Deregulation Of Cable Television

This book analyzes the effectiveness of the federal government's vacillating regulatory policy toward the cable television industry.

In 1984, Congress simultaneously eliminated state-local regulation of cable television rates and banned telephone companies from offering cable service in their own franchise areas. Five years later, the General Accounting Office discovered that basic cable rates had risen more than four times as rapidly as the overall consumer price level since rate deregulation. As a result, Congress began to move to reimpose cable rate regulation once again, finally succeeding (over President Bush's veto) in 1992. In this book, Robert Crandall and Harold Furchtgott-Roth examine the case of reregulating cable television and find that viewers gained far more than they lost during the brief deregulatory era because cable services expanded so rapidly in the deregulated environment. Moreover, they show that new technologies, such as direct-broadcast satellites, are likely to provide considerable market discipline for cable operators in the next few years, weakening any case for rate regulation. Given regulation's history of impeding innovation, they conclude that economic welfare is more likely to be enhanced by policies aimed at encouraging new entry into video services than by rate regulation.

This book identifies the major sources of competition to the cable television industry, such as telephone companies, direct broadcast satellite services, and traditional broadcasting stations.

Despite a political environment conducive to deregulation, television is one industry that consistently fails to loosen government's regulatory grip. To explain why, Lori A. Brainard explores the technological changes, industry structures and political dynamics which influence policy.

This book examines the case of reregulating cable television and shows that viewers gained far more than they lost during the brief deregulatory era because cable services expanded so rapidly in the deregulated environment.