The formation of Taiwan’s cable TV market is the consequence of conflicts and struggles among capital, state and civil society. From an institutional approach, this paper aims to analyze different stages of state legislation and implementation for the cable TV market. The Taiwanese state plays a role not to protect property but for its legitimacy and interest. There are two stages of state regulation and implementation. At the pre-cable TV stage, the state suppressed local system managers in a move against media deregulation and democracy, but protected international channel providers due to international trade negotiations. The selective implementation caused illegal system managers to be bargained and controlled by local factions, gangs and syndicates. At the cable TV legislation stage, the state let the system mangers slide. They are allowed to continue their business until the establishment of a legal cable company in the same area. The interference without law and non-intervention with law resulted in horizontal and vertical mergers and acquisitions in the Taiwanese cable industry.