From Sluggish to Brisk: An analysis of Taiwan׳s cable TV digitalization policy

• Entry barriers led system operators to reluctantly invest in digitalization.
• Cross-industry operations and tariff regulation accelerated digitalization.
• Once the market failed, other mechanisms can be adopted to supply merit goods.

This paper analyzes the reasons for the slow implementation of the digitalization policy at the beginning and explains the negative implications of the market situation in 2012 when consumer sovereignty was not promoted, the user-pay concept was not implemented, and the channel market was not fully developed. Then, this paper reports on the rapid growth of the proportion of digital cable TV in Taiwan since 2012 based on the effectiveness of the digitalization policy, changes in the external environmental, and the slack industry (market) structure. Third and finally, we conduct an empirical analysis to verify the accuracy of the relevant inferences as well as the effectiveness of policies promoted by the central authority, the National Communications Commission (NCC).