THE DEMAND TO REGULATE FRANCHISE MONOPOLY: EVIDENCE FROM CATV RATE DEREGULATION IN CALIFORNIA

The motivation to price control a franchise monopoly is examined in the context of three distinct economic views of regulatory behavior. These views are tested against data from the California cable television market, over the years 1980–85, during which a subset of monopoly firms converted from reg...

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Bibliographic Details
Published in:Economic inquiry 1991-04, Vol.29 (2), p.275-296
Main Author: Hazlett, Thomas W.
Format: Article
Language:English
Subjects:
Cable television
Cable television broadcasting industry
Cable television industry
Cable TV
California
Comparative studies
Deregulation
Economic aspects
Economic models
Economic statistics
Economic theory
Effects
Franchises
Franchising
Industrial policy
Laws, regulations and rules
Monopolies
Monopolistic competition
Price increases
Regulation
Statistical analysis
Wage & price controls
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Summary:The motivation to price control a franchise monopoly is examined in the context of three distinct economic views of regulatory behavior. These views are tested against data from the California cable television market, over the years 1980–85, during which a subset of monopoly firms converted from regulated to unregulated pricing for basic cable service. As the price constraints of regulation appear to be insignificant in a welfare analysis, the demand for such controls by municipalities is derived from their utility in enforcing vote‐maximizing transfer schemes–a Peltzmanian political outcome with a Stiglerian economic welfare result.
ISSN:0095-2583
1465-7295
DOI:10.1111/j.1465-7295.1991.tb01271.x