Telecom Antitrust Handbook

Front Cover
American Bar Association, 2005 - Law - 618 pages
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"Since enactment of the Telecommunications Act of 1996, the telecommunications industry has evolved rapidly. Applying antitrust principles to an industry in flux has posed new challenges and produced a new body of governing precedents. This Guide is intended to serve as a comprehensive review of the applicable law and an invaluable resource for both telecom and antitrust practitioners who contend with the myriad competitive issues that arise in this fluid industry and fluid area of the law." -- from the Foreword, p. xiii.
 

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Contents

ECONOMIC UNDERPINNINGS THE ECONOMICS OF COMMUNICATIONS NETWORKS MARKET POWER AND VERTICAL FORECLOSURE...
1
C Basic Network Economics and Sources of Market Power in the Communications Industries
4
1 An Overview of Communications Networks
5
2 Economies of Scale
6
3 Economies of Density
7
4 Economies of Scope
8
6 Interconnection Standards and Compatibility
11
7 Price Regulation
12
b Horizontal v Vertical Relationships
267
2 Antitrust Implications of Particular Licensing Practices
268
a CrossLicensing and Patent Pooling
269
b Package Licensing
271
c Grantbacks
273
d Territorial and FieldofUse Restrictions
275
MONOPOLIZATION IN TELECOMMUNICATIONS MARKETS
279
2 Justice Department and Private Antitrust Litigation 197483
284

D Market Definition
14
2 The Link Among Market Definition Market Power and Competitive Effects
16
E Economic Theories of Vertical Foreclosure And Raising Rivals Costs
19
2 Economic Theories of Foreclosure
21
1 Opportunity Cost
22
2 The Single Monopoly Profit Critique
23
b Procompetitive Efficiency Reasons for Vertical Integration
24
1 Reducing Transactions Costs and Improving Coordination
25
3 Elimination Of Double Marginalization
26
1 Circumventing Regulation
27
2 Facilitating Price Discrimination
28
3 The New Industrial Organization Approach to Vertical Foreclosure
30
d Alternative Methods of Foreclosure
34
2 Price Squeeze
35
3 Tying and Bundling as Exclusionary Practices
39
3 Application to Telecommunications Markets
41
b Maintaining Divestiture Restrictions on RBOCs
45
c Price Regulation and Vertical Foreclosure
49
d Reciprocal Compensation as a Potential Foreclosure Vehicle
51
e Number HoardingNumbering Administration as a Potential Foreclosure Vehicle
54
HORIZONTAL MERGERS
57
B Overview of Legal Standards
58
b Application of the Sherman Act
63
c The 1992 Horizontal Merger Guidelines
64
d Mergers Among Potential Competitors
67
1 The Elimination of Perceived Potential Competitors
68
HSR Waiting Periods and Second Requests
69
2 The Communications Act
70
b The Standards Applied by the FCC
72
2 The Substantive Effect of the Public Interest Standard on Merger Review at the FCC
75
FCC REVIEW OF THE BANYNEX MERGER
80
C PROCEDURES FOR FCC MERGER REVIEW
83
a State Enforcement of Federal Law
84
b State Law
85
4 State Public Utility Laws
86
5 Local Franchise Laws
88
C Application of Legal Standards to Telecommunications Mergers
93
3 Market Concentration Entry and Expansion
94
4 Actual versus Potential Competition
99
5 Telecommunications as a Dynamic Industry
102
6 The Role of Network Effects
104
7 Failing Firms and Divisions
108
D Efficiencies
111
2 Efficiencies and the FCC
115
E Remedies
117
a Structural Relief
118
b Conduct Remedies
120
c Preliminary Injunctions
122
d Hold Separate Orders
124
2 FCC Remedies
126
F Private Enforcement
131
2 Deciding Whether and When To Sue
133
3 Preliminary Injunctions
137
4 Discovery
139
VERTICAL MERGERS
143
B The Vertical Integration of Telecommunications Markets
145
C Theories of Anticompetitive Harm
147
2 The Foreclosure Theory of Antitrust Harm
148
3 The Shift to a Focus on Raising Rivals Costs
149
D Application to the Telecom Industry
151
1 Vertical Integration of Interexchange ProviderEquipment Supplier with Wireless Provider
152
2 Vertical Integration of Interexchange Provider and Dominant Local ExchangeServices Provider
155
b United States v Sprint Corporation and Joint Venture Co
157
c ATTBritish Telecom
159
3 Vertical Integration of Internet Backbone Service Providers
161
b United States v WorldCom Inc and Sprint Corporation
162
c WorldComIntermedia
163
4 Vertical Integration of Interexchange Provider and Cable Provider
164
5 Vertical Integration of ISP and Cable Provider
165
JOINT VENTURES
171
2 Types of Telecommunications Joint Ventures
173
b Marketing Joint Ventures
174
c FullyIntegrated Joint Ventures
175
B Antitrust Analysis of Joint Ventures
176
1 Joint Ventures in the Courts
177
b The Rule of Reason
179
c Section 7 Analysis
184
2 DOJ and FTC Enforcement
185
a Competitor Collaboration Guidelines Application of the Per Se Rule
187
b Competitor Collaboration Guidelines Application of the Rule of Reason
189
2 The Collaboration Market
190
3 Continued Competition Among Participants
191
4 Entry
192
5 Cognizable Efficiencies
193
C Telecommunications Joint Ventures
194
2 NonAntitrust Factors Weighed
197
3 Anticompetitive Risks of Telecom Joint Ventures
198
b Loss of Potential Competition
202
Three Years Later
203
2 PrimeCo Personal Communications LP
205
3 Cingular SBCBellSouth Wireless
208
4 Ameritech US West and Qwest
211
c Market Exclusion and Access Discrimination
214
1 The Role of Infrastructure
215
d International Issues
216
1 MCIBritish Telecom
217
2 ATTBritish Telecom
218
3 SprintFrance TelecomDeutsche Telekom
221
RESTRAINTS OF TRADE
225
2 Intraenterprise Conspiracy
226
3 Per se v Rule of Reason Analysis
227
4 State Law vs Federal Law
230
B Horizontal Restraints
231
2 Market AllocationOutput Restriction
234
b Ancillary Services
236
d International Services Provided Via Undersea Cables
237
e International Services Via Satellite
238
3 Group Boycotts
239
b Issues for Virtual Networks
241
4 Information Exchanges Standard Setting and Protocols
243
1 The FTC Approach
245
2 Antitrust Concerns Specific to Information Exchanges
247
b Standards and Protocols
249
C Vertical Restraints
251
1 Vertical v Horizontal Relationships
252
2 Vertical Price Fixing
253
a Telecommunications Equipment
254
b Telecommunications Services
255
4 Exclusive Dealing
256
5 Tying
258
b Telecommunications Services
259
c The Computer Inquiries
260
d Joint Marketing Restrictions
261
e Telecommunications Equipment
263
6 MostFavored Nation Clauses
264
D Intellectual Property Licensing
265
1 The Intellectual Property Guidelines
266
b Private Litigation
286
3 The Telecommunications Act of 1996
288
4 Implementing the 1996 Act
293
B Elements of a Section 2 Violation
298
a Determining the Relevant Market
299
2 Geographic Market
303
b Possession of Monopoly Power
305
2 Other Factors That May Affect the Inference of Monopoly Power
306
3 How These Factors Apply to Telecommunications
307
2 Attempted Monopolization
308
C Particular Section 2 Theories
309
2 Monopoly Leveraging
312
3 Refusal to Deal
313
4 Price Squeeze
314
5 Raising Rivals Costs
318
6 Preannouncement
319
7 Predatory Pricing
320
b Average Variable Cost
321
c LongRun Incremental Cost
323
1 Pre1996 Act Authority
324
b Regulation as Fact of Market Life
326
c Regulation as Affirmative Defense
329
d Regulation as Remedy
330
E Remedies
333
b Damage Methodologies
334
2 The YardstickModel
336
3 Market Share Theory
337
c Burden of Proof
338
d Disaggregation
339
2 Equitable Relief
341
a Purpose Requisites and Burden
342
1 Controls on Conduct
343
A PRELIMINARY RELIEF
344
B PROSPECTIVE RELIEF
345
2 Structural Remedies
346
c Application of Antitrust Oversight to Regulated Industries
348
IMMUNITIES
353
B Verizon v Trinko
355
C The State Action Doctrine
356
1 The Midcal Test
357
2 State Action Immunity of Local Governments
358
3 The State Action Doctrine Applied to Telecommunications Cases
359
D Solicitation of Government Action
361
2 Petitioning the Government
363
1 Applicability to Telecommunications
364
1 Applicability to Telecommunications
366
B TARIFF FILINGS
367
c NoerrPennington Applied to Private Standards Bodies
368
d Sham Exception
369
1 Applicability to Telecommunications
371
e Government Acting as Buyer or Seller
373
E Inducement of Government Action By Improper Means
374
3 Use of False Information
375
4 Corruption Bribery Conspiracy with Public Officials
378
Implied Immunities
379
2 Implied Immunity and the FCC
381
Predatory Pricing
383
G Primary Jurisdiction
384
2 Primary Jurisdiction Referrals to the FCC
386
3 Primary Jurisdiction Referrals to State Regulatory Commissions
388
4 The Status of a Case Pending Primary Jurisdiction
389
H The Filed Rate Doctrine
390
2 The Doctrine as Applied in Telecommunications Cases
392
CONSUMER PROTECTION TRENDS
395
B Consumer Protection in the Telecommunications Marketplace
396
2 Cramming
401
3 Negative Option Billing
403
4 Deceptive Advertising
404
5 Unfair Practices
405
6 PayPerCall and Information Services
406
7 Collection Practices and Consumer Liability For Unauthorized Charges
409
8 Quality of Service
411
9 Telemarketing
412
10 Telephone Subscriber Privacy
416
C Jurisdiction over Unfair and Coercive Practices in the Deregulated Telecommunications Marketplace
418
2 State Response To Consumer Protection Issues
420
3 Private Response to Consumer Protection Issues
421
Tariffs the Filed Rate Doctrine and Other Vestiges of the Regulatory Era
422
E Future Trends
424
INTERNATIONAL ISSUES
427
2 Basic Principles
431
a Market Definition
432
b Particular Types of Conduct
434
2 Abuse Of Dominance and Other Civilly Reviewable Practices
437
3 Mergers
440
4 Fair Marketing Practices Misleading Advertising
445
5 Regulated Conduct Doctrine
446
3 Competition Law Principles Applied by the CR TC
447
4 Interplay Between the Jurisdictions of the CRTC and Commissioner in the Telecommunications Industry
449
a Matters Forborne or Exempted From CRTC Regulation
450
b Common CRTC and Commissioner of Competition Authority
451
c Exclusive CRTC Authority
452
f Conclusions
457
2 Outline of Antitrust Laws in the EU and EU Member States
461
1 Article 81 Prohibition of Anticompetitive Agreements Decisions and Concerted Practices
466
2 Article 82 Prohibition of Abuse of a Dominant Position
468
3 Article 86 Abolition of Exclusive or Special Rights
472
4 Merger Regulation
475
5 Reform of the Merger Regulation
479
b National Regimes
481
2 France
484
3 Germany
485
5 The Netherlands
487
3 Commission Decisions in the Telecom Sector
488
b Third Generation Mobile Infrastructure Sharing
490
c Mergers and Acquisitions in the Telecom Sector
491
1 TeliaTelenor
492
2 TeliaSonera
493
4 The Interaction Between Telecomspecific Law and Antitrust Law
494
b The Interaction Between the 1998 Regulatory Framework and Antitrust Law
495
c The New EU Regulatory Framework
496
d A New Era for Sectorspecific Regulation
503
AN OVERVIEW OF COMMUNICATIONS NETWORKS
505
2 Regulation of the PSTN
509
B Cable Television Systems
511
C Fixed Wireless Networks
516
D Commercial Mobile Radio Services
517
E Broadcast Television and Radio
522
F Satellite Networks
528
G Internet Access Networks
529
ADDITIONAL ECONOMIC CONCEPTS
533
2 Recent Developments
534
B Application of Vertical Foreclosure Theories to Telecommunications Markets
537
2 The Efficient Components Pricing Rule ECPR
539
TABLE OF CASES
543
INDEX
575
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