Study On Effective Competition Relationship In The Upper And Lower Stream Industry Of The Convergence Of Three Networks In China

The Marxism stated that the revolution of science improved understandings of the nature of humanbeing, which formed the foundation of the revolution of technology; the revolution of technology changed the tools and process of mankind in a great extent. The industry convergence has been caused by the technology revolution, and it has been the turning point of entire human society. The industrial convergence has not only the characteristics and content of technology, but also has the characteristics and content of economy. However, not any progression in science and technology will bring the industrial convergence. Science and technology expedite the industrial convergence only when it achieved some conditions. Thus the relationship between the progression of technology and industrial convergence could be concluded to the relationship between productivity and relation of production. The aim of studying the relationship of production that became the key factor of human history.In China, the convergence of three networks is also based on the progression of technology. The fact is that it is the format of the global industrial convergence. Studying on the relationship of cooperation and competition in the upper and lower stream industry of the convergence of three networks is to seek a new structure which perfectly suits our information industry.This paper, from the aspect of the industrial convergence, analysed the three kinds of relationships in the upper and lower stream industry, including vertical relationships, cooperative relationships, and competitive relationships in the upper and lower stream industry of convergence of three networks as the followings:1. This paper reviewed the development of convergence of three networks in many other countries. From the practices in foreign countries, we learn that there isn't a single pattern of three networks convergence to fit in all. The one which suits the nation would be the best solution. Therefore, we also need a mechanism of, the convergence developed by ourselves to fit in the telecommunication,radio and TV industries in China.2. This paper concluded outstanding theories of the industrial convergence and convergence of three networks from many foreign and domestic studies. The theory of industrial convergence provided therical foundation for researching the motivation, nature and the relation of competition in the convergence in China. Studies from domestic researchers also offerd this paper good reference for the further analysis. The theories of effective competition, game theory and welfare economic provide the direction and tools for this study.3. This paper anlaysed the motivations and limitations of the convergence of three networks in China, and created a relationship model for it. This paper pointed out that in order to form our convergence, we have to break the boundry between telecommunication, radio and TV industries, and form a newly structured industrial mechanism. It came to the conlusion that the cooperation between upstream and downstream companies would be the main successful factor for making the convergence happened.4. This paper studied the relationship of vertical trade between the upper and lower stream companies in the convergence of three networks. The paper created a theory based on the gap of the price theory. It built a model using the cost-analysis and profit maximization theories. This paper pointed out that the upper stream monopoly and the competition of lower stream companies would make the gap of the price larger. However, the lower stream monopoly and the competition of upper stream companies would keep the gap of the price stable.5. This paper used the game theory to anlayse the impacts of bring competition into upper and lower stream cooperation in the convergence of three networks in China. This paper built three different models, including all vertical integration, non vertical integration, and single vertical integration. Comparing the social welfare, it came to the conclusion:the department of government supervision should lower the entry bar of corperations, and should encourage more competitions within corperations. Due to the fact that the number of down stream corperations was fixed, this paper suggested more competitions should be encouraged in the upstream corperations. The corperations with vertical convergence normally have higher benefits than others that will cause the lack of motivation in other corperations. Under the condition of same social welfare, there are more up stream corperations when there is no vertical convergence company. When there are enough up stream corperations, increasing the number of down stream corperations will increase the extent of social welfare. Although reforming the radio and TV industries will reduce the extent of social welfare, more farely competitions have been encouraged at the up stream convergence. The standard of effective competition on convergence of three networks should be evaluated by the number of competitions it brought in.6. This paper has also studied the practice of the convergence supervision in foreign countries and also in China. The conclusion has been drawn that the convergence supervison is the best way to break the boundy and improve the management effeciancy. This would be the foundation of the convergence and this articale designed the functions of the new convergence supervison mechanism for China.