Estimating the Economic Benefits from Increased Competition in Wired Video Delivery.

Competition to cable television as the dominant means of delivering video programming via wired infrastructures to the home is starting to emerge in several countries. A few areas have competitive overbuilds and in others innovative broadband service providers (BSPs) are using digital systems to deliver video services. The recent emergence of IPbased video technologies and BSPs has provided the technological basis for competition, but legacy regulatory structures often remain in place.

This paper shows how business data on cable television demand—including packages, pricing, and market penetration—can be combined with economic models to estimate the gains to consumers from the emerging competition. Among the research questions are:

1. From where will the subscribers to new wired video competitors come?
2. How are program offerings and prices likely to change with the introduction of wired video competition?
3. What are the expected changes in subscription fees, revenues, and franchise fees?