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Legals Rate Regulation BandAid Not Cure!

In Uncategorized on November 17, 2009 at 2:23 pm

After decades of charging the highest legal advertising rates in the nation, now faced with legislative resolve and the prospect of bona fide print competition and the reality of the digital future, the Monopoly Lobby is “Compromising” with a topical treatment for an internal disease. Rate regulation is barely a BandAid for all that plagues the legal advertising system in our Commonwealth. Here are 3 reasons this scheme falls short of real reform:

 

1. It does nothing to address the loss of over 175 paid newspapers and millions of readers since Title 45 was last revised in 1976. The collapse of competition is the single greatest factor enabling widespread profiteering. And the demonstrable declines in circulation withhold notice from the vast majority of the intended audience.

 

2. Competition drives rates lower than mere regulation. Philadelphia v. Camden is the ultimate example: Competition inspired the same publication to underbid New Jersey’s regulated rates, while keeping those it charges Philadelphia as high as it pleases in the absence of legal challengers. The factor is a shocking 63 to 1 savings — or gouging — depending on the side of the Delaware River. Zero competition enables $17.79 per line, while real competition drives offers to provide that service for $00.24 per line! SEE: FOOTNOTE #4

 

3. Rate regulation is practically unenforceable. Newspapers are not subject to Open Records Law, the myriad rates in effect are not transparent and the preferred rates negotiated with select advertisers are closely guarded. And once again, the negotiated rates are given to advertisers that can shop around, that leverage the force driving the bargain. There is no public database of rates in effect, the example below is available to the most sophisticated advertisers, for a price. Even if the state were to tackle the issue of rate transparency, looking below which rate would it mandate as the basis for Legal Advertising? There are nearly two dozen different rates in effect, all for the same ink on the same pulp, in the same section of line ads. Would PA choose the Sex Lines rate which is nearly half the PA Government rate, or would it rather get the New Jersey deal that was inspired by competition? Please note that such secret rates are not disclosed even to proprietary database subscribers.

 

For these compelling reasons we urge the House to reject the BandAid of Rate Regulation, and ask that the cure be comprehensive reform. And as we’ve shown over and again with our Exhibits of Rates and Circulations across the Commonwealth, competition from well-established free Community Papers should be a critical component of any final Legal Advertising Reform product.

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