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The Regulation of Merger in the Digital Crossing-over

This study first conducted a survey on and in-depth interviews with local communications and broadcasting undertakings, then reviewed the latest developments of law and practices in Japan, the United States, the UK and European Union with regard to their control of merger between and among communications and broadcasting undertakings. It comes to the following conclusion: 1. Relevant markets as defined by the Fair Trade Commission (FTC) should be broadened and the substitutability of goods and services from the demand side is worth further studying. 2. The analytical structure of the FCC should be followed by the FTC in order for it to make well-reasoned merger report. 3. When considering the positive effects on overall economic benefits of merger, following factors should be taken into consideration:(1) the reduction of marginal costs (more important than the reduction of fixed costs)(2)the facilitation of facility-based competition and (3) plurality. 4. For mergers that warrant control there should be formal hearing. 5. "The externalization of internal profits as a result of merger" should not be imposed as a condition for not allowing merger. 6. The fact that the CATV is facing more difficulties when crossing over to telecom should be taken into account by the FTC. 7. In the future, undertakings should be given the option of whether to notify the FTC and wait for its decision before the execution of merger.


Updated at:2010-01-13 15:58:54