The purposes of this study are focused on the telecommunications regulation in the United States, which are aimed to analysis 1) the cable-telephone company cross-ownership policy tools; 2)the anti-trust concepts implied in these policy tools; 3) the effect of these policy tools.
Telephone company provision of cable television service has concerned the Federal Communications Commission (FCC) for over two decades. In 1970, the FCC banned telephone companies and their affiliates from providing CATV service within their telephone service areas. Congress then in 1984, passed the Cable Communications Policy Act of 1984. Section 613(b) of the 1984 Act, codified at 47 U.S.C. section 533 (b), made the FCC‘s ban statutory. Ending a lengthy legal battle, on February 8, 1996, the Telecommunications Act of 1996 eliminated the ban on cable-telephone cross-ownership. Base on the industry enviornment analysis, the study found that the growth of the cable industry since 1970 mitigated the danger that the telephone compay could exclude independent cable television operators from the cable market. Like the telephone companies, cable operators enjoyed a virtual monopoly in their service areas prior to the 1996 Act. So, in 1990s, it is time for regulators to introduce telephone companies to participate in cable services market competition. Now the regulators in Taiwan also want to adopt the open-market-based approach to the cable/telco industries. Owing to the U.S.A. regulatory experience, we must take the cable and telcos industries enviornment into accout, make detailed assessment and then with fair and reasonable steps to let them get mergers.
According to the historical regulation in the United States, the study pointed out six kind of policy tools which are as follows: "market entry barriers", "the standard of effective competition", "the franchise requirement", "weaver", "other safeguards" and "prohibition on buy outs". Fearing of the cable/telco mergers would have no or little effect on actual competition, the last one is the best way for Taiwan policy-makers to learn. So industry convergence may have some benefits under anti-trust and anti-competition rules.