A simple model of television network competitive behavior is used to explore the prospects for new networks. Overall, the prospects are not very bright. A fourth network with complete, unhandicapped, nationwide coverage could coexist profitably with the existing three, but the industry would need a severe regulatory restructuring to make such a network possible. Most networks with incomplete coverage would not be profitable, including networks of existing independent stations, cable systems, new VHF "drop-in" stations (suggested by an Office of Telecommunications Policy report), or combinations of these. A pay-TV network on cable might or might not be profitable, depending critically on both the number of households reached by cable and the extent to which a charge discourages choice of pay programs over free programs. A network using existing independents plus new UHF stations constructed to give it nationwide coverage may become profitable as the UHF reception handicap continues to drop. 39 pp. Ref.
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