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.     

Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System

This paper investigates the expenditure patterns of South African households using detailed cross‐sectional expenditure and price data that varies across region and time. Linear expenditure system parameter estimates are used to calculate income and price elasticities for a number of product categories at different points of the income distribution. We find substantial variation in the price and income elasticities of demand for items across the income distribution, with the bottom quartile being extremely sensitive to increases in the price of food and clothing items, and the top quartile being as sensitive as households in developed countries.     

Socio-economic developmental strategies as retail performance indicators: A balanced scorecard approach

This research analyses the commitment to and use of ‘balanced scorecards’ by retailers in generating sustainable profitability, whilst contributing to socio-economic development in South Africa. An international literature review of scorecard frameworks, plans and reports by major retail companies and semi-structured dialogic interviews with a purposive sample of retail business stakeholders and government officials formed the methodology. By contrasting the literature and empirical insights, a summary of findings was generated, which conclude that most retailer scorecards (formal or informal) seek to balance financial with ‘cause-related marketing’ targets, but implementation differs according to factors such as company size, developmental maturity and managerial competence. Furthermore, collaboration between retailers and state institutions in scorecard management is not a reality, as has been achieved in other industries. It is therefore recommended that a Retail Charter scorecard framework be considered, to promote public/private-sector knowledge-sharing and socio-economic development.     

Reliability and relevance of fair values: private equity investments and investee fundamentals

Review of Accounting Studies - We directly test the reliability and relevance of investee fair values reported by listed private equity funds (LPEs). In our setting, disaggregated fair value...     

New bases for non-cancellable sickness insurance in Sweden

Abstract

Non-cancellable sickness and disability insurance—in Sweden known as long-term sickness insurance—has been carried on in Sweden since the beginning of the twentieth century; first by Eir since 1911, then by Valkyrian from 1912, and by Salus, a special company for physicians, since 1929. An account of the technical methods employed by Eir in sickness insurance is given in a paper which was read before the Ninth International Congress of Actuaries in 1930.1 In several important respects a new epoch has been established as regards sickness insurance in Sweden. On 1 January 1955 compulsory sickness insurance was introduced; and thus an essential part of the demand for sickness insurance was covered. At the same time three of the life assurance companies, Thule, Svenska Liv, and Städernas Liv have also begun to carryon the type of sickness insurance which had previously been effected only by the three companies mentioned above, and whose activities are restricted to sickness insurance. The apprehensions that might have been felt respecting the possible glut of the market were not confirmed; on the contrary, the interest in long-term sickness insurance appears to be increasing.     

New instruments – old practices? The implications of environmental management systems and extended producer responsibility for design for the environment

As the focus of environmental policy and management is shifting from cleaner production at the process level towards greener products, there is a need for new kinds of policy instruments and initiatives. Environmental management systems (EMSs) and extended producer responsibility (EPR) systems are efforts to overcome the limitations of the traditional regulatory approach. In this paper, I illustrate how EMSs and EPR systems have influenced the emergence of greener products in three case companies. These case studies are complemented by results from a survey on design for the environment in the electrical and electronics industry. Both the case studies and the survey indicate that the linkage between EMSs and product development is weak or completely missing. Therefore, the mere existence of an EMS can hardly be used as a convincing indicator of the implementation of an environmentally friendly design process. The results regarding the EPR systems are more positive. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Some reflections on different disability models

Abstract

As a retired actuary of life and health insurance the author has wished to summarize his experience and reflections about different systems of disability insurance. He wants to show how the premium technique of the “classic” Hamza process presented in 1900 as a model of the invalidity insurance technique without any element of recovery can be described for an active person by three alternative formulas of expected value of a disability indemnity. His of interest to observe that the second of these formulas can be applied to the technique of sickness insurance based on the probability of being sick. This technique is also used in British and Norwegian long term disability insurance. The third formula leads after modification to the Swedish sickness annuity technique and, further, to the technique of basic continuance tables used in U.S.A. In describing the classic process the author has used the discontinuous approach, but otherwise the continuous approach with integrals instead of sums has been preferred.

Methods of calculating the premium for “waiver of premium” have in this paper only been touched upon as a result of a modification of the sickness annuity technique. It has been found necessary to refrain from the opportunity to illustrate the interesting development of the invalidity technique according to Schoenbaum and later to Simonsen who introduced a series of transition probabilities between different states of activity and disablement.     

Regulating for telecommunications competition in developing countries: Papua New Guinea

Papua New Guinea is a low‐middle income, developing, Pacific country whose telecommunications market has developed under regulatory arrangements strongly influenced by Australian policymaking. Nevertheless, it demonstrates very weak performance compared to similar low‐middle income countries. Why does a country whose regulatory regime draws on current international recommended ‘best practice’ perform so poorly? We develop an inquiry framework based on World Bank and the International Telecommunications Union guidelines for assessing the effectiveness of regulatory arrangements in a developing country. The framework takes account of developing country challenges: limited capacity, limited commitment, limited accountability, limited fiscal efficiency, and trade‐offs between factors that take account of these limits. The analysis indicates the most likely explanation for poor performance derives from lack of investment and an unstable set of ownership arrangements constraining government‐owned Telikom from being an effective competitor. Weaknesses in regulator accountability provisions may have contributed to obscuring poor performance. Introducing at least one more foreign operator will improve outcomes only with clear separation of government ownership and regulatory activities and credible commitment from political agents to refrain from interfering in operations of both the incumbent firm and regulatory agencies.     

The value of Namibia's forest resources: Preliminary economic asset and flow accounts

A national forest inventory completed in 2004 enabled the development of preliminary forest resource accounts for Namibia. The total woody resources volume was estimated at 257 million m³. Forest products used for fuel, poles, timber and non-timber were included in the accounts, but charcoal production on private land was excluded. Forest use directly contributed some 3 per cent of the gross national product, N$1 billion (US$160 million), and the total direct and indirect economic impact of forest use in the broader economy was some N$1.8 billion (US$288 million). The standing forest assets had an estimated capital value of N$19 billion (US$304 million), comparable with the values for fish, minerals and wildlife. On a national level, stocks are underused. However, some localised over-harvesting occurs, which might be ameliorated through community forest management and trade in products, but capture of resource rent by government should be restricted to commercial forest use.