This thesis seeks to contribute to solving the debate about the framework of rules and institutions applicable to public utility sectors, by adopting both economic theories, such as natural monopoly, network effects, and public goods, and practical analysis of the telecommunications sectors for both Australia and the United States. Governments must reevaluate the framework regulating public utility sectors whenever rapid technological advancements occur. This thesis argues that the antitrust authority better enforces competition rules, and that the sector-specific authority better enforces technical and universal service rules. The justification of the special competition rule concerning bottleneck facilities access should be limited. As for the universal service scheme, the enforcer should ensure competitive neutrality and adopt pro-competitive instruments. This framework would allow for a more market-oriented and economy-wide regulatory administration, as well as enforcement of the universal service scheme based on a more accurate reflection of the fundamental values of citizens.

The US airline industry is going through a period of consolidation through mergers between leading airlines. A number of recent mergers have been approved by the Antitrust Division of the Department of Justice (DOJ) based on the presence of Southwest Airlines in merger-affected markets. In doing so, the DOJ makes a key assumption that Southwest is unresponsive to the reduced competition when its competitors merge. We find that Southwest raised fares more in markets where Delta/Northwest and US/America-West used to operate jointly between 2005-2010. However, Southwest's fares either decreased or rose by less if facing direct or adjacent competition from a low-cost carrier (LCC). Furthermore, Southwest is now merging with AirTran Airways, its biggest LCC competitor. This implies that the DOJ should not rely on Southwest Airlines as a post-merger deterrent to fare increases. / Graduation date: 2012