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The relationship between regulation and competition policy for network utilities


  • Newbery, D.


Should regulation of potentially competitive elements of network utilities be left with sector regulators or solely subject to normal competition laws? Britain evolved licenses for network activities overseen by regulators while the EU places more emphasis on making sector regulation consistent with competition law. The paper discusses the appropriateness of the competition law approach for telecoms and electricity. Post-modern utilities like telecoms, in which facilities-based competition is possible, lend themselves to the approach laid out in the Communications Directives, and its application to mobile call termination is discussed. Electricity, where collective dominance is more likely, does not fit comfortably into this approach. Instead, licence conditions retain advantages where it may be necessary to modify market rules in a timely and well-informed manner, as exemplified by the English Electricity Pool.

Suggested Citation

  • Newbery, D., 2006. "The relationship between regulation and competition policy for network utilities," Cambridge Working Papers in Economics 0631, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0631
    Note: IO

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    References listed on IDEAS

    1. Bogorad, Cynthia S. & Penn, David W., 2001. "Cost-of-Service Rates to Market-Based Rates to Price Caps to ?!#?#!?," The Electricity Journal, Elsevier, vol. 14(4), pages 61-72, May.
    2. Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
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    Cited by:

    1. SMEERS, Yves, 2005. "How well can one measure market power in restructured electricity systems ?," CORE Discussion Papers 2005050, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Martin Hellwig, 2008. "Competition Policy and Sector-Specific Regulation for Network Industries," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2008_29, Max Planck Institute for Research on Collective Goods.

    More about this item


    Regulation; competition policy; telecommunications; electricity; market power;

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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