Wednesday, September 4, 2019
Is The Canadian Cable Television Industry a Natural Monopoly :: essays research papers
Chapter     Outline Preface     Chapter     Title     Page Preface          Outline     1 I          Introduction     2      A     The Canadian Cable Television Industry     2 II          Details     3      A     Model     3      B     Data     4 III          Externality Effect     10 III          Comparison with Telephone Industry     12 IV          References     14 Table     Title     Page 1.1          2003 Market Share of Canadian Cable Companies.     2 2.1          Canadian Cable Industry     5 2.2          Rogers Communications Incorporation     7 2.3          Shaw Communications Incorporation     8 2.4          Cogeco Cable Company     9 3.1          Marginal Private Benefit     11 3.2          Marginal Private Cost     11 3.3          Demand Schedule of the market     12 Figure     Title     Page 1.1          2003 Market Share of Canadian Cable Companies.     2 2.1          Conventional Depiction of Natural Monopoly     4 2.2          Measurement of Possibility of Natural Monopoly     5 2.3          Canadian Cable Television Indusry     6 2.4          Rogers Communications Incorporations     7 2.5          Shaw Communications Incorporation     8 2.6          Cogeco Cable Company     10 3.1          Externality Effect of Regulation of Cable Industry     12 Chapter     Introduction 1     A. THE CANADIAN CABLE TELEVISION INDUSTRY It all started back in 1981 when Vidà ©otron Ltà ©e and La Presse introduce the first electronic newspaper via cable in Montreal. One year later, The Canadian Radio-television Commission licensed Canada's first pay services and 58% of home televisions were connected to the cable television. The majority of industry members have formed an association the CCTA – Canadian Cable Televisions Association, to have a unified word when facing regulators, help promote the industry’s services. Table 1.1 and figure 1.1 show that CCTA have through its members a control over more than 70% of the Canadian cable services. Table 1.1          Market Control (2003) ROGERS      30.30% SHAW      27.20% COGECO      11.20% EASTLINK      3.20% ACCESS      1.00% MONARCH      0.80% OTHER*      26.40% TOTAL      100% *less than 50,000 customers each Figure 1.1     2003 Market share of Canadian Cable Companies Since its inception, cable television service has been subject of substantial intervention on the part of regulators in Canada. The Cable television operators are licensed by a single federal regulatory authority, the CRTC. It classifies Licensed Service Areas (LSA) based partly on the current subscription level within the LSA and partly on the quality of broadcast reception available to the service provider. The issues to be addressed in this paper are the following:      Was the enforced monopoly provision of basic cable television justified? Chapter     Details 2     A. MODEL When a monopoly occurs because it is more efficient for one firm to serve an entire market than for two or more firms to do so, because of the sort of economies of scales available in that market. A common example is water distribution, in which the main cost is laying a network of pipes to deliver water. One firm can do the job at a lower average cost per customer than two firms with competing networks of pipes. Monopolies can arise unnaturally by a firm acquiring sole ownership of a resource that is essential to the production of a good or service, or by a government granting a firm the legal right to be the sole producer. Other unnatural monopolies occur when a firm is much more efficient than its rivals for reasons other than economies of scale.
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