Market Failures in the Media and Public Policy

I just watched the conference announcing the new book ...and Communications for All? A Telecommunications Policy Agenda for the Obama Administration from the New American Foundation. I wish I was more expert on the topic, but the discussion raised an issue in my mind.

There are market failures that affect the dissemination of information via the media. There are a lot of ways to respond to those market failures (in addition to doing nothing and living with the failure):

• Public funding, as in the case of public TV[
  
• Tax financing to encourage private funding, as is the case for educational TV;
• Direct public service, as is the case in public university operated educational TV stations;
• Regulatory action, as in the case of regulations that require private television stations to devote a portion of their station broadcasting to public service programming.

In terms of media, I am thinking about the print media (newspapers, magazines, books, etc.), broadcast media (radio and television including community broadcasting and satellite broadcasting), telecommunications, and the Internet.

Where are the market failures? I would think that they include failures to meet the information needs of children and minority populations, failure to meet the information needs of citizens on public policy issues. and failure to meet the needs of us all in areas such as natural sciences, social sciences, history and geography.

Using the same enumeration procedure, there are failures at the point of creation of content, distribution, access, and demand. I think we fail to assure:

• the creation of content which is relevant to all the information needs, with strong validation, which is consumer friendly, and targeted to the specific audiences;
• the distribution of this content through such media as school information networks, and especially to poor people in poor countries.
• the access to information. Could one subsidize the availability of radio, television, and mobile phones in Africa? How about subsidies for services such as Google that make information available to target populations with information needs not satisfied by the Internet due to market failures? Or regulation that require firms such as Google and Yahoo to include public service algorithms in their page ranking?
• the use of information by target populations. We have compulsory education, licensing for driving and professional operation, but those approaches could be extended. We could provide tax financing for people who passed citizenship tests, or we could provide rewards to people who successfully passed online courses on history, geography, or language.

The use of media is in rapid flux, and indeed new media seem to be appearing with a frequency which is historically unprecedented. Never before in history were there such problems of people being overwhelmed with choices of information sources, and thus never before was there such a problem of people attending to the wrong things, leaving areas of relative ignorance that create public policy problems.

I suggest that there is a real need to rethink the market failures of the information society and to reconsider the ways in which we might respond to those failures.

Indeed, we may need to go much further to reconsider our cultural biases. The privatization of broadcast media was a fencing of the commons, and it may be that common property management institutions rather than privatization would better serve the public and public policy needs, at least for some portions of the information and communications infrastructure.