To become successful in business it is essential to have a dog eat dog mentality as your competition may attempt to work the legal systems to gain a competitive advantage against you. That is exactly how Shell describes legislation, regulation, and litigation uses as an advantage for firms in his book titled Make the Rules or Your Rivals Will. The first example, network TV companies (Fox, CBS and ABC) vs. satellite TV companies (DirecTV, Dish Network, and PrimeTime 24), demonstrates how the customer plays a key part in the way legislation is shaped to benefit both parties. The second example, RCA vs. CBS, demonstrates how they used regulation to set the color TV standard in the 1950’s in an effort to force the markets to use their products. The third and last …show more content…
Older cable networks like Fox, CBS and ABC have been around long enough to have seen their fair share of legislation in the marketplace. These three companies’ network, as an example, are typically broadcasted to other parts of the country via satellite companies like DirecTV, Dish Network, and PrimeTime 24. These same satellite companies found loopholes in the Satellite Home Viewer Act of 1988. This act simply outlines the set of regulations which govern the transmissions of television stations in the United States, specifically imposing the restriction of satellite carriers broadcasting network stations only to subscribers who cannot receive broadcasts via antenna and have not subscribed to a cable broadcast system. The direct effect of this loophole was that local networks like Fox, CBS and ABC saw fewer viewership numbers as a result of these satellite companies broadcasting their channels from different regions. This allowed customers to see sports matchups and see news broadcasts from outside their area. As for the satellite companies, their numbers drastically got
The Telecommunications Act of 1996 can be termed as a major overhaul of the communications law in the past sixty-two years. The main aim of this Act is to enable any communications firm to enter the market and compete against one another based on fair and just practices (“The Telecommunications Act 1996,” The Federal Communications Commission). This Act has the potential to radically change the lives of the people in a number of different ways. For instance it has affected the telephone services both local and long distance, cable programming and other video services, broadcast services and services provided to schools. The Federal Communications Commission has actively endorsed this Act and has worked towards the enforcement and implementation of the various clauses listed in the document. The Act was basically brought into existence in order to promote competition and reduce regulation so that lower prices and higher quality services for the Americans consumers may be secured.
...efits from adopting unfair business practices and discouraging competition are much higher than the expected penalty and punishment. With changing time, there is need to make these laws more effective and relevant.
Many businesses used this new process to raise the price of their competitors. They did this by putting constraints on entry restrictions (Woods 1986). At the state level, other laws were put in place to support the Food and Drug Act mainly to help local and area producers who were and would be facing new nat...
Governments regulate businesses when market failure seems to arise and occur and to control natural monopolies, control negative externalities, and to achieve social goals among other reasons. Setting government regulations on natural monopolies is important because if not regulated, then these natural monopolies could restrict output and raise prices for consumers. It is important to regulate natural monopolies because they don’t have any competition to drive down the price of the product they are selling. Therefore, with no competition, they can control the output and the price of the product at whatever they deem necessary. With regulations the government keeps it fair both for the consumer and producer. It’s also important for government
Since its inception, cable television service has been subject of substantial intervention on the part of regulators in Canada. The Cable television operators are licensed by a single federal regulatory authority, the CRTC. It classifies Licensed Service Areas (LSA) based partly on the current subscription level within the LSA and partly on the quality of broadcast reception available to the service provider.
Dish.com reports that in order for Dish TV to progress its place in the rising customer satellite broadband market, among other reasons, DISH decided on Feb. 20, 2014 to implement a deal with EchoStar Corporation and its subsidiaries that allows for DISH to transfer to EchoStar. On March 1, 2014 five of its satellites and about $11 million in cash in exchange for shares of two series of preferred tracking stock, and for DISH to contract back certain satellite capacity on those five satellites. The tracking stock will symbolize a collective 80 percent economic interest in the residential retail satellite broadband business of EchoStar’s subsidiary, Hughes Network Systems, LLC. BloombergBuisnessWeek.com reports that Dish TV also spent more on marketing and promotional offers to decrease its churn rate to 1.42 percent from 1.47 percent a year ago. Most notably, the Dish TV has been able to reduce the percentage of sales devoted to income tax expense from 2.52% to 2.16%. This was the main reason that led to a bottom line growth from $636.7M USD to $807.5M. Earnings from continuing operations were 38 cents a share. Analysts had projected 44 cents on average, according to data compiled by Bloomberg. Net income fell to $175.9 million or 38 cents a share, from $215.6 million, or 47 cents. The average monthly bill for a Dish
By 1950, 70 cable systems served 14,000 subscribers nationwide. In late 1950s, when cable operators began to take advantage of their ability to pick up broadcast signals from hundreds of miles access to these "distant signals" changed the focus of cable's role from one of transmitting local broadcast signals to one of providing new programming choices.
The year is 1952 and a young John Rigas purchased a cable company for a mere $300 in Coudersport, Pennsylvania with high hopes of building the company into a successful family owned and operated business (AICPA, 2005, para. 3); a business that would remain unparallel to the rest of its competition. In the late 1990s his dreams came to fruition; John Rigas, along with a few close family members and investors, purchased Century Communications for $5.2 billion and merged the companies together becoming the 6th largest cable company serving more than 5.6 million subscribers (AICPA, 2005, para. 4). Ensuring that the majority of Adelphia’s voting stock and control of the board remained in the hands of f...
Sources:Strategy and the Business Landscape, by Pankaj GhemawatBritish Satellite Broadcasting versus Sky Television. Harvard Business School Case
Predatory pricing “is alleged to occur when a firm sets a price for its product that is below some measure of cost and forfeits revenues in the short run to put competitors out of business” (Sheffet p.163-164). The reason firms take the short term loss is because they hope to drive out competitors and raise prices to monopolistic levels. By doing this, they covered their short term loss to make even greater profits in the long term than they would have by not using predatory tactics (Sheffert). Predatory pricing became illegal under Section 2 of the Sherman Act. It has remained one of the more difficult allegations for prosecutors to prove, due to the complexity of determining the company’s actual intent and whether or not it the strategy is competitive pricing. According to Areeda and Turner, there are three ways to determine if a firm is implementing predatory pricing. First, a price above marginal cost is presumed lawful; second, a price below marginal cost is considered unlawful, except when there is strong demand; and third, average variable cost is considered a good proxy for marginal cost. This is a reason predatory pricing is still important today. The courts must decide whether or not companies are engaging in competitive prices for the good of the consumers or are using predatory tactics for the good of their own company. The purpose of this paper is to focus on the current legislation regarding predatory pricing, determining when there is predation in an industry and the cause and effect relationship it has on an industry.
This paper will discuss these regulatory impacts monetarily through the analysis of the competitiveness of business in America in contrast
According to the Federal Communications Commission, expanded basic cable rates have increased at a rate of approximately 6% per year since 1995. This is double the Consumer Price Index of 2.9%, and does not include charges for equipment, fees and taxes. Therefore, if cable prices continue to rise at double the rate of other consumer goods, it stands to reason that more shoppers will consider alternative sources for their video entertainment. ("REPORT ON CABLE INDUSTRY PRICES"
There are also antitrust laws that prevent business practices that interfere with competition among
The history behind competition law is marked back from Roman Empire. The overall business performance of guilds, governments and market traders has been the focus to inspection and at times serious approvals. Subsequently in 20th century,
As such, there has been an increase of networks starting up their own streaming services such as; Amazon Prime, Kodi TV, Netflix, Hulu, ESPN GO, HBO Go, etc. Never the less, when the consumer was faced with the decision of which service is cost-effective, streaming services such as buying Hulu, Netflix, Kodi, Amazon, etc. prevails saving the average American around $20 or higher a month. In addition, for those who are just wanting to watch local TV channels have decided to buy a HD Digital Antenna in combination with the streaming services. The countless combinations of alternate TV