Cable Television and the Question of Protecting Local Broadcasting

Proposed FCC regulations for protecting TV broadcasters from loss through cable TV competition would permit a limited number of distant signals to be cabled into large market areas, but only if commercial advertising carried by the distant originating stations were replaced by advertising sold by local stations whose market was penetrated. This study concludes that this plan is inadequate because (1) it does not offer protection in small markets where the threat of cable is most severe; (2) selling their own commercials on distant signals may overcompensate some local stations and undercompensate others; and (3) the plan might introduce undesirable incentives, since broadcasters would become increasingly dependent on revenues generated from advertising on distant signals rather than in doing an effective job of local broadcasting. If FCC protection is necessary, a better approach would involve requiring cable operators to compensate broadcasting stations for their actual audience losses caused by cable operations.