopoly will be possible only on the condition of the state support of such market transformation. At the moment, the FCC and the state are apparently unwilling to get the radio market rid of major competitors and maintain the existing oligopoly, which, in all probability, meets strategic interests of the state because it proves beyond a doubt that it is easier for the FCC to control or influence a few market players rather than regulating a large amount of small radio broadcasting companies and stations operating nationwide. Hence, the trend to the formation of oligopoly in the radio industry is maintained by the state in its own interests, regardless interests of smaller companies as well as customers. Potentially, such a situation raises a risk of the monopolization of the radio market if the state reregulation of the radio industry is changed. On analyzing the development of radio industry in the USA, it is important to lay emphasis on the fact that initially the market was quite liberal and the competition was consistently higher compared to the present epoch due to the larger amount of small radio stations and broadcasting companies operating in the market. In fact, the radio market developed in accordance with principles of the open market, until the state regulations had started to grow more and more severe and strict. The state regulation of the radio industry grew stronger in the 1980s and especially in the 1990s (Chomsky, 1997). The
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This note was uploaded on 05/10/2011 for the course CMC 210 taught by Professor Emil during the Spring '11 term at Aberystwyth University.

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CMC 210 Week 4 Government-Fostered Ownership -...

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