Cable Television

The Problem of Local Monopoly

by R. A. Posner


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This study probes advantages and disadvantages of alternative forms of local cable television regulation. With the scramble among cable operators for municipal franchises growing, so is concern about local monopoly — the potential for abridging the public interest through excessively high subscriber fees and direct channeling of huge profits into the hands of cable companies who successfully compete for the right to "wire up" individual communities. Among variants of the franchise approach discussed: city governments could require reasonable subscription fees, place a ceiling on profits, or require a suitable array of services. The author urges a period of experimentation with a variety of the options available for both preventing monopoly prices and capturing monopoly profits for the public — and, because of current uncertainty over future CATV characteristics, for examining the actual extent of the monopoly problem.

This report is part of the RAND Corporation Research memorandum series. The Research Memorandum was a product of the RAND Corporation from 1948 to 1973 that represented working papers meant to report current results of RAND research to appropriate audiences.

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