Sun. Jun 16th, 2019

Market Fundamentalism, Reasonable Regulation, and Today’s Internet


Last week, Fox News’ Tucker Carlson delivered a monologue that struck a nerve and went viral.  He claimed “market fundamentalism” had overtaken the Republican party, rendering it incapable of helping to solve our country’s problems.

The New York Times’ Bret Stephens responded with a claim of hypocrisy.  Stephens asserted that the Telecommunications Act of 1996— which by Stephens’s light reflects “market fundamentalism” made Carlson’s career possible.  Thus, Carlson derided deregulation while benefiting from it.

Riffing on the classic Monty Python “What have the Romans ever done for us” scene from Life of Brian, Stephens’ column envisions  Carlson asking what the “elites” have done to help Fox.  Carlson’s more enlightened producer responds, “deregulation” and elaborates,

The Reagan administration did away with the Fairness Doctrine, which required equal, honest and balanced treatment of opposing points of view. We’d have no business model if it were still in place. And the 1996 Telecommunications Act, which Bill Clinton signed, allowed News Corp. to integrate 20th Century Fox, TV Guide and HarperCollins under the same roof, and helped Rupert gain access to 40 percent of American homes just a year later.

Put aside that Carlson never advocated for repealing the 1996 Telecommunications Act or reviving the Fairness Doctrine.  And put aside as well that  he probably should not take editorial positions based upon their likely effects on the company he works for.

But, from my professorial perspective, Stephens is just wrong about these regulations. The Fairness Doctrine only applied to broadcast television and radio, never cable. Fox News would have actually benefited from the old regulations, because its broadcast competitors could only offer limited political content. After Trump’s victory, many liberals shared memes blaming his victory on the repeal of the Fairness Doctrine via Fox News, which was promptly debunked by factcheckers.

The 1996 Telecommunications Act liberalized many ownership restrictions in broadcast radio and television, including cross-ownership regulations which had prohibited joint ownership of local radio and television stations as well as local newspapers. However, these rules never prohibited television stations from owning book publishers or national magazines.

These simple inaccuracies aside, Stephens misses the bigger point.  Fox and the other cable providers, which still are quite regulated, often face unfair competition from dominant fringe providers like Google and Facebook that enjoy freedom from virtually all regulation.  Laissez faire market fundamentalism at this point would actually hurt Fox, other broadcastersm as well as newspapers and publishers.

A few examples:

  • Google and Facebook, which have a digital ad duopoly, downgrades subscription news such as Wall Street Journal in search results and hosted articles.
  • Amazon used its monopoly power in eBooks to compel publishers to sell eBooks at a set price, and only changed the policy after an antitrust lawsuit. It has monsopony power over book purchases, allowing publishers few options if they are unhappy with the commissions.
  • Tech Giants take minimal precautions to protect intellectual property theft on their platforms, and use their monopolistic services to advocate against legislation which strengthened IP.

These practices are not just bad for the media industry, but, more important, also harm our democracy and civic discourse. They allow a few tech giants to control our national dialogue with an economic model that encourages low quality, sensationalist click bait at the same time giving Silicon Valley executives carte blanche to censor or impose their ideological bias through their supposedly neutral platforms and algorithms.

As Newscorp’s CEO Robert Thomson put it, “But in this age, utterly dominated by content distributors – the duopoly – at the expense of content creators . . . it is fair to say that the World Wide Web has not evolved in the manner that most civilised individuals had hoped, say, 15 years ago.”

And that’s really Carlson’s point.  Any sort of fundamentalism—market or otherwise—is bad, especially when inconsistently applied as with today’s media and communications landscape.  The edge providers are transforming the internet from an engine of creation and human connection into a drab marketing machine.  No set of prior intellectual commitments should stop intelligent, creative regulation.