STRATEGY AND STRUCTURE OF MARKET COMPETITION: THE TAIWANESE CABLE TV INDUSTRY IN THE 1990s

Cable TV plays a dominant role in the media environment of Taiwanese society. Before the passage of the Cable TV Law in 1993, the industry was a vibrant informal sector; it was highly differentiated, and acted as a democratic alternative to the formal media. The 1993 Cable TV Law, which designed a competitive market with five licenses issued in each area, was touted as a victory for democracy by the opposition parties. In less than a decade, however, drastic merger movements led to a monopolistic structure. The abuse of monopolistic power has become pervasive. This article studies this unexpected historical twist by examining the industry's market dynamics during the country's democratization in the 1990s. To show the path‐dependent mechanisms in the nonlinear development trajectory of the market, a sociological approach is applied that emphasizes firms’ competitive strategies in controlling the multiple dimensions of uncertainties and rules that induce this competition.