The Cable/Telco Cross-Ownership Regulation in the U.S.: A Historical Study


Mei-Man Chang


The purpose of this study is to trace back the cable/telco cross ownership regulation in the United States. In 1970,Dominant local telephone companies were prohibited from providing video program ming to subscribers in their telephone service areas since the ban on cable-telephone cross- ownership by FCC. According to the FCC, the telephone companies had the incentive to extend their regulated telephone monopoly into the area of CATV service by anticompetitive behavior, such as discriminatory pole attachment and cross-subsidization.

Ending a lengthy legal battle, the Telecommunications Act of 1996 formally repealed the ban on February 8 in 1996 signed by President Clinton. Cable television operators are free to enter into the larger telecommunications market, but may face stiff competition from local telephone companies. The 1996 Act, however, still generally prohibits acquisitions and joint ventures between cable operators and local telephone companies within their respective service areas for keeping market competition.

In order to understand the regulatory policy-making process in the U.S., argument and comments from the FCC, the Congress, the White House, the courts, citizen groups, and the regulated industries are all good study resources for this study. This study finds that as far as the U.S. authorities are concerned, the antitrust policy has never been given up.