The Paper explains the origin of market-based regulation in the EU and the issues arising from defining economic markets under innovation and network convergence. This market-based approach will remain appropriate for downstream applications such as business connectivity where fixed and wireless platforms are largely complementary but will come under increasing strain for mass market services where rival platforms exist for the delivery of entertainment services. Regulatory approaches such as those based on pre-defined ‘bottlenecks’ have the suggestion of comparative simplicity but in practice do not enable a clear application of proportionate regulation absent an associated market review. In the future more attention will need to be given to the characterisation of downstream markets and a clearer distinction between the requirements of mass market consumers and businesses.
Get full access to this article
View all access options for this article.
References
1.
BainJ., Barriers to new competition: Their character and consequences in manufacturing industries, Harvard University Press, Cambridge, Mass., 1956.
2.
BasaliscoB., “Technological neutrality in the EU electronic communications networks framework: Insights from Ofcom”, May 2006. Available from the author, b.basalisco@imperial.ac.uk.
3.
BaxterS. and DethmersF., “Collective Dominance under EC Merger Control – after Airtours and the introduction of unilateral effects is there still a future for collective dominance?”, European Competition Law Review, 2006, Issue3, 148–160.
4.
CaveM., “Encouraging infrastructure competition via the ladder of investment”, Telecoms Policy, 2006, April, vol. 30, pp. 223–237.
5.
DixitA. and PindyckR., Investment under Uncertainty, Princeton University Press, 1994.
6.
DobbsI.M., Managerial Economics, Oxford University Press2000.
7.
DobbsI.M., “Intertemporal price cap regulation under uncertainty”, Economic Journal, 2004, 114, 421–440.
8.
DobbsI.M. and RichardsP., “Biases and Errors in the Assessment of market boundaries for ex ante regulation with an application to Internet services in the UK”, Journal of Network Industries, 2004, Volume 5, No 2, 193–217.
9.
DobbsI.M. and RichardsP., “Innovation and the New Regulatory Framework for Electronic Communications in the EU”, European Competition Law Review, 2004aVol. 25, 716–730.
10.
DobbsI.M. and RichardsP., “Output Restriction as a Measure of Market Power”, European Competition Law Review, 2005Vol. 26, 572–580.
11.
DobbsI.M., “Defining markets for ex ante regulation using the hypothetical monopoly test”, International Journal of the Economics of Business, 2006, Vol. 13, No.1, 83–109.
12.
EvansD.S. and SchmalenseeR., “The industrial organization of markets with two-sided platforms”, September 2005, Working Paper 11603, available at – http://www.nber.org/papers/w11603.
13.
FisherF., “Diagnosing monopoly”, Quarterly Review of Economics and Business, 1979, 19, 7–33.
14.
FussM. and WavermanL., 2005, “Canada's Productivity Dilemma: The Role of Computers and Telecom, Melvyn Fuss & Leonard Waverman. Bell Canada's Submission To The Telecommunications Policy Review Panel”, March 2005. Available at http://www.itu.int/osg/spu/dtis/documents/Papers/productivitydilemma.pdf.
15.
GeroskiP., “Thinking creatively about markets”, International Journal of Industrial Organisation (1998) 16, 677–695.
16.
GualJ., “Market Definition in the Telecoms Industry”, in ‘The Economics of Antitrust and Regulation in Telecommunications’, 2004, E. Elgar Publishing edited by ReyP. and BuiguesP.
17.
HarbordD. and von Graevenitz, “Market Definition in Oligopolistic and Vertically Related Markets: Some Anomalies”, European Competition Law Review, 2000, Issue 3, 151–158.
18.
HeitJ., “The justifiability of the ECJs wide approach to the concept of barriers to entry”, European Competition Law Review, 2006, Issue 27, 117–123.
19.
KayJ., “Identifying the strategic market”, Business Strategy Review, 1990, Spring.
20.
LaroucheP., “Relevant market definition in network industries: Air transport and telecommunications”, Journal of Network Industries, 2000, 407–455.
21.
LaroucheP., “A closer look at some assumptions underlying EC regulation of electronic communications”, Journal of Network Industries, 2002, 129–149.
22.
MacAfeeP., “When are sunk costs barriers to entry? Entry barriers in economic and antitrust analysis”, American Economic Review Papers and Proceedings, 2004, 94,461–5.
23.
MasseyP., “Market definition and market power in competition analysis: Some practical issues”, The Economic and Social Review, 2000, 4, 309–328.
24.
MottaM., Competition Policy, Cambridge University Press, 2004.
25.
NERA, Switching costs, Economic Discussion Paper 5, OFT Report 6552003.
PleatsikasC. and TeeceD., “The analysis of market definition and market power in the context of rapid innovation”, International Journal of Industrial Organization, 2001, Volume 19, Issue 5 Pages 665–693.
28.
RichardsP., “The limitations of market-based regulation of the electronic communications sector”, Telecommunications Policy, 2006, April, 30, 201–222.
29.
SchmalenseeR., “Sunk costs and antitrust barriers to entry”, American Economic Review Papers and Proceedings, 2004, 94, 471–5.
30.
StiglerG., The organisation of industry, 1968, University of Chicago Press, Chicago.
31.
de StreelA., “A First Assessment of the New Regulatory Framework for European Electronic Communications”, Communications & Strategies, 2005, 58, 141–170.
32.
de StreelA., “A program for review of the European economic regulation for electronic communications”, Telecommunications Policy2007, (forthcoming). TanSu-En and HentonA., “New Wireless Technologies: Continuity and/or Change”, CICT Working Paper, no. 103, 2005, available at http://www.cict.dtu.dk/upload/centre/cict/publications/working%20papers/cictwp103.pdf
33.
von WeizsackerC., 1980, “A welfare analysis of barriers to entry”, Bell Journal of Economics, 11, 399–420.
