Donald Boudreaux, Robert Ekelund, University We, Richard Bell, Karol Ceplo, Ceorge Ford, Tom Hazlett, John Jackson, David Kasennan, Roger Melners, Bob Tothson, Bruce Yandle
1994 Cato Journal   unpublished
Congress enacted the "Cable Television Consumer Protection and Competition Act of 1992" over the veto of President George Bush.' This act purports "to provide increased consumer protection and to promote increased competition in the cable television and related markets." We here analyze some important economic implications of the act. Our analysis of cable-television history (especially the brief period ofderegulation, 1984-92) and ofthe contents and amendments of the new act indicate that the
more » ... chievement of public-interest goals is most unlikely. The Cable Act of 1992 admits self-interested outsiders (mainly, broadcasters in competition with cable operators, along with municipal tax collectors) to the profits generated by the supply of cable TV services. Further, the act will redistribute the profits of local cable companies by changing property-rights assignments without fostering new competition. Whetherthe nominal price of some homogeneous unit of cable services rises or falls, we argue that service quality (including the introduction ofnewtechnologies and products) will decline over time. Following a reviewof the period of cable deregulation, this article treats two major aspects of the 1992 Cable Act. These are (1) the reinstitution of rate regulation at the municipal level of government an anonymous referee for constructive discussions and comments. The National Chamber Foundation and the Center for Policy Studies provided much-appreciated financial support for our work 'This act (P.L 10-385) is codified at 47 U.S.C., Sections 521-609. 87