Functional Separation: Next Step of Improving Broadband Competition?

Paper in proceeding, 2009

The issue of functional separation is being debated as a new proposal for telecommunications regulatory framework in the EU. Although this issue has been discussed and implemented in many countries, each country may not have the same procedure and outcome. This paper will therefore provide theoretical considerations of functional separation by starting from the idea of vertical integration. Pros and cons of implementing functional separation will also be provided. The paper will present the evolution and development in the Swedish market, in particular discussion during the legislative process of proposing mandatory functional separation as one of the powers of the Swedish telecommunications regulator. The paper concludes with a discussion of the implementation of functional separation in general and in the Swedish broadband market, with implications for other countries.