Functional or structural separation to deal with vertical foreclosure effects in the electronic communications industry, pending the Second British Telecoms Review (2015)

Congedo, Pierluigi (2015): Functional or structural separation to deal with vertical foreclosure effects in the electronic communications industry, pending the Second British Telecoms Review (2015). Published in: Italian Antitrust Review , Vol. 2, No. 3 (30 December 0201): pp. 65-90.

Abstract

The paper tackles the discussion about vertical separation in the electronic communications sector, in its two main forms functional and structural. The author will argue how mandatory structural separation under certain conditions could be a possible option. The evidence is provided by the analysis of recent commitment decisions adopted by the European Commission in the energy sector, and by structural separation undertakings signed in Australia and New Zealand in the past few years. The paper considers the theoretical background, such as the various forms of separation identified by the OECD in 2001 and 2011, but also the current discussion around the Second Telecoms Review (2005-2015) in the United Kingdom.

• Item Type: MPRA Paper
• Language: English
• Keywords: vertical structural separation, functional separation, regulation, abuse, dominance, essential facilities, commitments, electronic communications
• Subjects: K - Law and Economics > K2 - Regulation and Business Law > K21 - Antitrust Law; K - Law and Economics > K2 - Regulation and Business Law > K23 - Regulated Industries and Administrative Law; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly ; Monopolization Strategies; L - Industrial Organization > L4 - Antitrust Issues and Policies; L - Industrial Organization > L4 - Antitrust Issues and Policies > L43 - Legal Monopolies and Regulation or Deregulation; L - Industrial Organization > L4 - Antitrust Issues and Policies > L44 - Antitrust Policy and Public Enterprises, Nonprofit Institutions, and Professional Organizations; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L95 - Gas Utilities ; Pipelines ; Water Utilities; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications

References

ADHIKARI, Telstra ready to push on with structural separation, Technology spectator, 18 March 2014

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (‘ACCC’), Structural Separation Undertakings offered by Telstra on the 23 February 2012, accepted by ACCC on the 28 February 2012

ACCC, Telstra’s Structural Separation Undertaking – Annual Compliance Report 2011-2012, a Report to the Minister for Broadband, Communications and the Digital Economy, with letter of 13 April 2013

ACCC press release of 7 February 2013, ‘ACCC directs Telstra to amend measures developed under the Migration Plan’, accessible at http://www.accc.gov.au/media-release/accc-directs-telstra-to-amend-measures-developed-under-the-migration-plan

BRITISH MINISTRY OF ECONOMIC DEVELOPMENT, ‘Stocktake Process, stakeholder Input and Supporting documents’ (POL/1/27/10/2/1), published on 20 April 2006

BRITISH MINISTRY OF ECONOMIC DEVELOPMENT, ‘Discussion document – Regulatory Implications of Structural Separation’, September 2010, accessible at http://www.med.govt.nz/sectors-industries/technology-communication/pdf-docs-library/communications/telecom-separation/regulatory-implications-of-structural-separation-september-2010.pdf

FARELL-SHAPIRO, Intellectual Property, Competition, and information Technology, Berkeley Competition Policy Centre Working Paper no. CPC-04-45, 2004

FEDERAL TRADE COMMISSION, Prepared Statement of the FTC before the Committee on the judiciary US of representatives, 28 July 1999

ITALIAN MINISTRY FOR THE ECONOMIC DEVELOPMENT AND MINISTRY OF COMMUNICATIONS, Caio Report ‘Portare l’Italia verso la leadership europea nella banda larga, Considerazioni sulle opzioni di politica industriale Presentazione sulle conclusioni del progetto al Ministero dello Sviluppo Economico – Comunicazioni, 19 March 2009

LITAN-NOLL–NORDHAUS-SCHERER, Remedies Brief of Amici Curiae, United States v. Microsoft Corp., 27/4/2000

MOTTA-POLO-VASCONCELOS, Merger Remedies in the EU: An Overview, in LEVEQUE-SHELANSKY (eds), Merger Remedies in American and European Union Competition Law, London, 2003

MOTTA-POLO-VASCONCELOS, Merger Remedies in the EU: An Overview, in LEVEQUE-SHELANSKY (eds), Merger Remedies in American and European Union Competition Law, London, 2003

ORGANIZATION FOR THE ECONOMIC COOPERATION AND DEVELOPMENTE (‘OECD’), Recommendation of the Council concerning structural separation in regulated industries, 26 April 2001, C (2001) 78/FINAL, Paris, 2001

OECD, Recommendation 2011 on structural separation in regulated industries, C(2011) 135

OECD, Report on Experiences with Structural Separation, Paris, 2012, 10, accessible at http://www.oecd.org/daf/competition/50056685.pdf

OECD, Report on Competition and Regulatory Reform, ‘Restructuring public utilities for competition’, 2001

OECD Competition Committee, Report on Experiences with Structural Separation, PARIS, 2012, 109-110

OFCOM, Strategic Review of Digital Communications (‘Strategic Review’)

PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA, HOUSE OF REPRESENTATIVES, Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. Explanatory Memorandum

PULLAR-STECKER, ‘Telecom split first in world’, Fairfax NZ News, 27 October 2011

PUTT, After Structural Separation – New Zealand telecommunications a year after Telecom New Zealand and Chorus became separate companies, in Computer World New Zealand, 2012, 6-7

SHELANSKY-SIDAK, Antitrust Divestiture in Network Industries, in Chicago Law Review, 2001

TAJANA, Structural Remedies and Abuse of Dominant Position, TILEC Discussion Paper, Tilburg University, 2005

TAJAN-PAPANDROPOULOS, The merger remedies study: in divestiture we trust?, in European Competition Law Review, 2006

TELSTRA’s Structural Separation Undertaking Annual Compliance Report 2011-12

The Age, ‘Telstra Faces Enforced Split’, by Katharine Murphy and Jesse Hogan’ 3 October 2007

The Guardian, ‘Vodafone calls for BT form separate broadband company’, 25 March 2015

WATERS and DAMIAN, Separation regulation of dominant telecommunications operators in today’s legacy networks and tomorrow’s next generation networks. One separation model does not fit all – key design issues and lessons learned

WATERS and DAMIAN, Separation regulation of dominant telecommunications operators in today’s legacy networks and tomorrow’s next generation networks. One separation model does not fit all – key design issues and lessons learned