The Federal Communications Commission, hoping "to get cable moving without jeopardizing over-the-air broadcasting," recently proposed rules that would allow cable systems in the 100 largest television markets to carry a limited number of distant signals. To assess the effect of the proposed rules, a nonlinear model of cable penetration is estimated using a sample of 63 cable systems located where several signals can be received over the air with no particular reception problems. Applying the model to some typical top-100 market situations, this report concludes that the proposed rules will meet the Commission's objective. But more is necessary to keep cable moving, because the rules by themselves are probably not sufficient to make cable profitable in most of the top-100 markets. To succeed in the cities, cable must attract customers with new services in addition to the traditional package of better reception plus distant signals.
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