Diffusion of the New Video Delivery Technology: Is There Redlining in the Internet Protocol TV Service Market?

Abstract

This study examines the current status of the entry behavior of Internet Protocol TV (IPTV) into the video programming service market, with a particular focus on income redlining and local competition. Analyzing previously unavailable data on telecommunication companies' introduction of IPTV services into Indiana, this study found that although IPTV's entry into the state increased the local competition between cable and IPTV, this local competition was mostly confined to higher income areas due to the income redlining tendency associated with IPTV's entry. These empirical findings raise the issue of the recent deregulation policy reforming cable franchising rules, whose goal was to promote local competition but which might insufficiently reflect the public interest, especially for low-income households.