DOI: 10.5176/2251-3809_LRPP17.12

Authors: Jing Wang

Abstract:

In 2013 the central government of China decided to further open up the fixed broadband market for private funds, in order to boost market competition. However, to date, with regard to protecting the interests of state-owned enterprises (SOEs), the administrative intervention concerning network interoperability has fostered private funds from the outside, whereas it has discouraged them from the inside. This trend puzzles existing or prospective privately-owned fixed broadband operators, and creates a brick wall for them. Moreover, because of the lack of network interoperability, many lines are constructed in China, yet these are high-priced but low-speed fixed broadband services and so, consequently, consumer welfare cannot be advanced. In theory, the Anti-Monopoly Law of China 2007 should prohibit these anti-competitive practices; however, in reality, the 2007 Act has lost its function of achieving effective competition in the fixed broadband market, as well as that of protecting the interests of privately-owned fixed broadband operators and consumer welfare. Because both effective competition and consumer welfare are unachievable in the fixed broadband sector, the ultimate objective of the Anti-Monopoly Law of China 2007, namely the public interest, which means reconciliation between the state’s interest, interests of different types of enterprises and consumer welfare is sidelined. Therefore, this paper examines the survival conditions of privately-owned fixed broadband operators in China caused by administrative directives, as well as the lack of network interoperability; it analyses the antimonopoly probe into two Chinese telecommunications SOEs (2011); and it evaluates genuine functions of the 2010s telecommunications intervention policies for private funds from the Anti-Monopoly Law perspective.

Keywords: the Anti-Monopoly Law of China 2007; industrial policy; state-owned enterprises (SOEs); privately-owned fixed broadband operators; network interoperability

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