PRICES AND OUTPUTS UNDER CABLE TV REREGULATION

Cable television reregulation in October 1992 did succeed in constrain ing subscriber bills about 9% below trend by October 1994. Yet, the gr owth rate of basic cable television subscribership fell sharply during the period of rate reductions. Only when real rates began rising in t he period following October 1994-after an explicit relaxation of contr ols-did reliable industry output measures return to the pre-regulation growth trend. These data suggest that rate regulation becomes substan tially less viable as the complexity of the regulated good increases.