Reading comprehension Home Exercise- 11 PASSAGE A

First, AOL and Time Warner announced their intention to combine. Then came Time Warner/ EMI and Tribune / Times Mirror. Even more significant, however, has been the speculation that these mergers have caused. If these transactions are consummated, a large number of additional media mergers are expected. There is even the possibility of a nightmare scenario- a wave of media mergers so large that within a decade most of our information will be supplied by perhaps six of these huge conglomerates and a fringe of much smaller firms.

It’s time to ask two critical questions. Is this kind of media oligopoly what we, as a society, want? And if not, can the antitrust laws effectively prevent the threatened merger wave? The answer t the first question is clear. We do not want a media oligopoly. The answer to the second question, however, is far less certain. We should distrust a media oligopoly because it would give undue control to a small number of individuals. This need not manifest itself in a price rise for the daily newspaper or AOL’s monthly fee. Rather, it could consist of a change in editorial viewpoints a shift n the relative prominence of links to certain websites or a decision not to cover certain topics, because they are not “newsworthy”. These problems could exist without any improper intent on the part of the media barons. Even if they try to be fair and objective, they will necessarily bring their own worldview to the job. And in time, some of these conglomerates may be controlled by people who are to fair or objective.

At first it might appear that the antitrust laws are of little help in grappling with the issues presented by large media mergers. The anti- merger laws are commonly understood as protecting price competition and a relatively small number of firms- to greatly oversimplify let’s say at most half a dozen – are normally though to be enough to keep a market  price –competitive . In industry after industry, firms merge until there is only a handful left, and the antitrust enforcers are normally unable to do anything to prevent this.  (In former years mergers were governed by an “incipiency “standard that prevented mergers and merger wave’s well before they would have led to very large or likely anti- competitive problems.) Even if a handful of firms are enough to ensure effective competition in most industries, would six conglomerate media firms be sufficient for the diversity of viewpoints necessary to democracy? Would we be reassured if they could somehow guarantee that they would sell their magazines and internet advertisements at competitive prices?

I am hopeful that the antitrust laws, if correctly and vigorously interpreted are adaptable enough to meet this challenge. This is because antitrust is not exclusively about price. It is essentially about choice- about giving consumers a competitive range of options in the marketplace so that they can make their own, effective selection from the market’s offerings. Consumers should be able to make their choice along any dimension important to them- including price, variety and editorial viewpoint.

Competition in terms of editorial viewpoint or gate-keeping can be guaranteed only by  ensuring that  a media market contains a significantly larger number of firms than is required for price competition in other, more conventional markets .it is unclear, however, whether this interpretation of the anti-trust laws will be applied by the enforcement agencies and the courts. What is needed therefore is a much more careful look at the challenges that will be raised by future media mergers.

1.       A wave of media mergers could

A.      Be a threat to democracy

B.      Result in limiting editorial viewpoints

C.      Result in misuse of certain laws

D.      Both (A) and (B)

2.       According to the passage what could be the most significant outcome of media oligopoly?

A.       An increase in the cost of newspapers

B.      The fact that in the long run, there will be a shift of power to people who might not be balanced and fair in the way they deal with the media

C.      Certain websites may get more prominence than others

D.      There will be no competition among the newspapers

3.       Which of the following statements, according to the author, are true?

a.       Half a dozen firms are enough to keep the market price – competitive

b.      Half a dozen companies are not enough to provide a democratic media

c.       Enforcement agencies may not interpret the anti- trust laws correctly

d.      Half a dozen companies will be inadequate to meet the consumer demand for product diversity

A.      A ,b

B.      A, b, c

C.      A, b, c, d

D.      B, c, d

4.       The current anti- trust laws

A.      Are not sufficient to deal with issues relating to large scale media mergers

B.      Can prevent mergers form happening

C.      Will be effective if properly interpreted

D.      Favour a particular company or group of companies

5.       To get a clear picture of the challenges posed by media mergers, the author recommends:

A.      Creation of strict laws

B.      Strengthening the enforcement agencies

C.      Creation of a study committee by the congress

D.      None of the above

Answer:

1.       D   The author talks about the necessity of diversity of viewpoints being essential for democracy. Therefore a lack of it could be a threat to democracy. So A can be inferred. Choice B is clearly mentioned in the passage. Choice C cannot be inferred from the passage. Choice D is the correct answer.

2.       B in the last line of the third paragraph the author voices the contents of choice B as the serious threat to medical oligopoly. While the author refers to the possibility of only six conglomerates, he uses the number six figuratively and not factually. Choice B.

3.       C   in the third paragraph, the author answers that media mergers may not results in prices increasing. Statement (a) is mentioned. In the same paragraph, he clearly puts forth the case that the oligopoly will not be able to provide a democratic media. And in the sixth paragraph, the author mentions statement (C) and (D) choice C is correct.

4.        C      In the first line of the fifth paragraph, the author mentions that the existing antitrust laws, if interpreted properly, are adequate to meet the media merger challenge. Choice C.

5.       C   The last paragraph f the passage provides a clear suggestion choice C is correct.