MUST CARRY REGULATIONS FOR CABLE-TELEVISION SYSTEMS - AN EMPIRICAL-ANALYSIS

The 1992 Cable Act requires cable systems to carry local broadcasters. Noncarriage of local stations may represent an attempt by cable syste ms to disadvantage rivals, and thereby raise the prices of advertising and cable service. Alternatively, noncarriage might represent the eff icient replacement of low-valued channels with more highly-valued prog ramming. This study attempts to discriminate between these hypotheses with data on cable carriage decisions. The results support the efficie ncy hypothesis. Systems selling advertising are less likely to drop lo cal stations than nonadvertisers. Dropped stations tend to have low au dience ratings, and tend to originate in a different geographic market from the system.