Open Access beyond cable: The case of Interactive TV

TL;DR

This paper examines the development and regulatory challenges of interactive TV in the U.S. and Europe, highlighting risks of market power and fragmented services due to lack of open access rules.

Contribution

It analyzes regulatory issues and market dynamics in interactive TV, emphasizing the importance of non-discriminatory access to prevent monopolistic control and fragmentation.

Findings

Dominant platform operators may leverage infrastructure ownership for market power.

Lack of open access rules leads to fragmented 'walled gardens'.

Short-term integration may hinder long-term innovation.

Abstract

In this paper we analyze the development of interactive TV in the U.S. and Western Europe. We argue that despite the nascent character of the market there are important regulatory issues at stake, as exemplified by the AOL/TW merger and the British Interactive Broadcasting case. Absent rules that provide for non-discriminatory access to network components (including terminal equipment specifications), dominant platform operators are likely to leverage ownership of delivery infrastructure into market power over interactive TV services. While integration between platform operator, service provider and terminal vendor may facilitate the introduction of services in the short-term, the lasting result will be a collection of fragmented "walled gardens" offering limited content and applications. Would interactive TV develop under such model, the exciting opportunities for broad-based innovation and extended access to multiple information, entertainment and educational services opened by the new generation of broadcasting technologies will be foregone