The satellite home viewer improvement act: Price and quality impact of direct broadcast satellite companies’ provision of local broadcast stations

Prior to 1999, direct broadcast satellite (DBS) companies were generally not permitted to deliver local broadcast stations to their subscribers while cable companies did not face this constraint. With the passage of the Satellite Home Viewer Improvement Act, the Congress removed this asymmetry and created a more level competitive environment. In this paper, reduced-form equations are employed to test the impact of DBS companies’ provision of local broadcast stations. When both DBS companies provide local broadcast stations, cable companies improve the quality of service they provide to their subscribers, although no impact on the price of cable service is found.