INTRODUCTION"Fee shifting" refers to the rules for deciding which party to a lawsuit will pay for the attorney fee costs of the suit.' The literature on fee shifting is extensive, and virtually every page of it contains statements or predictions concerning the effects of one fee system or another on the economic behavior of litigants or classes of litigants. 2 Most of these statements are based on intuitive reasoning; with few exceptions, 3 the literature does not contain logically rigorous models of the behavioral patterns that underlie the predictions. This is hardly surprising. It is extraordinarily difficult to model the behavior of litigants. Any attempt to do so quickly makes apparent the large number of more or less arbitrary assumptions that must underlie any firm statement about the effect of one method of fee payment versus another.This paper sets out to answer with rigor some questions about four distinct fee
High-speed or "broadband" Internet access currently is provided, at the local level, chiefly by cable television and telephone companies, often in competition with each other. Wireless and satellite providers have a small but growing share of this business. An influential coalition of economic interests and academics have proposed that local broadband Internet access providers be prohibited from restricting access to their systems by upstream suppliers of Internet services. A recent term for this proposal is "net neutrality." We examine the potential costs and benefits of such a policy from an economic welfare perspective. Using a property rights approach, we ask whether transactions costs in the market for access rights are likely to be significant, and if so, whether owners of physical local broadband platforms are likely to be more or less efficient holders of access rights than Internet content providers. We conclude that transactions costs are likely to be lower if access rights are assigned initially to platform owners rather than content providers. In addition, platform hardware owners are likely to be more efficient holders of these rights because they can internalize demand-side interactions among content products. Further, failure to permit platform owners to control access threatens to result in inadequate incentives to invest in, to maintain, and to upgrade local broadband platforms. Inefficiently denying platform owners the ability to own access rights implies a need for price regulation; otherwise, there will be incentives to use pricing to circumvent the constraint on rights ownership. Price regulation is itself known to induce welfare losses through adaptive behavior of the constrained firm. The impact on welfare might produce a worse result than the initial problem, assuming one existed. Much of the academic interest in net neutrality arises from the belief that the open architecture of the Internet under current standards has been responsible for its remarkable success, and a wish to preserve this openness. We point out that the openness of the Internet was an unintended consequence of its military origins, and that other, less open, architectures might have been even more successful. A policy of denying platform owners the ability to own access rights could freeze the architecture of the Internet, preventing it from adapting to future technological and economic developments. Finally, we examine the net neutrality issue from the perspective of the "essential facility doctrine," a tool of the common law of antitrust. The doctrine establishes conditions under which federal courts will mandate access by competitors to the monopoly platform of a vertically-integrated firm. Because local broadband Internet access is not today a bottleneck monopoly (there are several competitors and the market is at an early stage of development), the essential facilities doctrine would not permit reassignment of access rights from platform owners to competitors. We conclude that "net neutrality" is a welfare-reducing...
Franchising and renewing of franchises for cable television systems is an important urban policy issue. Of particular interest is whether franchise authorities ought to grant more than one franchise to provide cable service in a given area. This paper reports results of an empirical investigation into the cost structure of large, modern, urban cable systems. We find modest economies of scale in dimensions relevant to the feasibility of direct competition. The economies are not so large as to rule out the possibility that competition…whether direct or potential…can be an important disciplinary force in the marketplace. Copyright 1986 Western Economic Association International.
ANTITRUST LAWjouRNAL After China began its historic transition from a centrally planned economy to a market economy in the late 1970s, it gradually came to realize that good competition policies would be of vital importance to its economic growth. As a result, China began experimenting with reform measures and enacting antitrust laws and regulations aimed at promoting competition in its economy. At first, China adopted a piecemeal approach, passing laws and regulations dealing with isolated competition issues as they arose. As competition issues became increasingly prominent, China recognized the importance of having a comprehensive antitrust law. In 1994, China began its efforts to enact the Anti-Monopoly Law (AML), China's first comprehensive antitrust legislation. Thirteen years later, on August 30, 2007, China's National People's Congress (NPC) finally adopted the AML. 2 The AML has provisions found in most other countries' antitrust laws, such as the prohibition of horizontal agreements and abuse of market power, and requirements for pre-merger notifications and reviews. The AML also contains many provisions not typical of antitrust laws, such as provisions regarding State-Owned Enterprises (SOEs) in important economic sectors, trade associations, and monopolies created by government agencies.
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