Telecom Antitrust Handbook

American Bar Association, 2005 - 618 pages

"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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Title Page

Index

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

Copyright

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Telecom Antitrust Handbook

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Common terms and phrases

action addition agencies agreement alleged allow analysis anticompetitive antitrust laws application approved AT&T authority Bell cable calls carriers challenge claims Commission Communications companies compete competition competitors complaint concerns conduct considered consumers Corp costs court customers decision determine Directive discussed doctrine dominant downstream effects efficiencies enforcement entry example exchange federal filed finding firm Guidelines impose incentive increase incumbent industry input integration interconnection interest Internet involving issues joint venture license limited long-distance market power merger monopoly offer operators parties plaintiff potential practices profits prohibited proposed protection raise rates reason regulation regulatory relevant remedies Report restrictions result rivals rule Second share significant specific standard Supp supra note telecom telecommunications telephone television Trade transaction United vertical violation wireless

Bibliographic information

Title	Telecom Antitrust Handbook American Bar Association Section of Antitrust Law Monograph American Bar Association
Contributor	American Bar Association. Section of Antitrust Law
Publisher	American Bar Association, 2005
ISBN	1590315227, 9781590315224
Length	618 pages

Export Citation	BiBTeX EndNote RefMan

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Telecom Antitrust Handbook

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