other than to prevent the exercise of market power in purchasing programming or to pre- vent the preservation of market power by denying programming to rivals The theory that monopsony problems might arise if a sufficiently large concentration of media outlets were permitted is a respectable starting point for an argument leading to an ownership cap. After all, this was the basis for the decision at the time of the breakup to have more than one local phone monopoly arise from the dissolution of At&T. But a necessary first step, as al ways, is market definition. In this case, we need to ask whether program suppliers or the inputs they employ have other ways to reach the audience served by the outlets in question. Clearly, if the answer is yes, an ownership cap make no sense. Also, unlike telephone switch gear, programs are public goods. A buyer with market power has no incentive to restrict purchases of a given program in order to reduce the price it pays. The effect of restricting purchases will be to increase the unit price for the units the MSO still purchases, holding constant the quality of the programming So-called"program access" rules are based on a very similar theory of vertical restraints The 1992 Cable Act contained a provision, retained in the 1996 revisions of the law, re- quiring cable television companies with ownership interests in satellite-distributed pro- gramming to make the programming available to rivals such as DirecTV and EchoStar. I suppose someone might construct an infant-industry story justifying such a rule, although it would have to be premised on evidence that integrated cable owners would engage in discrimination or exclusive dealing. that new satellite broadcasters lacked access to a- tractive programming from other sources, and that consumers would not be better off with differentiated programming. But no one has put forth such a theory or gathered such evidence, and anyway satellite broadcasting clearly has passed beyond the infant industry stage So long as the program access rules stay in place(the Commission in June 2002 declined to permit them to sunset) they reduce the incentive of cable owners to invest in marginal a public good is not used up when it is"consumed. For a given vel, its production costs are fixed, and providing the good to an extra consumer costs the pro nothing. Contrast an automobile tire with a video production. a tire sold to consumer X cannot be sold to consumer y Producing a tire for consumer Y requires the producer to incur significant costs. a video produc tion can be sold to both consumers, or all consumers, with no increase in production cost14 other than to prevent the exercise of market power in purchasing programming or to pre￾vent the preservation of market power by denying programming to rivals. The theory that monopsony problems might arise if a sufficiently large concentration of media outlets were permitted is a respectable starting point for an argument leading to an ownership cap. After all, this was the basis for the decision at the time of the breakup to have more than one local phone monopoly arise from the dissolution of AT&T. But a necessary first step, as always, is market definition. In this case, we need to ask whether program suppliers or the inputs they employ have other ways to reach the audience served by the outlets in question. Clearly, if the answer is yes, an ownership cap makes no sense. Also, unlike telephone switch gear, programs are public goods.16 A buyer with market power has no incentive to restrict purchases of a given program in order to reduce the price it pays. The effect of restricting purchases will be to increase the unit price for the units the MSO still purchases, holding constant the quality of the programming. So-called “program access” rules are based on a very similar theory of vertical restraints. The 1992 Cable Act contained a provision, retained in the 1996 revisions of the law, re￾quiring cable television companies with ownership interests in satellite-distributed pro￾gramming to make the programming available to rivals such as DirecTV and EchoStar. I suppose someone might construct an infant-industry story justifying such a rule, although it would have to be premised on evidence that integrated cable owners would engage in discrimination or exclusive dealing, that new satellite broadcasters lacked access to at￾tractive programming from other sources, and that consumers would not be better off with differentiated programming. But no one has put forth such a theory or gathered such evidence, and anyway satellite broadcasting clearly has passed beyond the infant industry stage. So long as the program access rules stay in place (the Commission in June 2002 declined to permit them to sunset) they reduce the incentive of cable owners to invest in marginal 16 A public good is not used up when it is “consumed.” For a given quality level, its production costs are fixed, and providing the good to an extra consumer costs the producer nothing. Contrast an automobile tire with a video production. A tire sold to consumer X cannot be sold to consumer Y. Producing a tire for consumer Y requires the producer to incur significant costs. A video produc￾tion can be sold to both consumers, or all consumers, with no increase in production cost