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The Fallacy of Regulatory Symmetry: An Economic Analysis of the ‘Level Playing Field’ in Cable TV Franchising Statutes

Published online by Cambridge University Press:  20 January 2017

Thomas W. Hazlett  and
George S. Ford
Thomas W. Hazlett*
Affiliation:
American Enterprise Institute, Z-Tel Communications
George S. Ford*
Affiliation:
American Enterprise Institute, Z-Tel Communications
*
American Enterprise Institute, 1150 Seventeenth St., NW, Washington DC 20036. E-mail: thazlett@aei.org.
Z-Tel Communications, 601 S. Harbour Island Blvd., Suite 220, Tampa FL 33602. E-mail: gford@z-tel.com.
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Abstract

Formal regulatory parity can entail counterintuitive effects. In a series of state statutes, municipal governments have been directed to issue cable TV franchises to new competitors only after (a) formal hearings considering the ‘public interest’ in competition; and (b) imposing terms and conditions which are at least as burdensome as those contained in the incumbent's franchise. While billed as ‘level playing field’ laws, economic theory, an important case study in Connecticut, and a probit analysis of Ameritech's cable franchise acquisition strategy suggest that these statutes actually tilt the field against entrants.

Type
Research Article
Information
Business and Politics , Volume 3 , Issue 1 , April 2001 , pp. 21 - 46
Copyright
Copyright © V.K. Aggarwal 2001 and published under exclusive license to Cambridge University Press 

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