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Horizontal Concentration and Vertical Integration in the Cable Television Industry

Horizontal Concentration and Vertical Integration in the Cable Television Industry In the recent past, the cable industry has exhibited a pronounced tendency toward increased vertical integration and concentration of cable system ownership. As a result, the 1992 Cable Act proposed and the Federal Communications Commission implemented restrictions on such activity. Two antitrust concerns include the size of programming discounts offered to large multiple-system operators and price and carriage discrimination by vertically integrated programming networks. The empirical model in this paper attempts to systematically measure the effect of ownership concentration and vertical integration on the programming cost and price of cable operators. We find that concentration and integration lower the programming cost to cable systems affiliated with larger multiple-system operators. These discounts are partially passed along to consumers in the form of lower prices. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Horizontal Concentration and Vertical Integration in the Cable Television Industry

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References (36)

Publisher
Springer Journals
Copyright
Copyright © 1997 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
DOI
10.1023/A:1007742414944
Publisher site
See Article on Publisher Site

Abstract

In the recent past, the cable industry has exhibited a pronounced tendency toward increased vertical integration and concentration of cable system ownership. As a result, the 1992 Cable Act proposed and the Federal Communications Commission implemented restrictions on such activity. Two antitrust concerns include the size of programming discounts offered to large multiple-system operators and price and carriage discrimination by vertically integrated programming networks. The empirical model in this paper attempts to systematically measure the effect of ownership concentration and vertical integration on the programming cost and price of cable operators. We find that concentration and integration lower the programming cost to cable systems affiliated with larger multiple-system operators. These discounts are partially passed along to consumers in the form of lower prices.

Journal

Review of Industrial Organization – Springer Journals

Published: Sep 29, 2004

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