PUBLIC SERVICE BROADCASTING - else.econ.ucl.ac.uk.pdfVIP

1 PUBLIC SERVICE BROADCASTING Mark Armstrong University College London March 2005: final version July 2005 Abstract This essay discusses the merits of public intervention in the provision of television broadcasting services. I argue that intervention was justified in the past, when there were just a few channels and when advertising was the sole source of commercial funds. However, the advent of subscription television overcomes many of the market failures which once existed. Moreover, asymmetric treatment of broadcasters acts to distort the incentives of commercial broadcasters. Finally, viewers have an increasing ability to avoid unappealing, but perhaps socially desirable, content, which further weakens the case for public intervention in the market. 1. The Historical Context In this essay I wish to discuss three questions about the provision of television broadcasting in the modern age:2 1. Will the broadcasting market deliver what people want to watch? 2. Should people be allowed to watch only what they want to watch? 3. If not, will people watch what we want them to watch? I start with the second question and consider whether broadcasting policy should be directed to “give the public what it wants”? In the UK, the tone of the debate about public service broadcasting was set in the earlier radio era. John Reith, the first Director General