Is The Canadian Cable Television Industry a Natural Monopoly :: essays research papers

ChapterOutlinePrefaceChapterTitlePagePrefaceOutline1IIntroduction2AThe Canadian lineage Television Industry2IIDetails3AModel3BData4IIIExternality Effect10IIIComparison with Telephone Industry12IVReferences14TableTitlePage1.12003 securities industry Share of Canadian cablegram Companies.22.1Canadian Cable Industry52.2Rogers Communications Incorporation72.3Shaw Communications Incorporation82.4Cogeco Cable Company93.1Marginal Private Benefit113.2Marginal Private Cost113.3Demand Schedule of the market12 directTitlePage1.12003 Market Share of Canadian Cable Companies.22.1Conventional Depiction of Natural Monopoly42.2Measurement of Possibility of Natural Monopoly52.3Canadian Cable Television Indusry62.4Rogers Communications Incorporations72.5Shaw Communications Incorporation82.6Cogeco Cable Company103.1Externality Effect of code of Cable Industry12ChapterIntroduction1A. THE CANADIAN CABLE TELEVISION INDUSTRYIt all started back in 1981 when Vidotron Lte and La Presse affirm the first electronic newspaper via wire in Montreal. adept year later, The Canadian Radio-television Commission licensed Canadas first pay services and 58% of inhabitancy televisions were connected to the cable television.The majority of industry members have formed an association the CCTA Canadian Cable Televisions Association, to have a unified word when facing regulators, alleviate promote the industrys services. Table 1.1 and figure 1.1 show that CCTA have through its members a control over more than 70% of the Canadian cable services.Table 1.1Market Control (2003)ROGERS 30.30%SHAW 27.20%COGECO 11.20%EASTLINK 3.20%ACCESS 1.00%MONARCH 0.80%OTHER* 26.40%TOTAL 100%*less than 50,000 customers eachFigure 1.12003 Market share of Canadian Cable CompaniesSince its inception, cable television service has been subject of substantial intervention on the part of regulators in Canada. The Cable television operators are licensed by a single federal regulatory authority, the CRTC. It classifies Lic ensed Service Areas (LSA) based partly on the current subscription level within the LSA and partly on the quality of send off reception available to the service provider.The issues to be addressed in this paper are the following&61607Was the enforced monopoly provision of basic cable television justify?ChapterDetails2A. MODELWhen a monopoly occurs because it is more effectual for one firm to serve an entire market than for two or more firms to do so, because of the sort of economies of scales available in that market. A common example is water distribution, in which the main cost is laying a network of pipes to deliver water.One firm can do the job at a lower average cost per customer than two firms with competing networks of pipes. Monopolies can arise unnaturally by a firm acquiring sole ownership of a resource that is essential to the production of a good or service, or by a government granting a firm the legal right to be the sole producer. Other unnatural monopolies occur whe n a firm is much more efficient than its rivals for reasons other than economies of scale.