Controlling market power is a crucial issue in liberalised telecommunications markets. By comparatively analysing five countries, this book explores how the regulatory framework should be designed.

The authors analyze regulatory reform and the emergence of competitionin network industries using the state-of-the-art theoretical tools ofindustrial organization, political economy, and the economics ofincentives.

Over the last decade, the European Union has undertaken major market-opening reforms in the area of network industries. The liberalization process has now been completed in the air transport and electronic communications sectors and has achieved considerable progress in other network industries, such as postal services, energy (electricity and gas), and rail transport. Creating competition in network industries is not an easy matter, however. Because they benefit from certain advantages such as a large initial market share and control of essential facilities, incumbents typically retain substantial market power in a number of relevant markets and may even use their position to prevent others from engineering such markets. Controlling market power is thus one of a number of key concerns in network industries. It can be achieved in two main ways; either through the adoption and implementation of sector-specific rules or through the application of competition rules. There are advantages and disadvantages to both options, but it is a combination of the two that generally prevents incumbents from abusing their market power in liberalized markets. Competition law and sector-specific regulation provide for the application of remedies on incumbents or other operators holding significant market power. Such remedies are either structural or a behavioural. In some occasions they will apply ex ante, while in others ex post. This book comprises a collection of outstanding essays dealing with the complex legal and economic issues raised by remedies in network industries. While some of these essays analyse remedies from a generic point of view, others focus on specific remedies applied specifically in particular sectors. The sectors covered in this volume include electronic communications, postal services, energy (electricity and gas), and air transport. The final paper also presents a discussion of the United States approach to remedies in network industries. The essays comprised in this book have been written by leading academics (lawyers and economists), as well as private practitioners.

Since the breakup of AT&T in the early 1980s, many scholars and others have argued that telecommunications regulatory policy, especially at the state level, must change dramatically to fit new market conditions. To others, particularly state regulators, lawmakers, and smaller competitors, the proper response is one of slow, incremental change in regulatory policy. This volume explores these issues by using a unique multidisciplinary lens to focus on the problems of market power and cost allocation in long distance telecommunications markets. The contributors approach the subject from the traditional perspectives of economics and law but also incorporate developments in newer disciplines such as operations research, decision theory, policy analysis, and corporate strategy. Each section includes a series of main papers as well as critical reviews by scholars using methodologies from other disciplines. The result is an unusually comprehensive treatment of the complex regulatory issues facing the telecommunications industry today. The volume is divided into two primary sections which deal with market power and cost allocation in turn. The first part opens with a paper which examines market power from the perspective of legal analytics. Two economists then employ the methodologies of antitrust law and economics to survey the approaches of various states to the problem of identifying telecommunications market power. The third main paper in this section analyzes the market power concept from the particular economic perspective of contestable market theory. Turning to cost allocation issues, the contributors argue for the applicability to long distance markets of a new cost allocation methodology developed by NRRI for local exchange service. The topic is then approached by using a series of regulatory fables in which various possible incentive schemes are used to induce supposedly efficient behavior, with cost allocation as a resulting side issue. Each main paper is followed by one or more critical discussant papers. Finally, contributor Alfred Kahn draws on his long experience as a scholar and regulator to examine the current problems of telecommunications regulation in their historical context and to make some predictions about the future course of regulation in the industry. An important contribution to the business literature, this volume is a must acquisition for any library dealing with the telecommunication industry.

Approaching the theme from an antitrust perspective and focusing on telecommunications and television broadcasting, this volume examines how traditional European competition law doctrines and principles can be applied to this converging sector. The application of antitrust rules to the communications sector is often one of the most controversial areas of law and policy. The shift towards a more competition law oriented form of regulation is one of the main principles inspiring the recent reform of European sectorial regulation enshrined in the 2002 Electronic Communication Package. The Package was adopted in 2002 and is in the process of being implemented throughout the Union. This monograph provides a detailed description of the new regulatory package and highlights the interplay between regulatory provisions and EC competition law. It then follows the pattern of a typical antitrust analysis containing chapters on the definition of relevant market in the sector and various forms of abuses of market power. The book also critically examines the Commission's practice and policy in the field of merger control and considers its relationship with wider regulatory policies. Finally it analyses the sector from the perspective of the 'European' public interest and the changed nature of communications as a public service.

Fiji, being remotely located with a small population, does not attract many players to its economy. Fewer players with large market shares coupled with high barriers to entry allow firms with substantial market power (“SMP”) to form. This research aims to explore the existence of SMP amongst selected markets and the adequacy of Fiji’s regulatory law, which is inspired by the US and EU competition regulation models. Based on the analysis of competition cases and in-depth interviews with members of the Fijian competition authority, the research examines how FCCC has dealt with the issues of testing SMP in relevant markets. Three industries were randomly selected as case studies. These were the telecommunications industry, shipping industry and the LPG industry. SMP was tested using a three-stage test. Stage One was choosing the relevant market and Stage Two was analysing the market conditions such as market shares of players and barriers to entry. Stage Three was analysing whether the player could maintain its price independently of its consumers and competitors. If Stages Two and Three was affirmative in respect of Stage One, SMP was held to exist. Legislation was closely examined to identify and verify the test of firms holding SMP. The results show existence of firms holding SMP in the chosen markets in telecommunications, shipping and LPG sectors. Competition legislation in Fiji does not limit the mere existence of SMP but punishes abuse of its SMP. The results identify the ways in which the authority seeks to adjust its competition system to the particularities of a small developing country, in terms of legislation, economy, culture and institutional framework. The existing legislation needs to be reformed to include provisions identifying tests for SMP. The study reveals inconsistencies between the formal provisions of the competition law and the manner in which it is applied and advances recommendations for improvement.