A model is constructed to assess the potential impact of unrestricted cable television growth on broadcasting. A very strong set of distant signals is assumed, and cable penetration is assumed to reach ultimate levels. Federal Communications Commission (FCC) policy has been to protect the stations in larger (top 100) markets, particularly struggling nonnetwork UHF stations, by restricting cable growth in these markets. Results from the model indicate that concern over the impact of cable is misdirected on several counts: (1) Reduction in aggregate station revenue due to cable is small enough to be balanced by one year's typical revenue growth. (2) Stations in larger markets, now sheltered by FCC policy, would on average be little hurt by unrestricted cable growth. (3) Stations in smaller markets, for which FCC policy now provides no protection, would suffer severe revenue reduction due to cable at ultimate penetration. (4) At least through the 1970s, nonnetwork UHF stations stand to gain substantially from cable growth, because cable puts them on the same technical footing as competing VHF stations. 10 pp.
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