Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Introduction
- 1 Standard setting in markets: the browser war
- 2 Competition through institutional form: the case of cluster tool standards
- 3 The economic realities of open standards: black, white, and many shades of gray
- 4 Coordination costs and standard setting: lessons from 56K modems
- 5 Promoting e-business through vertical IS standards: lessons from the US home mortgage industry
- 6 Intellectual property and standardization committee participation in the US modem industry
- 7 Manipulating interface standards as an anticompetitive strategy
- 8 Delay and de jure standardization: exploring the slowdown in Internet standards development
- 9 Standardization: a failing paradigm
- 10 Standards battles and public policy
- 11 Switching to digital television: business and public policy issues
- 12 Should competition policy favor compatibility?
- Index
- References
11 - Switching to digital television: business and public policy issues
Published online by Cambridge University Press: 22 September 2009
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Introduction
- 1 Standard setting in markets: the browser war
- 2 Competition through institutional form: the case of cluster tool standards
- 3 The economic realities of open standards: black, white, and many shades of gray
- 4 Coordination costs and standard setting: lessons from 56K modems
- 5 Promoting e-business through vertical IS standards: lessons from the US home mortgage industry
- 6 Intellectual property and standardization committee participation in the US modem industry
- 7 Manipulating interface standards as an anticompetitive strategy
- 8 Delay and de jure standardization: exploring the slowdown in Internet standards development
- 9 Standardization: a failing paradigm
- 10 Standards battles and public policy
- 11 Switching to digital television: business and public policy issues
- 12 Should competition policy favor compatibility?
- Index
- References
Summary
Abstract
This paper investigates the incentives of broadcasters to use subsidies and sunset dates to affect the viewers' decisions to switch from analog to digital television. It is shown that when viewers have identical preferences for digital television, it is never optimal for the broadcaster to subsidize just a fraction of viewers. When instead viewers have different valuations, broadcasters might want to induce viewers to switch gradually. Implications for welfare and effects of universal service requirements on equilibrium outcomes are also discussed.
Introduction
Television is currently undergoing a major transformation. The old analog standards are being replaced by new digital standards, widely perceived to be technologically superior. Digital television (DTV) makes possible the delivery of a signal virtually free of interference, with better image and audio quality and improved interactivity. In addition, data compression technologies allow for a more efficient use of bandwidth. Not only does DTV provide the flexibility of increasing the quality and number of channels, but it also frees up bandwidth for alternative uses.
These benefits can be realized only if broadcasters as well as viewers are willing to invest in the new technology. On the supply side of the market, broadcasters need to invest in digital transmission equipment and make content available on the digital platform.
- Type
- Chapter
- Information
- Standards and Public Policy , pp. 345 - 371Publisher: Cambridge University PressPrint publication year: 2006
References
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