Essential facilities and Trinko: should antitrust and regulation be combined? (The Enduring Lessons of the Breakup of AT&T: A Tw

(29.) Roger Noll suggested this in commenting on a pre-publication presentation in Boston at the American Economics Association Meetings in January, 2006 of Brennan's Article, Demise, supra note 18.

(30.) Credit Suisse See. LLC v. Billing, 127 S. Ct. 2383, 2389 & 2394 (2007).

(31.) If a monopoly is already present, the effect of such conduct is less harmful and may be beneficial, as the "Chicago School" argument posits. That perspective does not apply if the conduct creates a monopoly in a setting where there would otherwise be none, for example, by using exclusive dealing contracts over distributors to eliminate competition in distribution, and thus create a new monopoly or perpetuate a monopoly that would otherwise have fallen apart. See Timothy J. Brennan, Bundled Rebates as Exclusion Rather Than Predation," 4 J. COMPETITION L. AND ECON. 335, 367-38 (2008).

(32.) See Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities, FERC Order No. 888 (codified at 18 C.F.R. pts. 35, 385 (2008)); see also Regional Transmission Organizations, FERC Order No. 2000 (codified at 18 C.F.R. pt. 35 (2008)); see also TIMOTHY BRENNAN, KAREN PALMER & SALVADOR MARTINEZ, ALTERNATING CURRENTS: ENERGY MARKETS AND PUBLIC POLICY 71-80 (2002).

(33.) Christopher Byron, Windup for Two Supersuits, TIME, Jan. 18, 1982, at 38.

(34.) NewsHour: Newsmaker with Joel Klein (PBS television broadcast June 8, 2000), available at http://www.pbs.org/newshour/bb/cyberspace/jan-june00/ldein_6-8.html.

(35.) See generally Timothy J. Brennan, Do Easy Cases Make Bad Law? Antitrust Innovation or Missed Opportunities in U.S. v. Microsoft, 69 GEO. WASH. L. REV. 1042 (2001) (assessing the economics of the Microsoft case, including a critique---on multiple grounds-of the remedy in light of not only this problem, but also a general disconnection between the intended theory of the case and the actual facts presented).

(36.) Verizon Comm. Inc. v. Trinko, 540 U.S. 398, 410-11 (2004) (quoting PHILLIP E. AREEDA & HERBERT HOVENKAMP, FUNDAMENTALS OF ANTITRUST LAW 150 (3d ed. 2003)).

(37.) See T. Randolph Beard, George Ford & Lawrence Spiwak, Why ADCo? Why Now? An Economic Exploration into the Future Industry Structure for the "Last Mile" in Local Telecommunications Markets, 54 FED. COM. L. J. 421 (2002) (suggesting a proposal along these lines that would apply to incumbent telephone companies after the Telecommunications Act).

(38.) See Philip Nelson & Lawrence White, Market Definition and the Identification of Market Power in Monopolization Cases: A Critique and a Proposal (Stem Sch. of Bus., New York University Working Paper 03-26, 2003), available at http://www.stem.nyu.edu/eco/wkpapers/workingpapers03/03-26White.pdf.

(39.) The erroneous inference of competition from the presence of substitutes is known as the "Cellophane fallacy," after the Supreme Court made this mistake in its decision in United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 394 (1956).

(40.) See Franklin Fisher & John McGowan, On the Misuse of Accounting Rates of Return to Infer Monopoly Profits, 73 AMER. ECON. REV. 82 (1983); see also Timothy Brennan, Preventing Monopoly or Discouraging Competition? The Perils of Price-Cost Tests for Market Power in Electricity, in ELECTRIC CHOICES: DEREGULATION AND THE FUTURE OF ELECTRIC POWER 163 (Andrew N. Kleit ed., 2006).

(41.) See U.S. DEP'T OF JUSTICE & FTC, HORIZONTAL MERGER GUIDELINES (revised Apr. 8, 1997), available at http://www.usdoj.gov/atr/public/guidelines/hmg.pdf; see also Lawrence White, Market Definition in Monopolization Cases: A Paradigm is Missing, in ISSUES IN COMPETITION LAW & POLICY (Wayne D. Collins ed., 2007), available at http://ssrn.com/abstract=-852844.

(42.) See Brennan, Skating Toward Deregulation, supra note 3, at 352-53; see also Timothy Brennan & Alan Gunderson, 2006 in Competition Policy and Enforcement: An Economic Perspective, 22 CANADIAN COMPETITION RECORD 67, 81-83 (Summer 2007).

(43.) See U.S. DEP'T OF JUSTICE & FTC, supra note 41, [section] 1.11.

(44.) C.f. Canadian Competition Bureau, Technical Bulletin on 'Regulated' Conduct, pt. III (June 2006), available at http://www.competitionbureau.gc.ca/epic/site/cb-bc.nsf/en/02141e.html (detailing a similar policy adopted by Canada, in which competition enforcement defers to a parliamentary grant of authority to a sector-specific regulator).

(45.) Dennis Carlton & Randal Picker, Antitrust and Regulation, 30 (Univ. of Chicago Law & Econ., Olin Working Paper No. 312, Oct. 2006), available at http://ssrn.com/abstract=937020.

(46.) See text accompanying notes 29-30 supra.

(47.) See text accompanying notes 33-34 supra (disagreeing with my more pessimistic reading of the Trinko case, in discussing this paper at the International Industrial Organization Society meetings in 2006).

(48.) C.f. SWEDISH COMPETITION AUTHORITY, THE PROS AND CONS OF HIGH PRICES (Arvid Fredenberg, ed. 2007) (recently assessing proposals to grant competition authorities direct control over prices).

Timothy J. Brennan, Professor, Public Policy and Economics, University of Maryland, Baltimore County, Catonsville, MD, and Senior Fellow, Resources for the Future, Washington, DC.

The author thanks Christopher Yoo for including him in this Symposium.

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