Network neutrality: transatlantic policy learning can be mutual!

Being fascinated by the maturity of American antitrust policy and feeling embarrassed and apologetic for the weaknesses of its European counterpart is a common attitude among the comparativists of European antitrust scholarship. In a recent TILEC discussion paper, TILEC member Jasper Sluijs challenges this conventional opinion and argues that Europeans also have reasons to be proud. The paper conducts a comparative analysis between different approaches to telecoms regulation on both sides of the Atlantic with a specific focus on the issue of network neutrality. The paper places the question of network neutrality in the greater debate of incentivising investment to the next generation broadband infrastructure, under the grave uncertainties regarding the future of the broadband market. The concepts of false negatives and positives, which the paper successfully borrows from statistics, constitute the main analytical foundation for the comparison between the European and American regulatory approaches. Overall, the paper finds the European approach more flexible and responsive, as the existence of both consistent sector specific regulation and a strong antitrust policy makes it possible to address any false negatives and positives swiftly. The paper is to appear in the Federal Communications Law Journal.

New administrative structure, new faces

On August 17, 2009 Nicola Heeren joined TILEC as the new TILEC Office Manager. Nicola has recently moved to the Netherlands after working as a project manager in London. Nicola, who has become part of the TILEC management team, will liaise between the academic and the administrative staff. She will be responsible for supervising all the administrative processes which support TILEC's activities. After a difficult period of shortage, the TILEC Secretariat is now fully staffed and consists of Marlous Winters, Rochelle van Rooij and Katja Zondervan. In addition, Quinten Blok is currently working as a student assistant and provides support to the team. As all members of the team work part-time, members and interested parties are kindly requested to send their enquiries to TILEC@uvt.nl to ensure that they can be dealt with in a timely and appropriate manner, unless otherwise stated. Project leaders who need assistance for projects or events are also asked to involve Nicola at an early stage so that the workload of the secretariat could be planned and support timely provided.

Do taxes affect entry?

In the past decade, evidence accumulated that most of productivity gains in the economy are actually realized by entrants. Competition policy often aims at making room for them by preventing incumbents from unduly deterring them but are we sure that some other determinants are not as important? In a recent TILEC discussion paper, TILEC member Marco Da Rin (and co-authors Marina Di Giacomo and Alessandro Sembenelli) study the effect of corporate income taxation on entry patterns. The authors use a novel country-industry panel database with information on newly incorporated firms in 17 European countries between 1997 and 2004. After accounting for the fact that tax rates and tax rules could actually be determined by public authorities in reaction to the observed entry pattern, they find that a reduction in the effective corporate income tax rate leads to a significant increase in entry rates and to a
reduction of the scale of entrants, two possible measures of the ease of entry. Interestingly, these effects are non-linear, suggesting that corporate income tax reductions can facilitate entry only below a certain threshold level.

Insider trading in the Netherlands

On 23 September 2009, TILEC organized a workshop on insider trading at the premises of the Dutch financial markets authority (AFM) in Amsterdam. This activity was part of the on-going cooperation between TILEC and the AFM, which aims at delivering a better understanding of the functioning and regulation of financial markets. TILEC member Peter de Goeij presented a paper (joint with Peter Cziraki and Luc Renneboog) investigating whether there are patterns of abnormal stock performance around insider trades and option exercises on the Dutch market. The authors find that insider share purchases, sales and option exercises are both better-timed and followed by a stronger market response at firms where shareholder rights are not restricted. They argue that this pattern reflects the high value of private benefits of control enjoyed by insiders at firms which effectively curtail shareholder rights. Former TILEC member Jérémie Lefebvre (Louvain-la-Neuve) presented a paper (joint with Hans Degryse and Frank de Jong) analyzing the bid-ask spread and other liquidity measures on the Dutch stock market on dates of legal insider trading. Measures of asymmetric information increase when insiders trade but there is little evidence of changes in quoted spread, although those can help in predicting abnormal returns.

TILEC has a new research coordinator on the law side

Firat Cengiz joined TILEC as a post-doctoral researcher in July 2009 from the European University Institute in Florence, where she was a Max Weber Fellow. Firat received her Ph.D. degree from the ESRC Centre for Competition Policy of the University of East Anglia, UK, with a thesis titled "Antitrust Federalism in Comparison: Multi-level Enforcement of Competition Policy in the US and the EC". Institutional aspects of competition policy constitute Firat's primary research interest and for the rest of this academic year she will principally be working on a book project based on her doctoral research. Firat was engaged in university administration both at the University of East Anglia and the European University Institute. Therefore, she enthusiastically agreed to take on her shoulders the task of research coordination of TILEC on the law side. Firat has a firm belief in transparency and a bottom-up approach to administration at all levels. Therefore, she will be more than happy to discuss any questions or suggestions about TILEC activities or research in general. She can be found in room M513 and reached by phone at +31 13 4663648 or by e-mail at f.cengiz@uvt.nl.