Cable Television Rate Deregulation

Thomas Hazlett

International Journal of the Economics of Business, 1996, vol. 3, issue 2, 145-164

Abstract: In the 1984 Cable Communications Policy Act, cable television operators were effectively freed from rate regulation, and subsequently enjoyed monopoly franchise protection with free market pricing. In 1992, however, reregulation of basic cable service rates was established in the Cable Consumer Protection and Competition Act. The argument for reimposing regulation was that a substantial increase in basic cable rates had occurred post-deregulation. Yet the efficacy of rate controls upon an industry which has substantial freedom to adjust product quality is theoretically ambiguous. This study examines simple price, quality, and output evidence to determine how rate deregulation impacted consumers. It finds support for the view that rate controls did not lower quality-adjusted prices and are best explained as tools for influencing rent distribution across interest groups

Keywords: rate regulation; cable television; telecommunications policy; product quality, JEL classifications: 619, 635, (search for similar items in EconPapers)
Date: 1996
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DOI: 10.1080/758528450

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