Mechanisms of funding for Universal Service Obligations: the electricity case
The transition towards a more competitive regime in network industries (and specially in electricity sector) raises the relevant question of funding for the Universal Service Obligations (USOs). Our paper focuses on two ways of funding for universal service and equal treatment obligations (Ubiquity and Non Discrimination constraints): the funding through access charge (CS regime) or taxation (T regime). Using a network model including competition between an historical monopoly (in charge for the USOs) and an entrant, we obtain some results concerning gains and losses of social welfare due to those mechanisms. We show that most of the time it is socially better to let the historical monopoly be active whatever the type of funding for USOs applying, and whatever profitability of the firms is. However, when the entrant is active, we can highlight that the introduction of the T regime (compared to the CS one) implies either welfare deterioration or an entry prevention strategy by the historical Þrm. Therefore, the T regime could not be an argument for the regulator to promote vertical separation of the historical firm (according to the European community line).
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mark Armstrong, 2001. "Access Pricing, Bypass, and Universal Service," American Economic Review, American Economic Association, vol. 91(2), pages 297-301, May.
- Anton, James J & Vander Weide, James H & Vettas, Nikolaos, 1998.
"Strategic Pricing and Entry under Universal Service and Cross-Market Price Constraints,"
CEPR Discussion Papers
1922, C.E.P.R. Discussion Papers.
- Anton, James J. & Vander Weide, James H. & Vettas, Nikolaos, 1999. "Strategic Pricing and Entry under Universal Service and Cross-Market Price Constraints," Working Papers 99-04, Duke University, Department of Economics.
- David, L. & Mirabel, F., 2000. "Structure du marche gazier americain, reglementation et tarification de l'acces des tiers au reseau," Cahiers du CREDEN (CREDEN Working Papers) 00.06.17, CREDEN (Centre de Recherche en Economie et Droit de l'Energie), Faculty of Economics, University of Montpellier 1.
- Philippe Chone & Laurent Flochel & Anne Perrot, 2000.
"Allocating and Funding Universal Service Obligations in a Competitive Network Market,"
Econometric Society World Congress 2000 Contributed Papers
0213, Econometric Society.
- Philippe Choné & Laurent Flochel & Anne Perrot, 1999. "Allocating and Funding Universal Service Obligations in a Competitive Network Market," Working Papers 99-55, Centre de Recherche en Economie et Statistique.
- Armstrong, Mark & Doyle, Chris & Vickers, John, 1996.
"The Access Pricing Problem: A Synthesis,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 44(2), pages 131-50, June.
- Armstrong, M. & Doyle, C. & Vickers, J., 1995. "The access pricing problem: a synthesis," Discussion Paper Series In Economics And Econometrics 9532, Economics Division, School of Social Sciences, University of Southampton.
- Chone, Philippe & Flochel, Laurent & Perrot, Anne, 2002. "Allocating and funding universal service obligations in a competitive market," International Journal of Industrial Organization, Elsevier, vol. 20(9), pages 1247-1276, November.
- Chone, Philippe & Flochel, Laurent & Perrot, Anne, 2000. "Universal service obligations and competition," Information Economics and Policy, Elsevier, vol. 12(3), pages 249-259, September.
- Madet, C. & Mirabel, F. & Poudou, J.-C. & Roland, M., 2004. "Funding Universal Service Obligations with an Essential Facility: Charges vs. Taxes and Subsidies," Cahiers du CREDEN (CREDEN Working Papers) 04.07.47, CREDEN (Centre de Recherche en Economie et Droit de l'Energie), Faculty of Economics, University of Montpellier 1.
- repec:fth:inseep:9955 is not listed on IDEAS
- H. Cremer & F. Gasmi & A. Grimaud & J. J. Laffont, 2001. "Universal Service: An economic perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 72(1), pages 5-43, 03.
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:26:y:2004:i:5:p:801-823. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.