Vertical Foreclosure in Video Programming Markets: Implications for Cable Operators
Review of Network Economics, Vol. 6, pp. 348-371, 2007
24 Pages Posted: 1 Aug 2007 Last revised: 2 Nov 2009
This paper argues that a cable operator with sufficient market power in the downstream multi-channel video programming distribution (MVPD) market can deny access to unaffiliated programmers, resulting in an upstream programming rival's exit or impaired dynamic efficiency. Further, market dominance by cable operators may harm consumers of video programming through higher prices and less choice in the downstream MVPD market. The reason is that as unaffiliated video programming becomes affiliated programming, the latter is then withheld from rival MVPDs. This analysis is then applied to the recent acquisition of Adelphia by Comcast and Time Warner.
Keywords: Vertical foreclosure, video programming markets, cable operators, multi-channel video programming distribution, unaffiliated video programming, Adelphia, Comcast, TimeWarner
JEL Classification: K21, L42, L51, L96, L82
Suggested Citation: Suggested Citation