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NEW STUDY SAYS DAILY NEWSPAPERS HAVE STRANGLEHOLD ON LOCAL ADVERTISING RATES

 NEW STUDY SAYS DAILY NEWSPAPERS HAVE STRANGLEHOLD
 ON LOCAL ADVERTISING RATES
 WASHINGTON, March 19 /PRNewswire/ -- In cities where they have no competition, daily newspapers are able to -- and routinely do -- exert monopolistic pricing power over ad rates, a study released today demonstrates.
 The landmark study, conducted for the regional Bell telephone companies, shows that the increase in retail and classified advertising rates posted in those cities over the past five years isn't likely in the few remaining cities where newspapers have head-to-head local competition.
 "This study makes the case for competition in advertising, like the competition the regional Bell companies can bring to the public through information services, such as electronic yellow pages," said C. Richard Yarbrough, vice president public relations for BellSouth Corp., speaking for the seven regional Bell companies.
 "Small businesses and individual advertisers are the ones most likely to be hurt, because they are the ones who pay the price for classified advertising, either by direct payment for the ads or in increased prices for goods and services they buy through the want ads," he said.
 Conducted at the congressional district level, the study, "The Case for Local Competition," is being distributed on Capitol Hill as part of the effort by the regional Bell companies to demonstrate why legislation designed to block information services competition is against the public interest.
 The study demonstrates that daily monopoly papers raise their classified advertising rates on average between 26 percent to 45.9 percent faster than competitive papers, and raise daily retail advertising rates between 12 percent to 21.7 percent faster than their competitive counterparts.
 Prepared by Policy Communications, Inc., the study is the first of its kind done at the congressional district level.
 "We're talking about absolute pricing control. These newspapers can charge almost anything they want for daily retail advertising and the advertiser has no choice but to pay," said Yarbrough. "This stranglehold is particularly true for small businesses and individuals. It's not like you as an individual can buy an ad on television to try to sell your '88 Chevy."
 The study shows that the rapid increases in advertising rates by daily monopoly newspapers has been at the direct expense of small businesses and consumers. "It must be remembered, newspaper publishers are not in the news business, they're in the advertising business. Local regional phone companies could provide significantly more local advertising competition, thereby leading to lower costs and greater choices," Yarbrough said.
 "There are only 11 competitive daily newspaper cities left in America today; in all other cities, the newspaper functions as a monopoly and, therefore, an aggressive price raiser," stated William Lilley III, president of Policy Communications, Inc. "Just as it was with the newspaper fight against radio in the '30s, the newspaper legislative fight against the regional Bell companies is a fight about access to advertising revenues. The newspapers, particularly in classified ads, have a monopoly and they don't want competition."
 "The purpose of this study is to show how pervasive the daily newspaper monopoly pricing really is. Remember, nobody oversees the newspapers' rate increases; nobody looks at whether they are gouging their customers," said Yarbrough. "Until now, there's been an assumption that the competitive marketplace was taking care of that. Unfortunately, the competitive marketplace for daily newspapers has all but disappeared."
 The study analyzes the increase in local newspaper advertising prices for two overlapping time periods:
 -- The study contrasts how much newspaper retail advertising prices have risen in each congressional district compared to the increases in advertising prices for local radio and television stations; the period covered is 1980 to 1990.
 -- The study contrasts how much newspaper classified prices have risen in each congressional district compared to increases in prices for other goods and services sold in the district; the period covered is 1986 to 1991.
 -0- 3/19/92
 /CONTACT: Peter M. Lincoln, 202-955-3058, or Mike Brand, 312-750-5219, both of Ameritech; Larry Plumb of Bell Atlantic, 703-974-5446; Bill McCloskey, 202-463-4129, or Lois Phillips, 202-463-4131, both of BellSouth; Bob Jasinski of NYNEX, 202-416-0125; Janice Rylander of Pacific Telesis, 202-383-6431; Joyce Taylor of Southwestern Bell, 202-293-8553; Blair Johnson of U S WEST, 202-429-3105; or Valerie Christy of Fleishman-Hillard, 202-828-8820, for BellSouth/ CO: BellSouth Corp.; Policy Communications Inc. ST: IN: PUB SU: ECO


CK -- NY062 -- 9712 03/19/92 13:10 EST
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Date:Mar 19, 1992
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