Vertical integration and the must carry rules in the cable television industry:
An empirical analysis
Abstract
Using historical industry data, this study empirically tests the effects of vertical
integration and other system-specific, station-specific and market-specific variables on
cable operators’ carriage decisions regarding local television stations in 1991, a time
when the must carry rules were not in effect. Contrary to an anticompetitive explanation
for carriage denials, the logit analysis found that vertical integration in the cable industry
did not have a significantly negative effect on cable system carriage of local stations,
holding other factors constant. Other results from the study indicate that stations more
likely to be denied carriage by cable systems were those with lower viewing shares,
young, independent and originating from a distance. While the study raised concerns
about the negative impact of non-carriage instances on small independent stations and in
smaller markets, the findings generally support the notion that cable’s local station
carriage decisions were more a result of efficient than anti-competitive motives.
Convention