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The transition to digital television

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  • Jérôme Adda
  • Marco Ottaviani

Abstract

type="main" xml:lang="en"> This paper studies the role of economic policy for the transition from analogue to digital television, with particular attention to the switch off of the analogue terrestrial signal. The analogue signal cannot be credibly switched off until almost all viewers have migrated to digital, due to the policy objective of universal access to television. But before switch off, only part of the population can be reached with the digital signal. In addition, those who are reached need to spend more to upgrade their reception equipment than after switch off, because the capacity to increase the power of the digital signal will be made available only then. After reviewing the competitive structure and the role of government intervention in television markets, we present the early experience of a number of industrialized countries in the transition to digital television. We then formulate a micro-econometric model of digital television adoption by individual viewers. The model is calibrated to UK data and simulated to predict the impact of government policies on the take-up of digital television. Policy makers can affect the speed of take up of digital television by: (1) controlling the quality of the signals and the content of public service broadcasters; (2) intervening in the market for digital equipment with subsidies; and (3) publicizing the conditions and date of switch off of the analogue signal. We find that if the analogue terrestrial signal is switched off only when certain aggregate adoption targets are reached, strategic delays may arise and expectations may affect the success of the switch off policy. — Jérôme Adda and Marco Ottaviani

Suggested Citation

  • Jérôme Adda & Marco Ottaviani, 2005. "The transition to digital television," Economic Policy, CEPR;CES;MSH, vol. 20(41), pages 160-209, January.
  • Handle: RePEc:bla:ecpoli:v:20:y:2005:i:41:p:160-209
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    File URL: http://hdl.handle.net/10.1111/j.1468-0327.2005.00135.x
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    Cited by:

    1. Chou, Yuntsai, 2014. "The stalemate of cable digital switchover: A study of competition effects and deregulation," Telecommunications Policy, Elsevier, pages 393-405.
    2. Andreas Hadamitzky & Korbinian von Blanckenburg & Christof Backhaus, 2007. "Die Bereitstellung von öffentlich-rechtlichen Fernseh- und Rundfunkprogrammen: Eine Analyse auf Basis der Kollektivgütertheorie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, pages 256-278.
    3. Fulvio Minervini & Diego Piacentino, 2007. "Spectrum Management and Regulation: Towards a Full-Fledged Market for Spectrum Bands?," Working Papers 07-2007, Macerata University, Department of Studies on Economic Development (DiSSE), revised Nov 2008.
    4. Glenn Withers, 2003. "Broadcasting," Chapters,in: A Handbook of Cultural Economics, chapter 12 Edward Elgar Publishing.
    5. Glenn Withers, 2013. "Broadcasting," Chapters,in: Handbook on the Digital Creative Economy, chapter 36, pages 409-415 Edward Elgar Publishing.
    6. Paul Fenn & David Paton & Leighton Vaughan Williams, 2009. "Productivity growth and funding of public service broadcasting," Public Choice, Springer, vol. 141(3), pages 335-349, December.
    7. Yerokhin Oleg, 2011. "The Social Cost of Blackmail," Review of Law & Economics, De Gruyter, pages 337-351.
    8. Glenn Withers & Katrina Alford, 2011. "Broadcasting," Chapters,in: A Handbook of Cultural Economics, Second Edition, chapter 11 Edward Elgar Publishing.
    9. Yerokhin Oleg, 2011. "The Social Cost of Blackmail," Review of Law & Economics, De Gruyter, pages 337-351.
    10. Amnon Levy, 2011. "A Stock Targeting International Carbon-Tax Rule with Uncertainty and Diminishing Compliance," Economics Working Papers wp11-09, School of Economics, University of Wollongong, NSW, Australia.

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