Bagging bundle benefits in broadband and media mergers: Lessons from Sky/Vodafone for antitrust analysis

The historic precedents in telecommunications antitrust findings have tended towards finding harm to competition when network operators integrate downstream and bundle the provision of applications and services. The reason for this is that market power in network provision is thought to be extended into the applications market(s). More recently however, proposed mergers have been between telecommunications and media distribution firms, both of whom have some degree of market power, already sell their own services in bundles, and who may or may not have been offering combined bundles already via contractual agreements. Examples include Sky/Vodafone in New Zealand, and Time Warner/AT&T in the United States as well as Vodafone/Unitymedia in Germany and Media Capital/Altice in Portugal. These complex proposed arrangements pose challenges to competition authorities, whose legal and procedural rules and precedents, especially those defining the relevant markets affected by the merger or vertical integration activity, have been developed from the analysis of simpler cases. These precedents may not be sufficient to analyse current cases, characterized by multiple products catering to heterogeneous consumer preferences, and consumers are not constrained to buying only one variant of the products in each of the upstream and downstream markets.We illustrate the challenges by way of a case study of the proposed merger between Sky and Vodafone, declined by the New Zealand Commerce Commission in February 2017. Limitations in existing market definition processes and the evaluation of market power where bundling already occurs risk overlooking complex demand-side interactions that influence the profitability and efficiency of various structural and contractual strategic choices. We propose that classic merger and antitrust analysis based on econometric cost-benefit analysis can be augmented by using simulation and numerical analysis of a range of bundle offers expected to be relevant in decision-making. We develop a simple model and use it to illustrate how it may be used to inform broadband and content mergers, and other complex antitrust cases, such the assessment of the effects of two-sided markets and firm pricing decisions.     

Evaluating Political Risk Forecasting Models: What Works?

Definitions of “political risk” abound, including with “assessments” or “analysis,” but even though ratings are widely used by investors, few understand either the theory behind particular instruments or what the ratings say about their potential investment. The assessment of political risk works backward from losses to foreign investors (not domestic) that could have been insured or protected, to a determination of how high the risk is, what the cost of the likely loss might be, the type of insurance coverage that might be necessary, and then to what an investor should be willing to pay to protect against that risk. A wide range of potential losses and potential causes of those losses is covered by the many political risk assessment firms and indices that are available to potential investors. BERI, the PRS Group, ICRG, the Eurasia Group, PERC (Hong Kong), and many others provide an array of ratings that investors can employ in making their choices. Few of these focus on the critical element of forecasting. Insurance doesn't relate to circumstances of the moment but rather those of the future. What will they be? Just a few of the risk assessments (PRS, BERI, ICRG) deal explicitly with the future, as good as that might be. Few also deal with the matter of risks to particular industries, companies, regions of a country, or external circumstances (what are the country's neighbors up to?). This article offers some suggestions on improving the political risk assessment business. © 2014 Wiley Periodicals, Inc.     

Consumption and communication perspectives of IT in a developing economy

Technological innovations are important sources of competitive advantage when there is a balanced rate of adoption that helps organisations maintain or improve performance levels. This paper synthesises and builds on efforts to conceptualise the adoption and implementation of technologically induced customer services in developing countries. Its point of departure is recent advances in computer-mediated marketing environments (CMMEs). It assesses relationships between customer services and evolving technologies in the provision of services in the banking sector. Using phenomenological hermeneutics and a case study approach, we iteratively engaged with data that emerged to identify core values and community-based values. These facets were further developed into seven main issues (core values: quality, education and reach, and community-based values: efficiency, usability, control and security). The paper offers practical steps by which companies and institutions may counter these issues and the theoretical implications for wider considerations are discussed.     

Accounting Scandals: Where were the CFOs?

Amid the epidemic of corporate scandals and plummeting market values, the heads of corporate finance functions have often been conspicuous by their absence.     

Is There a Third Way for Industrial Relations?

There has been little systematic analysis of what the ‘Third Way’ means in the sphere of industrial relations. This paper examines the record of the New Labour government in order to evaluate the distinctiveness, innovation and coherence of its industrial relations policy. It argues that many of the limitations of this policy result from the institutional context within which it was introduced. In comparative perspective, Third Way industrial relations can be thought of as a policy adaptation specific to centre–left governments in weakly co‐ordinated liberal market economies.     

The quality and effectiveness of marketing strategy: Effects of functional and dysfunctional conflict in intraorganizational relationships

By examining only dysfunctional conflict and ignoring functional conflict, empirical research in marketing has presented only part of the story. This research offers the first systematic look at the antecedents and consequences of both functionaland dysfunctional conflict in intraorganiational relationships. The authors develop and empirically test a causal model for key organizational antecedents of new product strategy quality and market performance. They find that dysfunctional conflict in the decision-making process has deleterious consequences for quality of strategy and market performance, whereas functional conflict improves both quality of strategy and performance. Specifically, organizational design characteristics such as formalization, interdepartmental interconnectedness, low communication barriers, and team spirit improve new product performance by enhancing functional conflict, whereas centralization and high communication barriers lower new product performance by increasing dysfunctional conflict. A post hoc test for common method bias or variance suggests that bias or variance alone cannot explain these findings. His general research interests focus on strategic issues relating to internal relationships, market learning, and organizational context of marketing strategy. His research has been published in theJournal of Marketing, Journal of Business Research, Journal of Advertising Research, Journal of Advertising, andJournal of Services Marketing, among others. His general research interests focus on strategic issues relating to relationship marketing, firm performance, sustainable competitive advantage, timing of market entry, and information technology. His past research has been published in theJournal of Marketing, Journal of Business Research, Journal of Services Marketing, andMarketing Education Review, among others. His research interests are in the areas of marketing research methods, structural equations modeling, cellular automata theories and methods, and Taoist methodologies for marketing strategy. His research has been published in theJournal of Marketing, Journal of Marketing Research, andJournal of the Academy of Marketing Science, among others.     

An alternative approach to relative indices of development and potential for change of the nation-state

Quantitative indices are proposed to reflect the degree of development and the potential for change of the nation-state. The former index is based upon the intensity of energy consumption, while the latter is defined as the product of agricultural land per capita and gross national product per capita. It is shown that acceptable levels of some welfare functions are achieved above a critical energy intensity called the development threshold, and it is postulated that above a higher critical level of energy intensity significant environmental deterioration will occur. Data is presented for 104 countries and high levels of change potential are shown to be correlated with a relatively large number of options for further development. On the other hand, very low levels of change potential are found in countries which have difficulty in supporting their populations. It is postulated that change potential is more useful than either population density or poverty as an indicator of when a country is in need of a vigorous population policy. It is concluded that below the development threshold further industrialization is beneficial while above it this may not be true. It is also concluded that at high levels of the change potential and at intensities below the development threshold high population growth rates may be tolerated.