| Summary: | 碩士 === 國立臺北大學 === 經濟學系 === 105 === First, we discuss that we have implemented telecommunication liberalization in Taiwan for many years. Many items of telecommunication service have already been
opened to let other private industries participate in the competition. However, the part of local telephone in the fixed communication service, incumbent still own more than ninety percent market share.
In order to process the problem of utility industry, OECD (2001) summarized five regulations from foreign governments. In this regard, we discuss that whether Taiwan’s government can use through the different market’s structural to solve problems. In addition, the new EU telecoms rules which is amended in 2011 stipulate that regulators should only consider functional separation as a last resort when it can be established that other measures have failed.
Therefore, the propose of the thesis is studied that whether our government can effectively solve the problem which incumbent monopolize the local loop currently by taking the functional separation. More importantly, let the incumbent have the motivation to accept the regulations.
Through the model analysis and comparison, we can find:
1. Regardless of the firm profits, consumer surplus and social welfare, choosing the strategy of the vertical integration are better than choosing the strategy of the monopoly.
2. In the consumer surplus, the strategy of the vertical integration must be better than the strategy of the functional separation. However, when the firm in the downstream produce inefficiently, in the profits, the strategy of the vertical regulation is lower than the strategy of the functional separation. So in the social welfare, the strategy of the functional separation is higher than the strategy of the vertical regulation.
Finally, there are two advantages to introduce the strategy of functional separation:
1. Other telecommunication enterprisers can rent the local loop with the reasonable price. Let the market achieve fair competition and solve the problem of incumbent monopoly.
2. It is possible to improve the incumbent’s profits and social welfare. Overall, can make whole reach Pareto improvement.
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