《CABLE TV REGULATION OR COMPETITION?》

1. The Evolution of Cable Television1

The Early History1

From Community Access Television to Cablecasting4

The Changing Structure of Cable Television9

Cable Television and the Information Superhighway18

Cable Growth though New Services19

The Outlook22

2. Cable Rate Regulation24

The Rationale for Rate Regulation25

Regulating the Cable “Monopoly”33

The Telecommunications Act of 199647

Regulation before 198435

The 1992 Cable Act37

Regulating the Competitors45

The Telecommunications Act of 199647

Conclusion48

3. Effects on Consumers of Changes in Cable Service49

Consumer Demand for Cable Service49

A Multinomial Logit Model of the Demand for Cable Service50

Changes in Consumer Welfare51

The Change in Economic Welfare since 1983-8457

Price Sensitivity of Demand59

Has Deregulation Improved Consumer Welfare?62

Deregulation and Capital Investment in Cable Television64

The Exercise of Market Power64

Conclusion67

4. The Cable Industry under Regulation69

Cable Company Common Equities70

Cable Company Acquisition Prices73

Subscriber Rates75

Output and Program Quality78

Investment in Cable Companies81

Conclusion82

5. Effective Competition?84

Competition among Cable Companies84

Competition from Telephone Companies86

Competition from Direct Broadcast Satellites91

Competition from Wireless Cable93

One-Way Video or the Information Superhighway?95

Effects on Cable System Equities and Acquisition Prices96

Conclusion97

6. Where Do We Go from Here?99

Competition as a Substitute for Rate Regulation100

Coping with Regulation102

Conclusion105

Appendix A: Estimation of Demand for Cable Television Based on Cable System Data107

Appendix B: Estimation of Demand for Cable Television Based on Household Data123

Index157