Regulation as a mechanism to encourage competition in the Chilean telecommunications market: towards the concept of emulated competition
Carrasco Blanc, Humberto Rolando
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This thesis proposes to determine the role of regulation that promotes competition in the telecommunications market in Chile. Regulation has been used in the telecommunications sector at different points in time to fulfil various market needs. Before liberalisation of the telecommunications market, regulation established the parameters of the state-owned telecommunications company. Later, regulations specified the rights and duties of the incumbent. Hypothetically, a higher degree of regulation is necessary to develop new markets, and once progress has been made, a lesser degree of rules is required. This heavier regulation has been called 'regulation for competition', ‘regulatory competition law’ or 'synthetic competition'. Instead, this research proposes the concept of ‘emulated competition’, which is useful to clarify the role of regulation as a mechanism to promote competition. To build the concept of ‘emulated competition’, the thesis reviews the relationship between sectoral regulation and competition law from a theoretical viewpoint. Subsequently, the thesis carries out a comparative analysis between the United States (US) and the European Union (EU) regarding the treatment of certain abuse of dominance cases, particularly with regard to ‘margin squeeze’. To study the Chilean model, the research reviews the constitutional framework of economic regulation and competition law, examining the evolution of pro-competition regulatory tools since the beginning of privatisation. Furthermore, the thesis analyses the case law and regulation issued by the Chilean competition authority in the same period. The analysed topic allows a review of how emulated competition operates in Chile. To sum up, competition law alone is not the best way to introduce competition in the telecommunications market. Therefore, sector-specific regulation has been used to promote competition. In some jurisdictions, it works together with competition law, such as in the EU and Chile. In others, they are incompatible, such as the US. Emulated competition rules could have a higher impact on competition law when they are complements. The research also proposes a model for considering non-economic objectives in competition law matters, and it is a breakthrough in the debate of how to incorporate them in such situations. Finally, the emulated competition concept provides a systematic way of dealing with the intended and unintended effects of pro-competition regulatory tools. The concept itself summarises the contribution to the literature.