Dimensions: 6.5'' x 9.25'' AEI Press  (Washington) Publication Date: November 1997 Hardcover ISBN: 0844740691 Price: $ 32.50 Add to Cart   Examination Copies

Few consumer issues have been so gnawing in the 1980s and 1990s as the question of cable television rates. Congress deregulated cable rates in 1984, then reregulated them in 1992, and then de-reregulated them in 1996. Now, in 1998, yet another round of controls has been discussed. Why the confusion? Can anyone explain what is happening with cable rates?

This volume examines the effect of rate regulation in cable television and focuses on the impact of price controls on consumer welfare. The authors find that rate regulation in cable television has affected consumers in a number of significant ways, though not always in accord with common expectations or popular conclusions. Deregulation following the 1984 Cable Act lef not to a fly-up in rates but to price increases driven by--and commensurate with--quality upgrades in the cable television package. Reregulation following the Cable Television Consumer Protection and Competition Act of 1992, after a false start in 1993, did effectively constrain cable rates by about 8 to 10 percent in 1994. The reregulation of cable, however, was accompanied by a dramatic drop in viewer ratings for basic cable program services, which suggests a loss of quality in the eyes of consumers.

Thomas W. Hazlett is a professor of agricultural and resource economics at the University of California-Davis. Matthew L. Spitzer is the William T. Dalessi Professor of Law at the University of Southern California.