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Functional separation in Swedish broadband market: Next step of improving competition


  • Teppayayon, Orada
  • Bohlin, Erik


Technological development together with liberalization policy has led to competition in the telecommunications market. Broadband has been recognized as a driving force in the social and economic development of nations, and many countries have introduced policies and/or regulatory frameworks to improve competition in broadband markets. An evolution can be seen from the 1980s until the present day through open access to local loop unbundling to several degrees of separation including functional separation. There are several countries implementing functional separation such as the UK, Italy, Sweden and, recently the EU. It has been suggested that functional separation can be an effective policy for increasing competition in broadband markets under certain circumstances. Sweden has implemented functional separation by amending the Swedish Telecommunications Act in 2008 to include mandatory functional separation as one of the powers of the PTS, the Swedish telecommunications regulator. Although TeliaSonera, the incumbent fixed line operator decided to voluntarily separate part of their business, the amendments to the law were debated with arguments similar to the debates in the EU following the new regulatory framework implemented in 2009. Against this background, this paper provides an overview of the development of functional separation in the EU and European countries such as Sweden and the UK. The paper also provides a theoretical and empirical analysis of the implementation of functional separation. The evolution of functional separation in Sweden is explained and ends with a discussion of the implementation of functional separation in the Swedish broadband market.

Suggested Citation

  • Teppayayon, Orada & Bohlin, Erik, 2010. "Functional separation in Swedish broadband market: Next step of improving competition," Telecommunications Policy, Elsevier, vol. 34(7), pages 375-383, August.
  • Handle: RePEc:eee:telpol:v:34:y:2010:i:7:p:375-383

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    References listed on IDEAS

    1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    2. Fabian KIRSCH & Christian von HIRSCHHAUSEN, 2008. "Regulation of NGN: Structural Separation, Access Regulation, or No Regulation at All?," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(69), pages 63-84, 1st quart.
    3. Pittman Russell, 2005. "Structural Separation to Create Competition? The Case of Freight Railways," Review of Network Economics, De Gruyter, vol. 4(3), pages 1-16, September.
    4. Russell Pittman, 2003. "Vertical Restructuring (or Not) of the Infrastructure Sectors of Transition Economies," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 5-26, March.
    5. P.W.J. De Bijl, 2005. "Structural Separation and Access in Telecommunications Markets," Competition and Regulation in Network Industries, Intersentia, vol. 6(2), pages 95-115, June.
    6. Cave, Martin, 2006. "Six Degrees of Separation : Operational Separation as a Remedy in European Telecommunications Regulation," MPRA Paper 3572, University Library of Munich, Germany.
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    Cited by:

    1. Calzada, Joan & Martínez-Santos, Fernando, 2014. "Broadband prices in the European Union: Competition and commercial strategies," Information Economics and Policy, Elsevier, vol. 27(C), pages 24-38.
    2. Xia, Jun, 2012. "Competition and regulation in China's 3G/4G mobile communications industry—Institutions, governance, and telecom SOEs," Telecommunications Policy, Elsevier, vol. 36(7), pages 503-521.
    3. Brito, Duarte & Pereira, Pedro & Vareda, João, 2011. "An assessment of the equality of access and no-regulation approaches to next generation networks," Telecommunications Policy, Elsevier, vol. 35(9), pages 818-826.
    4. Xia, Jun, 2012. "Reprint of: Competition and regulation in China's 3G/4G mobile communications industry—Institutions, governance, and telecom SOEs," Telecommunications Policy, Elsevier, vol. 36(10), pages 798-816.
    5. Yang, Yu & Song, Luona & Lv, Tingjie & Chen, Xia, 2017. "Analysis on the Key Factors of the Network Separation in China in the Era of Telecommunications 4.0," 14th ITS Asia-Pacific Regional Conference, Kyoto 2017: Mapping ICT into Transformation for the Next Information Society 168550, International Telecommunications Society (ITS).


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