FCC has recently been considering the issue of of of the broadcast media. This issue stems in part from the belief that the present degree of concentration adversely affects competition in the markets for time. This implies that the distribution of ownership affects the price of time, or stated differently, the price of TV audiences. FCC is mainly concerned with the substantial control of TV licenses by newspapers and radio stations in the same market areas, and with the extent of group ownership of stations particularly in the largest fifty markets where group ownership is felt to be excessive. As a result, it began to exercise its right to question license transfers and renewals which perpetuated or increased undue concentration of ownership, and in its 1965 policy statement indicated its intent to give greater weight to diversity of ownership when determining license grants through comparative hearings. Most concretely, the FCC has adopted a rule forbidding any party from holding more than one full-time broadcast license in any market. This rule did not require divestiture and under pressure from the Department of Justice, the FCC is now considering requiring licensees to reduce their holdings in any market to an AM-FM combination, a TV station or a newspaper. But in all these deliberations the underlying approach has been to assert that concentration is too great without specifying what adverse effects it has, or how changes in ownership would affect them. I first consider group ownership. fixed number of TV stations in a given market area might collude in order to restrict the supply of audiences or to facilitate price discrimination. I have found no evidence of discrimination in the sale of time.' Therefore, it is my view that collusion would only occur to restrict the supply of audiences. question then becomes what difference would group ownersip make, since in any given market, only one TV station can be owned by a single licensee. One could argue that group ownership reduces the costs of collusion and thus increases its likelihood. For example, group ownership increases the probability that in any market two or more firms meet in some other market. If collusion is more likely where an arrangement covers more *I thank Professor R. H. Coase and Richard 0. Zerbe for helpful comments. sources of information for this study are as follows: the 1967 market rankings, the number of TV stations by market in 1967, and the prices of time were obtained from Spot Television Rates and Data, Apr. 15, 1967, vol. 49, No. 4; the number, location and circulation of newspaper firms from Ayer Directory of Newspapers and Periodicals, 1968; audience sizes from American Research Bureau, Day-Part Television Audience Summary, Feb./Mar., 1967; the ownership of stations from Broadcasting Yearbook Issue, 1968 and Hearings on S. 1312 Before the Subcomm. on Antitrust and Monopoly of the Senate Comm. on the Judiciary, 90th Cong., 2d Sess., pt. 7, at 3303-60; the number of radio stations from Broadcasting, Feb. 10, 1969, at 45-59. All measures of the number of TV stations exclude, whereas audience measures for each TV station include, owned booster and satellite facilities. Because of the length of the original manuscript, it was cut by the editor. 1 See, Peterman, The Clorox Case and the Television Rate Structures, 11 J. Law & Econ. 321 (1968).