The Study On Development Of Cable Industry And Regulation In China

In the past three decades, the market model of cable industry has experienced from the natural monopoly, to the regulatory monopoly, and then to the regulatory competition. Cable industry itself has become a vertical integration of production and broadcast and provides a variety of digital services, which is facing a growing number of competitors. Meanwhile, since policy has played a crucial impact on the development of cable industry which is an integration of economic and political, the formation and development of cable industry is led from the interaction of technology and regulation both in America and Europe and in China, India and other developing countries. In 2010, as Chinese government reviewed and approved the plan of promotion of triply play, triply play in China has entered a substantive process, which provide a strategic opportunity for the relative industries, especially for the cable industry.In China, compared with telecommunication and internet which began the process of market and regulator reform as early as 1990s, the development of cable industry is relative lagging. Not only does the market of cable have competitor, and do not have a reasonable regulatory agencies. On the other hand, the innovation of digital and broadband technology continually expand the breadth and depth of convergence, which make a new competitive landscape and market environment of cable industry. In this context, which extent does the cable industry in? How to find the effective path to improve China’s cable industry? What impact does the existing regulatory policies on the development of cable industry? How to implement the existing policies to achieve the regulatory objections? These answers to the series of questions have a significant guidance for the development of China’s cable industry.In the view of this, besed on the characteristics and evolution of natural monopoly of cable industry, and the summary of the reason, content and measures in regulation, this paper is going to analysis the development of cable industry in two aspects. First, from the insights of cable industry itself, this paper divides cable industry into production section and broadcast section, adopts network DEA model to examine the overall efficiency of China’s cable industry as well as the sub-section efficiencies, and determine the trend of cable industry efficiency. And then, the study uses Tobit model to analyze the factors which affect the efficiency, looks to the improvement of cable industry development. Second, from the perspective of government, the study compared to the cable industry in U.S., the study discusses the evolution and influence of regulation in China’s cable industry by adopting the consequence model of media landscape market as an analytical framework. And then, taking the triple play as the research objection, this paper theoretically discusses the change of producer surplus and consumer welfare before and after the triple play based the theory of supply-demand and game theory model, then builds difference-in-differences model to measure the impact of triply paly on cable industry based on the date from 2010-2012, and analyzes the timeliness of the effect, providing government data support to carry out the regulation effectively to improve the cable industry.The results show that:from the insight of cable industry itself:(1) The trend of China’s cable industry efficiency is rising by years in the period, however, there also exists improval rooms in the usage of resources effiency and production scle expandance for the perspective of the level of efficiency. In addition, the reason of efficiency growing is mainly due to the technological advances. (2) As an integration industry of production and broadcast, the average efficiency of production section which is an intellectual labor-intensive is more variable than the average efficiency of broadcast section which is a standardized technology sector, and the differences of natural resource and geographical features have a significant impact on the cable industry efficiency. (3) Natural and administrative monopoly will impede the improvement of economic efficiency in cable industry, whereas intensive substitutive competition and price is the major factors to promote the economic efficiency. In addition, the level of information development has a very limited impact on efficiency growth, and other environment factors have a significant influence for economic efficiency of cable industry. From the perspective of govement policy:(4) Only advocating competition will not lead to a positive change for the market. There will be led to a higher market power because of the large-scale mergers and acquisitions. On the other hand, in order to achieve the foal of regulation, regulatory policies must be equal to the competitors within the same market. And, for differenct countries with differenct political systems, ideologies and value systems, the development direction of cable industry will eventually make convergence regardless of how differences existing in regulatory ideologies and regulation measures. (5) For the case of triple play policy, consumer welfare will improve only when there is a modest competition between cable industry and telecommunication industry. Larger market power of telecommunication and excessive competition will lead to monopoly profits, which will not get any improvement of consumer welfare. In addition, triple play contributes 3.4 percent to the growth of cable industry revenue in pilot cities. However, the effect of this policy is only work in the implemented year, and in the subsequent years, it not only weaken, and may cause a negative impact. In addition, based on the analysis of the impact in different sub-samples, the results also find that triple play is more effective in the areas where the development of cable industry is relatively advancing and the economics level is higher. Final, this paper put forward some industry and policy suggestionto improve cable industry in the views of industry and government, and indicates some deficiencies of the study and made a prospect of the further research.