Humberto Carrasco

'Regulation as a mechanism to encourage competition in the area of telecommunications in Chile '

Biography

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He has published articles in different journals and even published a book intitled  'IT Law: Electronic Contracts and System Supply Contracts'. He has participated as speaker in different conferences.

He is also Secretary-General ADI Chile and Secretary LACRALO - ICANN

Research outline

 

Regulation can have different reasons. Before liberalization of telecommunications, regulation established the parameters of the state-owned telecommunications company. Later, it specified the rights and duties of the incumbent. Hypothetically speaking, a higher degree of regulation is necessary to create new competitive markets and once progress has been made, a lesser degree of regulation is required in order to advance to ex-post regulation.

Deregulation is closely tied to this process. Although it is related to the idea of undoing or reversing something, there is no clear understanding of deregulation and its outcome has been questioned. The idea of re-regulation seems to be a better proposition since there is a reformulation of old rules and the creation of new ones. Nevertheless, the concept of “regulatory capitalism” is preferred because it more adequately captures the explosion of regulation in the Neo-Liberalism era.

Competition law has become an indispensable component of the regulatory framework, which can act through two pathways: 1.- Ex-post regulation utilizing traditional principles of competition law; 2.- Ex-ante regulation that seeks to introduce competition to a market.

The second kind of regulation has been called 'regulation for competition' or 'synthetic competition'. I would like to propose the concept of ‘emulated competition’ because it explains in a more appropriate way its legal nature and its intended and unintended effects. In order to develop this concept, the mutual influence between sectoral regulation and competition law will be analysed. Furthermore, related to the previous topic, the possibility of applying competition law to a case where there is a regulated market will be analysed.  The case law study will be the treatment of some abuse of dominance cases, particularly margin squeeze. There is no uniform response to this issue and some accept the joint applicability of sectoral regulation and competition law (the EU and Chile) and others reject it (the U.S.).

Following this analysis, it can be concluded that Chile appears to have its own unique model.  There is a strong and mutual influence between sector-specific regulation and competition law and no tension arises between these concepts. The Chilean model is influenced by the US with its consumer welfare goal and by the EU’s approach, which is focused on a blend of sectoral regulation and competition law.

The US, the EU and Chile have been chosen for comparative study in this context. The US, the EU and Chile started the process of liberalisation of the telecommunications markets early. The US essentially stumbled into the liberalization of telecommunications in the 1960s and 1970s. The UK was the first country in Europe that began the liberalisation and privatisation processes during the 1980s. At the same time, Chile started the same process. The comparison, inter alia, will allow to evaluate the effectiveness of differing regulatory strategies for the telecommunications sectors after 30 years.