The Federal Communications Commission’s Diversity Index plays the central role in determining where to allow newspaper-broadcast cross-ownership mergers to take place. In a lengthy discussion, the Federal Communications Commission (FCC) describes how it used the index to identify markets that would be “at risk” from excessive loss of diversity if such a merger were to take place.
While we have conducted and supported market structure analysis in this rulemaking, we find that the FCC’s Diversity Index is fundamentally flawed. The Diversity Index is a grotesque distortion of the market structure analysis routinely conducted by economists and produces results that are absurd on their face. As a result, the FCC’s new rules would allow the overwhelming majority of media markets in America to become extremely concentrated. In Washington, the magician claims that media markets are competitive, but the reality across America would be media giants dominating local markets.