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8. This technology allows telephone companies to deliver video services over the paired copper wires that are now used to connect subscribers to the companies' plant.

9. See "Digital TV: Advantage, Hughes," Business Week, March 13, 1995, pp. 67–68. Similar estimates may be found in Leland L. Johnson and Deborah R. Castleman, Direct Broadcast Satellites: A Competitive Alternative to Cable Television? RAND, 1991.

10. Bell Atlantic has recently withdrawn its Section 214 applications for hybrid fiber/coaxial cable technology but remains committed to building a broadband network using other technologies, such as fiber to the curb.

11. This estimate is based on a national total of about 150 million access lines. (United States Telephone Association, Statistics of the Local Exchange Carriers, 1993.)

12. FCC, Statistics of Communications Common Carriers, 1993/94 edition, p. 38.

13. It should be noted that part of this slowdown is attributable to the liberalization of customer premises equipment. Since the late 1970s, customers have been able to purchase their own telephone handsets, key telephone systems, PABXs, modems, answering machines, and fax machines. As a result, perhaps 20 to 25 percent of all telephone-related capital equipment is owned by telephone customers. See R.W. Crandall, After the Breakup: U.S. Telecommunications in a More Competitive Era. Washington, D.C.: The Brookings Institution, 1991.

14. For an excellent review of this literature, see B.M. Owen and S.S. Wildman, Video Economics. Cambridge, Mass.: Harvard University Press, 1992, ch. 4.

15. For an excellent compendium of studies of the public-goods problem, see T. Cowen (ed.), The Theory of Market Failure. Fairfax, Va.: George Mason University Press, 1988.

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