An antitrust analysis of the case for wireless network neutrality
The ongoing debate about possible implementation of regulatory rules requiring "network neutrality" for wireless telecommunications services is inherently about whether to impose prohibitions on the ability of network operators to control their vertical relationships. Antitrust analysis is well suited to analyze whether a wireless network neutrality rule is socially beneficial. Implementing network neutrality rules would be akin to using a per se antitrust rule regarding vertical relationships instead of the rule of reason analysis typically applied to vertical relationships in antitrust. Per se rules are used to prevent actions that rarely, if ever, have any procompetitive benefits, such as price-fixing agreements. Rule of reason analysis is used when there are potential efficiency gains from the actions under investigation. Some vertical practices of the wireless carriers, such as bandwidth restrictions, may appear to be anticompetitive, but may also have plausible efficiency justifications so should be judged under rule of reason analysis. Economic examination of the wireless industry shows significant competition between networks, which reduces the concern about vertical relationships, but also shows some areas that should be monitored by antitrust and regulatory authorities. We propose several regulatory changes that would likely increase wireless competition and lessen the perceived need for prophylactic network neutrality rules while at the same time allowing efficiency-enhancing vertical relationships.
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"Modularity, Vertical Integration, and Open Access Policies: Towards a Convergence of Antitrust and Regulation in the Internet Age,"
Department of Economics, Working Paper Series
qt4dh7q2dd, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Farrell, Joseph & Weiser, Philip J., 2003. "Modularity, Vertical Integration, and Open Access Policies: Towards a Convergence of Antitrust and Regulation in the Internet Age," Competition Policy Center, Working Paper Series qt5ps3f7p9, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Joseph Farrell & Philip J. Weiser, 2003. "Modularity, Vertical Integration, and Open Access Policies: Towards A Convergence of Antitrust and Regulation In The Internet Age," Industrial Organization 0303007, EconWPA.
- Beard, T Randolph & Kaserman, David L & Mayo, John W, 2001. "Regulation, Vertical Integration and Sabotage," Journal of Industrial Economics, Wiley Blackwell, vol. 49(3), pages 319-333, September. Full references (including those not matched with items on IDEAS)
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