George Gibbs Center for Economic Prosperity

12/02/04 – The Publ⁠i⁠c Ga⁠i⁠ns When Governmen⁠t⁠ Embraces Compe⁠t⁠⁠i⁠⁠t⁠⁠i⁠on

By: The James Madison Institute / 2004

by Geoffrey F. Segal

The soaring cost of cable TV is an example of what often happens when monopolies operate without the restraining influence of competiton or regulation. Those are the forces that keep prices and costs in line in a market economy. In the absence of meaningful competition or regulation, cable operators have felt free to boost their prices well beyond the pace of inflation. Indeed, until the recent spread of satellite TV, cable’s captive customers were left with two options:Take it or leave it.