Estimating Demand for Canadian Cable Television Services

This paper presents preliminary demand estimates for basic and non-basic cable television services over data drawn from the annual reports of CATV operators from 1990-1996. Parameters of interest include the degree to which subscription levels respond to changes in rates for basic service and to changes in rates for non-basic service. Since a subscription to non-basic service is conditional on subscription to basic, an important question is the extent to which CATV firms selected prices for basic service that were below the CRTC's price caps either to acquire non-basic subscriptions or for other reasons. In addition to revealing features of the historical growth of CATV markets in Canada, the results also inform future policy considerations which inevitably arise from convergence of technologies (such as for telephone or for CATV) for signal transmission.