مالکیت متقابل حاملان ارتباطات سیمی و بی سیم: هم افزایی یا تبانی؟

This paper examines whether the ‘cross ownership’ of wireline and wireless communications carriers is socially beneficial or harmful, and therefore should be allowed or regulated. We analyze a generic model of cross ownership of the firms which produce different but inter-related services. We show that, first, if both of the wireline and wireless industries are monopolistic, cross ownership results in social gains when the two services are complements, and social losses when they are substitutes. Secondly, if the wireless industry is sufficiently competitive, there’s little or no welfare loss from cross ownership. Finally, we briefly address the effect of network externality on the welfare consequences of cross ownership.

The central question of this paper is whether the ‘cross ownership’ of wireline and wireless communications carriers is socially beneficial or harmful, and therefore should be allowed or regulated.1 It is widely observed in the telecommunications market that the wireline and wireless communications carriers own partial or full shares of each other’s equity. One reason for this is that in many countries such as the US, Australia, China, Japan, and Korea, the governments awarded one of the commercial cellular licenses to the wireline incumbents or their subsidiaries from the late 1980s. Another reason is that there have been many attempts by the wireline and wireless carriers to acquire the control of each other in the era of digital convergence. While the cross ownership of the firms producing substitutes is known to be socially harmful (Farrell and Shapiro, 1990, Malueg, 1992, Reitman, 1994, Reynolds and Snapp, 1986 and Salant et al., 1983), what can be said on the cross ownership of the firms in different but inter-related industries, such as wireline and wireless communications industries?2 To address the question, we focus on two factors; the substitutability of wireline and wireless services and the degree of competition in the industries. Firstly, there exists mixed empirical evidence on whether wireline and wireless services are substitutes or complements (Gruber, 2001, Gruber and Verboven, 2001 and Sung and Lee, 2002). Gruber and Verboven (2001) and Sung and Lee (2002) demonstrate with the data of European Union countries and Korea, respectively, that the wireless service is replacing the wireline service, so the two services are becoming substitutes. Gruber (2001), on the other hand, shows that in Central and Eastern Europe the increase in the demand of the wireless service is proportional to the size of the wireline network, so they are still complements.3 In this paper, we consider both possibilities in the context of cross ownership. Secondly, in many countries, the wireline communications industry remains as a de facto monopoly. And, the wireless industry is usually more competitive than the wireline one. Also, the degree of competition in the wireless market varies from a virtual monopoly (Korea, Japan, etc.) to competition (United States, England, Germany, Canada, Australia, etc). In this paper, we consider both monopolistic and competitive wireless industries. With a generic model of cross ownership we derive some policy implications for the telecommunications industry. Our main conclusions are, firstly, when both wireline and wireless industries are monopolistic, cross ownership results in social gains if they are complements and social losses if substitutes. Secondly, if the wireless industry is sufficiently competitive, there is little or no welfare loss from the cross ownership, while the social gains from the cross ownership might decrease. This result might greatly alleviate antitrust authorities’ concern about cross ownership. Finally, we note that while the substitutability of the two services is growing, it is also true that the two services are enhancing the demands of each other (i.e. network externality). We show that network externality can improve or exacerbate the welfare problems of cross ownership. This paper can be distinguished from the previous research on cross ownership, largely in two respects. Firstly, while most of the previous studies on cross ownership deal with the case of substitutes, we allow the possibility that the firms who engage in cross ownership arrangements belong to different but inter-related industries. Put differently, our analysis includes the case of complements as well as that of substitutes. As will be shown in the following sections, whether the two services are substitutes or complements is critical in determining the social desirability of cross ownership. Secondly, we examine the effect of competition on the welfare consequences of cross ownership. Salant et al. (1983) examine a similar ownership issue, but in their model the total number of firms in the industry is fixed. It is the number of firms which engage in horizontal merger that is variable. In our model, the total number of firms in an industry (therefore, the degree of competition) changes. The organization of the paper is as follows. The model is presented in the next section. In Section 3, we analyze the model and examine the welfare consequences of cross ownership in different industry situations. Some policy implications and examples from the real world are discussed in Section 4. Finally, Section 5 contains the conclusion.

The main conclusion of this paper is that the choice of policy remedies for an ownership problem should depend crucially on the characteristics of the services and the structure of the industries. A right remedy at one time might turn out to be a wrong one as these factors change. Therefore, the introduction of any policy measure concerning cross ownership issues should be preceded by a thorough examination of the relationship of the services and the competitiveness of the industries. In this paper, though we confined our discussion to the telecommunications industry, potential applications of the analysis would be numerous. From our analysis, we can draw policy implications also for any pair of industries where cross ownership is occurring or is likely to occur in the future and the characteristics of the services are changing over time.18 For instance, telecommunications and broadcasting sectors can be possible candidates for further research with the trend of liberalization and technological convergence.