Pricing calls to mobiles: analysis of the UK Monopolies & Mergers Commission Reports on mobile termination charges

The UK Monopolies and Mergers Commission (MMC) nine-month inquiry into fixed-to-mobile termination charges provides an exhaustive analysis of competitive and cost factors in mobile telephony. Its recommendations are discussed and compared with those of the telecommunications regulator, OFTEL, which referred the mobile operators to the MMC after failure to agree a further reduction in charges in early 1998. The MMC, following the same general statutory duty required of OFTEL, to promote competition under the Telecommunications Act 1984, provided a radically different analysis and disagreed with most of OFTEL's specific proposals suggesting that some were anti-competitive. As telecommunications regulators are increasingly required to implement pro-competitive regulation, the MMC's reports show that the evolving approach of sectoral regulators contains some significant flaws.     

Improving the food environment in kindergartens and schools: An overview of policies and policy opportunities in Europe

Childhood obesity and unhealthy nutrition are high on the European policy agenda because of their association with chronic diseases and due to the related social and economic burden. In 2014, the EU Action Plan on Childhood Obesity 2014–2020 was launched with an overarching goal to halt the rise of overweight and obesity in children by the year 2020. To facilitate the implementation of the Action Plan, the Directorate-General for Health and Food Safety of the European Commission provided support to bring together 25 Member States plus Norway for a Joint Action on Nutrition and Physical Activity (JANPA). The current paper is based on the results of JANPA and presents the explored policy options to improve children's nutrition by targeting the food environment in and around kindergartens and schools. We conclude that for effective actions countries need to combine various mutually reinforcing policies in parallel, including the provision of healthy foods, lowering the availability of unhealthy foods, restricting marketing, and promoting education. Success will depend on the coherence of messages and on the engagement of a wide range of stakeholders and sectors. Evaluation should be carefully designed, using indicators of progress towards the goal of improving diet and reducing obesity in children.     

A policy for UK sugar supplies

A substantial shift in the balance of UK sugar supplies has taken place since entry into the European Economic Community (EEC) as a result of an increase in the production of domestic beet sugar, a fall in consumption, and a reduction in cane sugar imports. This shift in favour of beet sugar would have been greater had the domestic beet sugar industry been able to take full advantage of the increase in production quotas since 1975 under the Community's common sugar policy. A further increase in domestic beet sugar production might yet take place now that the Community's new sugar regulation, which was to have come into force in July 1980, has had to be deferred to 1981. The European Commission has proposed that under the new sugar regulation production quotas should be cut to reduce the size of the Community's structural sugar surplus. The UK government has issued a statement which welcomes the Commission's proposal to reduce the Community's sugar surplus but rejects any cuts in production quotas which would restrict the expansion of its own beet sugar industry.¹     

Regulation and the promotion of investment in next generation networks—A European dilemma

The paper discusses the dilemmas facing European regulators (the European Commission and the national regulatory authorities) over the promotion of investment in Next Generation Access Networks (NGANs). Whereas the US has adopted a deregulatory approach and parts of Asia takes an approach linked to industrial policy considerations, the EU has largely left the process to operators working subject to a framework of regulation of access. While this may be enough to elicit investment where there is competition among networks, the incentives to invest are weaker where there is only one fixed network, as is the case in most of the territory of the EU. In reaching this view, the paper examines the prospects for competition from both wireless and municipal networks. It recommends that steps be taken fully to mobilise incentives to invest in NGANs where there is competition. Elsewhere, it may be necessary to consider a broader range of policies to create conditions for investment.     

Path dependencies versus efficiencies in regulation: Evidence from “old” and “new” broadband markets in the EU

This paper examines the determinants of sector-specific regulation imposed on broadband markets related both to efficiency objectives of regulators and to those of narrowly defined interest groups. We test hypotheses derived from the normative and positive theoretical literature employing recent panel data on 27 European Union member states taking into account endogeneity of the underlying regulation and market structure variables. Our empirical specification employs three different estimators based on instrumental variables in order to identify causal effects. We find evidence supporting both regulators pursuing normative objectives and inefficiencies related to regulatory path dependence, bureaucracy goals and an inadequate consideration of competition from mobile broadband networks. Our results call for adjustments in the institutional design of the decision-making process under the current European Union regulatory framework.     

Predatory pricing and foreclosure in Canadian telecommunications

This article provides a historical perspective and current data on predatory pricing in the Canadian telecommunications industry. It is a rejoinder to another article in Telecommunications Policy, by Steven Globerman, which argued that tighter regulation of the Canadian telephone industry is unnecessary to prevent anticompetitive abuses in the industry. The author argues that predatory pricing has been an enduring feature of the industry, and precipitated the need for regulation in the first place. In the light of the evidence provided on activities and reorganization by the largest telephone company, it is argued that a high degree of deregulation has already taken place and regulators should contemplate means of reestablishing regulation.     

Olive oil in the EC: Gift from the gods or Trojan Horse

The European Commission fears huge olive oil surpluses as a result of Spain's accession to the Community. It believes it can prevent this, at great cost, by increasing consumer aid for olive oil and adopting a protectionist policy towards other vegetable oils and fats. Thus, the burden would be shifted to consumers of other products and the outside world. Trade relations would suffer. The author considers that the Commission's analysis is unfounded and the Commission's remedies should be questioned. The author also points to possible budgetary savings in the Community's expenditure on olive oil.     

An assessment of the equality of access and no-regulation approaches to next generation networks

The European Commission believes that for the regulation of next generation fixed telecommunications networks the continuity approach is preferable to the equality of access approach and the no-regulation approach. According to the European Commission, (i) functional separation eliminates discrimination and promotes competition, but should only be used as a measure of last resort because it involves various complex trade-offs, whereas (ii) the no-regulation approach fosters investment, at the cost of sacrificing competition. The article agrees that functional separation involves complex trade-offs but disputes the assertion that functional separation necessarily eliminates discrimination and promotes competition. In addition, the article also establishes conditions under which the no-regulation approach does not reduce competition.     

The economics of adventitious presence thresholds in the EU seed market

Since settling on its mandatory labeling rules for genetically modified (GM) foods in the late 1990s, the European Commission has considered a number of times setting tolerance levels (thresholds) for the accidental presence of GM material in conventional seeds. In every case, it has opted to defer the decision. In the absence of such thresholds, current European labeling laws require that seeds be labeled as GM if they contain any detectable trace of GMOs approved for cultivation in the EU. Conventional seeds with detectable traces of GMOs that have not been authorized for cultivation cannot be sold in the European market altogether. As the acreage of GM crops has continued to grow at a fast pace around the world, industry calls to the EU Commission for setting “practical” adventitious presence (AP) thresholds for conventional seeds in the EU have multiplied. In this paper, we examine the economics of alternative AP thresholds for conventional seeds in Europe from the perspective of those who must comply with the regulation – EU seed firms. Specifically, we first examine the operational changes that might be necessary for seed firms to comply with alternative AP thresholds for conventional seeds. Then, we analyze the associated market uncertainties, compliance costs and their implications on firm and industry competitiveness.     

The impact of convergence on regulatory policy in Europe

In December 1997, the European Commission published a Green Paper on the regulatory implications of the convergence of telecommunications, media and information technology sectors. The article starts with a look at the consultation process, and goes on to discuss some of the substantive issues raised. Without repeating material already evident in the Green Paper itself, it attempts to clarify the difference between Community and national approaches to regulation. Some ideas on the basis for national regulation are then explored, as are notions of the balance between the application of competition rules and sector-specific regulation in a converged environment.     

The European Single Market in Electricity: An Economic Assessment

The European single market in electricity has been promoted vigorously by the European Commission since 1996. We discuss how national electricity markets and cross-border electricity markets have been reshaped by the process. We examine the Commission’s own work on evaluating the benefits of the single market. We look at the wider evidence of impact on prices, security of supply, the environment, and innovation. We conclude that the institutional changes are extensive and there has been significant market harmonisation and integration. However, the measured benefits are difficult to identify, but likely to be small. This is partly because over the same period there has been a large rise in subsidised renewable generation that is driven by the decarbonisation agenda.

     

Reform of the CAP : Impact on the Third World

The European Community is under pressure to reform the CAP, mainly due to internal financial reasons. Proposals have been put forward by the EC Commission that reform the CAP with respect to milk, oils and fats, and corngluten and citrus pellets. The authors look at the impact of these proposals on developing countries. They conclude that the effect will be to increase non-tariff barriers to trade and increase the cost of food production both in and outside the EC.     

Accounting for ARPU: New evidence from international panel data

Average revenue per user (ARPU) is commonly used by regulators and industry observers to compare the performance of mobile telephony markets. Under the new EU electronic communications regulatory framework, some national regulatory authorities (NRAs) have linked higher ARPU with ‘significant market power’. This paper empirically examines the determinants of ARPU in a systematic way, taking account of service quality, market environment, regulation and quantity of service. The robust results suggest that concentration may not be a reliable indicator of competition in mobile markets; there are economies of density in mobile markets; and higher GDP per capita increases ARPU.     

Ver?nderungen in der europ?ischen Finanzmarktregulierung k?nnten zur Anwendung der Basler Eigenkapitalrichtlinien auf den Energiehandel f��hren

In its consultation paper regarding the revision of the Markets in Financial Instruments Directive (MiFID) from December 2010, the European Commission is considering to remove the current exemption for energy and commodity trading companies fully or at least to narrow the exemptions down. In this case the regulatory framework which is currently only in place for banks and financial companies could become effective for those companies. Because of the potentially significant consequences, it is reasonable for energy companies which have trading activities, to reflect the potential requirements even today. This article discusses the potential changes in the regulation and describes the consequences as well as potential areas of challenges in the application of banking regulation in energy trading.     

Third generation new entrants in the European mobile telecommunications industry

This paper focuses on new entrants within the European mobile telecommunications industry. More particularly, the paper identifies those new entrants that emerged from the third-generation (3G) licensing process across Europe before examining how they have fared. Four operators seeking to become new entrants across a range of countries are identified, although only one of them—Hutchison Whampoa trading as ‘3’—is considered to be fully active as a 3G new entrant. It is argued that the success of Hutchison Whampoa to date has been patchy, and that a supportive parent company has significantly contributed to its ability to remain active.     

25 years of European merger control

We study the determinants of common European merger policy over its first 25 years, from 1990 to 2014. Using a novel dataset at the level of the relevant antitrust markets and containing all relevant merger cases notified to the European Commission, we evaluate how consistently arguments related to structural market parameters – dominance, rising concentration, barriers to entry, and foreclosure – were applied over time and across different geographic market definitions. On average, linear probability models overestimate the effects of structural indicators. Using non-parametric machine learning techniques, we find that dominance is positively correlated with competitive concerns, especially in markets with a substantial increase in post-merger concentration and in complex mergers. Yet, its importance decreased following the 2004 merger policy reform. Competitive concerns are also correlated with rising concentration, especially if entry barriers and foreclosure are of concern. The impact of these structural indicators in explaining competitive concerns is independent of the geographic market definition and does not change over time.     

Convergence and new regulatory frameworks: A comparative study of regulatory approaches to Internet telephony

As an archetype of convergence, Internet telephony has been questioning the continuing appropriateness of the current telecommunications policy and regulation. This article examines how policy makers and regulators in the US, the EU, Japan and Singapore have responded to the challenges brought about by Internet telephony. Their common approach seems to apply the existing regulatory framework to this new service. The authors argue that those responses will not be aligned with the dynamically changing communications environment and explain two key shifts taking place in the communications industry that should be taken into account to form more appropriate regulatory frameworks.     

Determining the level of regulation in EU telecommunications. A preliminary assessment

The attention of the EU is currently focused on which aspects of telecommunications should be regulated at a national and which at a European level. The paper argues that in practice this is not an ‘either/or’ question, but a question of the degree of regulatory detail at the European level. The criteria for making choices on this dimension should be the standard ones of efficiency, equity, accountability and (in this case) consistency with the single market. The presence of externalities favours a central solution, while reliance on local information and a desire for political accountability favour decentralization. A number of possible regulatory frameworks are analysed, including the creation of an independent European regulator. In many contexts, some form of policy coordination is preferable to the creation of new centralized institutions.     

Teleinformatics speakers discuss European and US constraints

Teleinformatics 79', sponsored by UNESCO, the Commission of the European Communities, and the International Council for Computer Communication, organized by l'Association Francaise pour la Cybernetique Economique et Technique, Paris, 11–13 June 1979.     

An econometric analysis of the European Commission's merger decisions

Using a sample of 96 mergers notified to the European Commission and logit regression techniques, we analyse the Commission's decision process. We find that the probability of a phase-2 investigation and of a prohibition of the merger increases with the parties' market shares. The probabilities increase also when the Commission finds high entry barriers or that the post-merger market structure is conducive to collusion. We do not find significant effects of “political” variables, such as the nationality of the merging firms.