Trends in Telecommunication Reform 2010-11 3.3.4 Addressing Vertical and Horizontal Finally, it is also possible that regulatory authorities Integration may reinstate ex ante regulation (i.e., re-regulate). Al-though re-regulation is likely to be an exceptional measure, changes in expected market outcomes or even regulatory errors may justify such a measure.38 In the technology-converged ICT environment, in-formation technology firms not traditionally associated with the provision of telecommunications services or equipment are entering new lines of business that may result in vertical and horizontal integration. Apple, for example, began as a computer company and now of-fers 3.3.3 Relying on Ex Post Regulation to Address Anticompetitive Practices various devices, such as the iPhone, that run a plat-form (Operating System - OS) that is tightly coupled Relying on ex post regulation to address competi-tive concerns in the ICT market requires the implemen-tation with its vertically integrated business of media distribu-tion of competition laws and regulations that are through iTunes and Apple TV, as well as applica-tions for mobile devices through the App Store. effective, enforced and suited to the country’s specific conditions. This legal safety net is crucial for competi-tive Similarly, Google began as a search engine and Internet advertising firm, but has branched into an array of roles including mobile communications device manufacturer, applications provider, an energy company and poten-tially forces to take root, but implementing ex post regu-lation may represent a major challenge, particularly for developing countries that lack competition laws and regulations or are affected by weak institutional struc-tures. a TV white spaces database administrator (see This challenge may be compounded where eco-nomic systems have traditionally relied on strong state Box 3.4). intervention, resulting in entire sectors and most domi-nant Although regulatory authorities have more typically firms being state owned, controlled by the gov-ernment focused on the potential anticompetitive effects of ho-rizontal or afforded special protection by government policies.39 integration, vertical integration issues may be-come more prominent as technology convergence blurs the lines between markets. In reviewing both vertical and horizontal integration issues in today’s converged and liberalized ICT environment, regulators will have to assess potential mergers on a case-by-case basis and analyze the merger’s likely effects on the relevant mar-kets. For over a decade, a series of initiatives have been implemented to create competition law frameworks in various countries around the world. Approximately 100 countries have adopted competition laws, with a quarter of those being developing countries.40 Similarly, a series of regional initiatives have been adopted to es-tablish Necessary scrutiny should be given to integration while at the same time taking into account the highly competitive and fast-paced environment enabled by ICTs in order to avoid decisions that may stifle competi-tion competition law rules and principles, including in the Association of Southeast Asian Nations (ASEAN), in the Common Market for Eastern and Southern Africa (COMESA),41 in the Economic and Monetary Union of West Africa (UEMOA),42 in the Economic and Monetary Community of Central Africa (CEMAC), in the Caribbean Community and Common Market (CARICOM),43 in the Andean Community (CAN),44 and in the Common Mar-ket and innovation.47 3.4 Implementation of Cross- Sector Activities of the Southern Cone (Mercosur).45 Since ICTs interact and intersect with every other major social issue and sector of the economy, including the environment, cybercrime and security, education, health and banking, governments must coordinate var-ious Countries without general competition laws, such as the United Arab Emirates and the Kingdom of Ba-hrain, are beginning to develop ICT-specific ex post interests in order to achieve large-scale objectives. rules. In Bahrain, for example, the Telecommunications Regulatory Authority (TRA) plays the dual role of both regulator and competition authority for the ICT sector; the TRA introduced an ICT competition framework in February 2010.46 Section 3.5 further discusses the role of and interactions between authorities responsible for enforcing ex ante and ex post regulation in the ICT sector. Tackling ambitious cross-sector goals requires the coor-dination of the government authorities responsible for these sectors. It also requires regulatory frameworks broad enough to allow the ICT regulator to consider the relevant interrelated issues while remaining focused on promoting innovation and development in the ICT sector. Chapter 3 95