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A General Framework for Regulation and Liberalization in Network Industries

  • Christian Jaag

    ()

  • Urs Trinkner

    ()

In parallel with liberalization, sector-specific regulation in network industries has become a widely discussed topic among academics, policy makers, industry economists and regulators themselves. The issue of these debates has usually been on whether such regulation is necessary and if so what its optimal design should be. Some argue for complete deregulation (i.e., the complete abolishment of sector-specific regulations), whereas others propose reregulations, that is the replacement of pre-existing (monopoly) regulations by new regulations aiming at safeguarding service levels and competition. The resulting compromise is often somewhere in between; the liberalization process usually entails the partial replacement and realignment of sector-specific regulatory intervention by the disciplining forces of competition protected by competition law. Consequently, competition law and sector-specific regulation play complementary roles. In this paper, we present a general economic framework to assess regulatory remedies in network industries. Therein, liberalization, or more generally market access regulation, can be assessed as well. It provides a foundation and explanation of current sector-specific regulations in place.

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File URL: http://www.swiss-economics.ch/RePEc/files/0016JaagTrinkner.pdf
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Paper provided by Swiss Economics in its series Working Papers with number 0016.

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Date of creation: Dec 2009
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Publication status: Published in International Handbook Of Network Industries - The Liberalization of Infrastructure, edited by Matthias Finger and Rolf K√ľnneke. Cheltenham, UK, Edward Elgar, pp 26-53.
Handle: RePEc:chc:wpaper:0016
Contact details of provider: Web page: http://www.swiss-economics.ch
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  1. Matthias Finger & Christian Jaag & Markus Lang & Martin Lutzenberger & Urs Trinkner, 2009. "Bestimmung des Regulierungsbedarfs aus ökonomischer Sicht: Angemessenheit und Folgen einer funktionalen oder strukturellen Trennung von Swisscom," Studies and Reports, Swiss Economics, pages 1-92, February.
  2. Mark Armstrong & David Sappington, 2005. "Regulation, Competition and Liberalization," Industrial Organization 0505011, EconWPA, revised 07 Oct 2005.
  3. Dennis W. Carlton & Randal C. Picker, 2007. "Antitrust and Regulation," NBER Working Papers 12902, National Bureau of Economic Research, Inc.
    • Dennis W. Carlton & Randal C. Picker, 2013. "Antitrust and Regulation," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 25-61 National Bureau of Economic Research, Inc.
  4. Bourreau, Marc & Dogan, Pinar, 2001. "Regulation and innovation in the telecommunications industry," Telecommunications Policy, Elsevier, vol. 25(3), pages 167-184, April.
  5. Pablo T. Spiller, 2009. "An Institutional Theory of Public Contracts: Regulatory Implications," Chapters, in: Regulation, Deregulation, Reregulation, chapter 3 Edward Elgar.
  6. Glazer, Amihai & McMillan, Henry, 1992. "Pricing by the Firm under Regulatory Threat," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 1089-99, August.
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