Policy issues for cable startup in smaller countries: The case in South Korea

The Korean cable industry is separated into the three subindustries: network operators, program providers and system operators. Vertical integration and horizontal concentration, conglomerates' entry into local cable markets, and other media's cross-ownership of cable systems are prohibited by the law; a theoretically attractive policy innovation. However, the performance of the early stages of the industry shows some negative effects of the totally disintegrated subindustries being regulated by different government units. Thus, the future of the new industry depends on how to cope adequately with the several challenges: programming acquisition and the introduction of vertical and horizontal integration.