Rent-seeking in the telco/ cable cross-ownership controversy

Thomas W. Hazlett

Telecommunications Policy, 1990, vol. 14, issue 5, 425-433

Abstract: Probable effects of policy reform are thought to be observable through critical evaluation of interest group positioning in the competition to gain favourable public policies. In the current debate in the USA regarding possible elimination of the cable/telco cross-ownership restrictions, strong positions have been taken by several interested parties. By examining the economic interests implied by the official policy endorsements of the telcos, cable firms, broadcasters and municipalities, it is concluded that telco entry into video markets offers the possibility of significantly enhanced efficiency and consumer choice in local cable television markets. Such access will not be achieved, however, without significant rent-defending measures by incumbent cable television operators, prompted by the dilution of industry profits protected by current entry barriers in the cable television marketplace.

Date: 1990
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