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Consumer welfare of the state-level franchising processes for multi-channel video programming distributors

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  • Chun, Heasun
  • Kim, Jin Ki

Abstract

Internet protocol television (IPTV) that telecom carriers convey has recently appeared as a competitor of cable television service in the multi-channel video programming distributor (MVPD) market. A carrier must be granted franchise for multi-channel video programs from the local government in the US, which becomes an issue for delaying service launching, hampering fair competition, and leading to inefficient resource allocation of carriers. Therefore, a state-level franchising process has been suggested as an alternative to shorten the launching period, to improve competition in the MVPD market, and as a result, to increase consumer welfare. In this regard, this study proposes a new approach to estimate the gain in consumer welfare from changing the MVPD franchising mechanism from local-level to state-level. Results show that the state-level process will grant a gain in consumer welfare ranging from $1.8 to $3.1 billion dollars for ten years. This result should encourage regulators and legislators to consider a state-level process as a viable option for improving competition in the MVPD, as this change will increase consumer welfare.

Suggested Citation

  • Chun, Heasun & Kim, Jin Ki, 2025. "Consumer welfare of the state-level franchising processes for multi-channel video programming distributors," Evaluation and Program Planning, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:epplan:v:110:y:2025:i:c:s0149718925000254
    DOI: 10.1016/j.evalprogplan.2025.102558
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