Reference no: EM132396934

Government regulation often pursues a variety of goals simultaneously. Some of these goals may not be explicitly identified or acknowledged. In the process of establishing regulations to protect consumers from monopoly power, for example, it is often tempting to include provisions intended to advance other social goals. The following are among those discussed in the case as elements commonly incorporated into regulation of cable TV companies:

Universal cable service (city-wide wiring, service available in all neighborhoods)

Maximum rates (prices)

Service quality standards (e.g., minimum number of channels)

Provision of channels devoted to specific programming (public access, educational, government, etc.)

1) Which of the common elements of municipal regulation listed above can be justified by the goal of providing consumer protection from monopoly power? Explain the advantages of these regulatory provisions (i.e., what are the benefits of imposing this sort of regulation on a monopolist?).

2) What are some possible rationales for the other elements? (What motivates them, if not protection from market power?)