Entry Deterrence and New Technology Deployment in Local Cable TV Markets **Preliminary and Incomplete – Comments Welcome**

Do incumbent cable TV firms act to deter entry by cities? I use variation in the costs for a city to enter and operate in local cable TV markets to show that incumbent cable TV firms use system upgrades to deter entry by cities. Interestingly, incumbent cable TV firms do not use system upgrades to deter entry by private firms. My research demonstrates that private incumbents actively engage in behavior designed to deter potential entry by public agencies. This contribution links two important bodies of literature: privatization and entry deterrence. This result also suggests that threat of entry may be a mechanism that a public agency can use to control incumbent firm behavior. *PhD Candidate, Department of Business & Public Policy, Haas School of Business, University of California, Berkeley. Email correspondence to [email protected]. Funding for the main dataset used in this study was generously provided by Steven Tadelis. I am grateful for the many helpful suggestions from faculty and student participants in the Business & Public Policy Student Seminar and Innovation Seminar at the Haas School of Business. Entry Deterrence in Local Cable TV Markets 1