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Convergence Mergers: Where’s the Relevant Market?

Convergence Mergers: Where’s the Relevant Market?. Glenn B. Manishin Practising Law Institute — San Francisco, August 2000. Telecom Mergers Redux. 1999 — e.g., BA/NYNEX, SBC/Ameritech DOJ and FCC act at cross-purposes

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Convergence Mergers: Where’s the Relevant Market?

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  1. Convergence Mergers: Where’s the Relevant Market? Glenn B. Manishin Practising Law Institute — San Francisco, August 2000

  2. Telecom Mergers Redux • 1999 — e.g., BA/NYNEX, SBC/Ameritech • DOJ and FCC act at cross-purposes • FCC imposes costing/OSS and sep. sub. conditions in view of potential competition • 2000 — e.g., AT&T/MOne, WCom/Sprint • Improved agency coordination • DOJ applies traditional LD market definition • Incremental issues (cable concentration v. broadband competition) Practising Law Institute

  3. Changing Market Definition(s) • Local v. long-distance telecom (and Section 271) • Telecom v. Internet transport • Broadband v. cable television • Landline v. wireless • Portals v. gatekeepers Practising Law Institute

  4. Dueling Doctrine(s) • Market definition • Clayton Act v. “public interest/diversity” • Interconnection obligations • Essential facilities v. “necessary and impair” • Cable broadband unbundling (“open access”) • Refusal to deal v. Title II v. Title VI Practising Law Institute

  5. DOJ Institutional competence Competition standard with concrete guidelines H-S-R Act imposes timing restraint FCC Record of parties and analysis Public interest “sliding scale” > Clayton Act License transfer provides policy leverage/extortion Relative Agency Competence Practising Law Institute

  6. Open Access and AOL/TW • Neither horizontal nor vertical overlaps • Politics makes strange bedfellows • Content v. caching v. messaging • Impact of City of Portland • Limits of “voluntary” commitments • Externalities: • Broadband build-out; DSL competition • AOL overreaching (IM) Practising Law Institute

  7. Antitrust Unilateral refusals to deal permissible Narrow Section 2 exception for firms with market power Market definition differentiates video and Internet access Communications 1996 Act not reflect “convergence” Proponents assume cable has/will have market power Title II (carrier) v. Title VI (video) v. diversity policies Doctrinal Conflict Practising Law Institute

  8. Conclusions • Doctrinal instability will continue as agencies and private parties temporize • Market definitions still wedded in 20th Century notions • Open access raises core conflict between government interventionism and long-term market development • Political pressures will only increase! Practising Law Institute

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