Antitrust and Regulation in the EU and US

Antitrust and Regulation in the EU and US

Legal and Economic Perspectives

New Horizons in Competition Law and Economics series

Edited by François Lévêque and Howard Shelanski

The diverse and excellent set of authors assembled in this book sheds light on the continuing and conflicting calls for deregulation and re-regulation of important industries and informs the ongoing, increasingly global, policy debate over the evolving line between regulation and general competition policy. The purpose of this book is to understand the debate and its policy implications, focusing on the traditionally regulated sectors of telecommunications and energy, and comparing approaches in the European Union and the United States.

Chapter 4: Modeling an Antitrust Regulator for Telecoms

James B. Speta

Subjects: economics and finance, competition policy, law and economics, law - academic, competition and antitrust law, law and economics

Extract

James B. Speta Telecom markets are increasingly, even if imperfectly, competitive. This is very old news as a matter of prediction; now it is becoming fact. Public utility law, once dominant, is on the way out; competition law and economics is on the way in. This too is old news, at least if “old” is measured in “Internet time.” The only interesting question is how far to take the use of competition law in telecom markets. The easiest answer is “all the way,” which involves both eliminating substantive law other than antitrust and eliminating the regulatory institutions that once implemented sector-specific telecommunications law. Early in the Internet era (in 1997!), Peter Huber vigorously argued to “abolish the FCC” and rely solely on private antitrust enforcement to address any competition problems in telecommunications (Huber 1997). If one is confident that fairly vigorous competition will more or less prevail in all important telecommunications markets – and if one is more or less happy with the results that competitive markets will produce – then this answer is fairly hard to dispute.1 In structurally competitive markets, the need for consistent legal intervention will be low, and the most likely forms of anticompetitive activity (collusion) are those that courts are well-equipped to identify and punish. But of course the easy answer is not satisfying – or at least the easy route to the easy answer is not – because, although markets are clearly more competitive than they once were, no one contends that all important telecommunications markets are perfectly...

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