Analyzing the Broadcasting Situation Essay

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level of public intervention in broadcasting is justified by the existence of market failures that mean, left to itself, the broadcast market would not serve the public interest as well as it could or should'. Discuss.

The British Broadcasting Corporation is the key player in public service broadcasting in the UK. The organization was established in 1926 as a public corporation. The company is funded with the revenue generated from licenses. All TV owners are required to purchase these licenses. The corporation is prohibited from running advertisements on any of its channels. Britain's public broadcasting became free of state control in the 60s. The relinquishing of state monopoly gave birth to many other broadcasting stations with a commercial bias, but they were still controlled strictly. The new entities were run on revenue generated from advertizing. They also sold licenses that allowed viewers to enjoy their programs. The set up still holds true in the British broadcasting environment, despite recent evolutions and development of digital transmission stations all over the country. A similar trend is replicated in other European countries and elsewhere.

However, the U.S.A. operates on a different model (Keat 2011). Public broadcasting organizations were initially established as monopolies. A number of these were under direct oversight by the state. These corporations had evolved their operations in the mid 90s when they adopted a dual approach and embraced both commercial and public broadcasting. The UK is noted to have started commercial broadcasting earlier than it happened in other European states. These countries run their public broadcasting with both license fees and revenue from advertizing (Hesmondhalgh, 2007).

There are two arguments that suffice in the provision of public service in general. Firstly, there is the distributive justice aspect. This means that such service is anchored on the premise that such service is a public right; irrespective of people's socio-economic status. This service cannot be provided if it is left to market forces (Keat, 2011). Secondly, the character of the required service may be unpredictable and may not serve the purpose it is centrally intended for. In some scenarios, the first argument may hold true, while in others, the second suffices. There is the third category in which both arguments hold true. Education is a good example of a service in which both arguments are relevant. The health sector is anchored on the first argument (Keat, 2011).

The second premise is more relevant to the provision of broadcasting as a public service. It is argued by some critics that if broadcasting is left, entirely, to commercial forces, the public will be starved of essential programs. Consequently, it can be inferred that an effective public broadcasting service must be based on two premises, i.e. identifying the intention of broadcasting and giving justification for it while demonstrating that using a commercial model for public broadcasting will prevent the attainment of public broadcasting purposes. Dismissing the commercial model should be accompanied by tenable demonstration that there is an institutionalized approach that is effective in attaining such objectives or comes close to attaining such desired objectives (Keat, 2011).

Market Failures

The shortage and, or restriction of spectrum in TV broadcasting was blamed for market failure in the broadcasting industry. However, the advent of digital broadcasting has widened spectrum concerns and the niche is now considered an equal free market entity. Homes have access to encrypted content on TV. This has allowed TV operators to sell their content freely and competitively. The market failure argument is no longer tenable (Davies, 2004).

The provision of news, via public broadcasting, is a central argument for the establishment of any broadcasting entity. The premise should be juxtaposed with the position that such a service may not be guaranteed when left with commercial broadcasting entities alone. Issues of scope and relevance are deemed to arise if such commercial-based broadcasters are relied on for the service. There is some basis for this argument. For example, one might wish to draw lessons from neo-classical welfare economists relating to the possibility of markets failing as far as news provision is concerned (Keat, 2011). The neoclassical welfare economics theory postulates that ideal (theoretically) markets are efficient in Pareto optimality. This means that it would not make a difference in individual progress if resources were reallocated for a set of individual preferences without negatively affecting someone else. Market situations often fail in efficiency, owing to their lack of elements of an ideal market, i.e. the absence of positive and negative dynamics of goods or even ills. It is argued that in both cases, public goods and those with positive externalities will experience a shortfall in provision.

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The situations discussed here are typical market failure scenarios. They often elicit a response in the form of public provision that does not conform to the natural market dynamics (Keat, 2011).

Broadcasting As a Public Commodity in the Digital Age

Market failure still exists irrespective of the world's transition to digital operations. We need to consider whether public broadcasting is a public good in this day. By definition, public goods and services manifest two aspects. Firstly, they are not competing interests. In other words, if one individual consumes the service, it does not affect the consumption by another in any way. Take street lighting for instance, it is used by all; there is no relationship between the number of users and the cost of providing that service. The difference in the cost of providing it to one person and availing it to a multitude is null. Consequently, it implies the service should be availed for free. Any attempt at charging for the service will preclude the provision of the service to a section of the population that cannot raise the fees (Davies, 2004). Yet, they should be getting the service for free.

Secondly, public goods do not allow for exclusive usage. Once one individual can access such a good, it is not possible to prevent others from accessing or consuming it. Consider the service provided by the police or even national defense. The import of this non-excludability is that you cannot charge for such goods. It is not possible for individuals to willingly pay for a service or commodity that is available for free. Consequently, there will be no development of private markets around such a commodity. The only recourse is to provide the service via the public sector. Analogue broadcasting met these conditions of non-excludability and non-rivalrous tendencies. Once the signal was released, there was no extra cost incurred in supplying it to people within the same locality. Analogue TV broadcast is the perfect illustration of a public commodity. Analogue broadcast is still available in the UK. Consequently, for as long as the TVs in UK still receive analogue signal, broadcasting remains largely a public good (Davies, 2004).

Market Culture vs. Social Norms

There is often a conflict between market and social norms that shape the ability of individuals to express liberties and independence in evaluating a range of goods on their list of options. The point here is that markets are only meant for purely economic goods, i.e. these are commodities that are a means to meeting other ends and are traded in amicably for other goods at an agreed price. These are befitting for the allocation of commodities that are prone to an inferior exclusive valuation approach. This implies that they are not the best choice when allocating higher, shared or personal norms. They are commodities that bear an intrinsic valuation characteristic. They are usually viewed as invaluable, and irreplaceable. They bear an inherent value because of the way the owners are attached to them. The aspect of sharing and the common understanding of the value inherent is pertinent (Lukes, 2004). It has been argued that the norms as perceived by market forces are instrumental and that they are not personal. There is a selfish perspective in which each party is focused on their own satisfaction and to the disregard of what the other party desires. These tend towards exclusivity, egoistic urges that are focused on wants, and likely to trigger an exit and not voicing one's inner expectations or intentions. These circumstances tend to encourage corrupt practices. There is likely to be corruption when goods are viewed from purely economic perspectives. It is possible for markets to come into conflict with citizen expectations. The corrupt argument presents a plausible window from which this situation can be viewed. The dynamics of market relationships such as the language at all levels of the trading chain are viewed by some as the trigger of a corrupt public. This phenomenon was referred to as "the ethic of public service" by Gordon Brown. This claim, however, fails to explain the argument and leaves us with more questions than it provides answers (Lukes, 2004).

Conclusion

Public broadcasting is an effective set up; with mechanisms and procedures necessary to the attainment of such a result. However, the advent of bullish market trends, coupled with the proliferation of commerce-oriented outfits defeating this….....

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