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Means not ends: Deterring discrimination through equivalence and functional separation

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  • Cadman, Richard

Abstract

It is sometimes forgotten that the much debated remedy of functional separation is simply a means to an end. That end is to reduce the incentives for discrimination by the integrated firm, which damages its downstream rivals and ultimately harms competition and the interests of consumers. Functional separation, though now considered to be at the centre of the Undertakings was in fact not mentioned by name in them. This article examines the background to the Undertakings and why non-discrimination and accounting separation remedies were inadequate to deter sabotage behaviour. It draws on interviews with UK industry participants to consider whether equivalence and functional separation are "fit for purpose". Although not perfectly implemented, the remedies have reduced discrimination and have helped to create the right conditions for dynamic efficiency gains in access and downstream broadband markets. However, there has been little or no "spillover" benefits into product markets not covered by the Undertakings.

Suggested Citation

  • Cadman, Richard, 2010. "Means not ends: Deterring discrimination through equivalence and functional separation," Telecommunications Policy, Elsevier, vol. 34(7), pages 366-374, August.
    • Handle: RePEc:eee:telpol:v:34:y:2010:i:7:p:366-374
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    Cited by:

    1. Howell, Bronwyn, 2014. "Separation anxieties: Structural separation and technological diffusion in nascent fibre networks," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106840, International Telecommunications Society (ITS).
    2. Cadman, Richard, 2019. "Legal separation of BT: A necessary incentive for investment?," Telecommunications Policy, Elsevier, vol. 43(1), pages 38-49.
    3. Howell, Bronwyn, 2014. "Structural Separation and Technological Diffusion," Working Paper Series 4353, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    4. Brito, Duarte & Pereira, Pedro & Vareda, João, 2011. "An assessment of the equality of access and no-regulation approaches to next generation networks," Telecommunications Policy, Elsevier, vol. 35(9), pages 818-826.
    5. Yang, Yu & Song, Luona & Lv, Tingjie & Chen, Xia, 2017. "Analysis on the Key Factors of the Network Separation in China in the Era of Telecommunications 4.0," 14th ITS Asia-Pacific Regional Conference, Kyoto 2017: Mapping ICT into Transformation for the Next Information Society 168550, International Telecommunications Society (ITS).
    6. Fabian Queder, 2020. "Towards a vertically separated broadband infrastructure: The potential role of voluntary separation," Competition and Regulation in Network Industries, , vol. 21(2), pages 143-165, June.
    7. repec:vuw:vuwscr:19314 is not listed on IDEAS
    8. Howell, Bronwyn, 2014. "Structural Separation and Technological Diffusion," Working Paper Series 19314, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

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