In 2005, Ofcom accepted undertakings from BT, the vertically integrated provider of fixed telecoms services in the UK. These constitute the latest attempt to address discriminatory concerns infixed telecoms. This paper examines the incentives of vertically integrated operators with market power to discriminate using where possible empirical evidence relevant to the UK and considers possible regulatory responses to this behaviour. Finally, it briefly describes the remedy adopted by Ofcom to deal with this issue.
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