Working paper series // HfB - Business School of Finance & Management 75
The working report looks at the actual situation of the German broadband cable market in the context of merger control and sector specific regulation. A crucial problem in dealing with the cable market whether in antitrust cases or in the regulatory context is the precise assessment of the economic conditions, especially the arguable question if the network has still characteristics of a natural monopoly still a common argument in network industries. The report therefore uses the basic concept of the disaggregated identification of network-specific market power. The unique structure of the German broadband cable industry with its horizontal and vertical separation of the distribution network shows a highly contestable market with elements of competitive franchise bidding. On the other hand the cable market is suffering from that separation due to problems of inefficiency, especially in times of dynamic changes in communications with powerful intermodal competitors like Deutsche Telekom AG (DTAG) with an innovative IPTV infrastructure. To this date these market characteristics have been ignored.
Bottleneck broadband cable consumer surplus approach contestable markets disaggregated approach efficiency analysis essential facility franchise bidding market definition market dominance market power merger control network effects open field approach regulation remedies and conditions telecommunication networks total welfare standard