Competition and Regulation in Network Industries

I present a graphical framework based on Subrahmanyam and Thomadakis (1980) that allows to study the impact from firm and market characteristics on systematic risk associated with the return on capital, i.e. Beta risk, for utilities under price control. Within this framework, Beta risk is driven by the magnitude of profit fluctuations following demand shocks. The framework is then applied to airport firm characteristics and airport market environment features. I find that the frequency of price control resets, the level of operating leverage, the extent of capacity constraints, and the degree of market power all have an unambiguous effect on the level of Beta risk. The scope of the regulatory perimeter and the type of traffic mix may also affect Beta risk; however, the magnitude and direction of their impact rely on the specifics of the case. The article may assist policy makers to formulate economically sound recommendations on how the regulatory rate of return for airport operators should be determined. Specifically, my findings suggest criteria that can be used to choose adequate peer companies of comparable systematic risk.

Tobias Binz

How do firm and market characteristics affect airports’ Beta risk?

企业与市场特征如何影响机场的贝塔风险？

The modern economy is flooded with products that have no monetary price. However, it is becoming something of an established fact that many zero-price products are not ‘free’ but rather incur costs for consumers in other ways. Many governments intervene in markets when consumers are not being given a fair price for their products. If the costs to consumers for some products are not monetary however, how can governments evaluate whether the costs that consumers are incurring are too high? We seek to answer this question by assessing the approaches of the US and the EU to zero-price markets as informed by their legal and ideological traditions. We offer potential policy solutions while outlining the difficulties that accompany government intervention in zero-price markets and the obstacles when it comes to measuring non-monetary forms of consumer cost.

Stephen Jarman

Deniz D. Karaman Örsal

The regulation of zero-price markets by the competition authorities in the USA and the EU

美国和欧盟竞争机构对零价格市场的监管

Matthias Finger

Introduction: Regulation of airports

引言：机场的监管

We employ a Cournot model with interdependent demands to explore the interaction between demand and cost complementarities in mitigating upward pricing pressure, post-merger. The analysis reveals that even substantial increases in the HHI post-merger need not raise competitive concerns when output is redistributed from single-market to multi-market providers. Furthermore, the numerical simulations indicate that there is a wide range of demand and cost complementarity parameters over which even monopolization of the market would not be expected to result in higher prices. These findings may constructively inform merger policy and provide useful context for application of the DOJ/FTC horizontal merger guidelines in an increasingly digitized (network) economy.

Dennis L. Weisman

Complementarities as an antitrust defense

互补性作为反垄断辩护

A convergence of the electricity and the transportation sectors can be observed, with private and public transport being increasingly electrified and with aggregated electricity demand and storage being increasingly operated as flexible assets. At the same time, sustainability concerns are driving systemic changes in both systems. This article introduces the concept of the energy-mobility system, which is a result of this convergence, and proposes an integrated framework for policy and governance of the energy-mobility system. The framework focuses on cross-sectoral policy ambitions related to climate change mitigation, namely reducing energy consumption, electrifying fossil fueled transport, decarbonizing electricity generation, promoting resilience, and integrating green infrastructure management. Public policy and the corresponding regulation are no longer conceptualized and executed in each sector separately. An integrated policy framework is indeed needed for the energy-mobility system, so that the institutions remain relatively aligned with the technological developments. The requirements for effective governance of the energy-mobility system are then discussed, which include an energy-mobility system operator. The potential for the policy and governance framework is addressed through a case study of the Swiss Federal Railways, which as the owner and operator of a fully electrified rail network and associated electricity infrastructure is already close to taking up such a role. While the Swiss case is unique, it can offer insight for other countries developing their regulatory approach to the convergence of the energy and mobility systems.

Paul Adrianus van Baal

The energy-mobility system in transition: The case of the Swiss Federal Railways

能源-交通系统转型：以瑞士联邦铁路为例

This research studies the disassociation phenomenon between network and data services that has disrupted the telecom sector in India. We employed grounded theory approach to explore this phenomenon and its impact on the Telecommunication Service Providers (TSPs). We have derived the insights and developed a coding paradigm via a judgmental sample of 19 senior experts at decision-making positions in the Indian telecom sector. Through literature review, we identified the fundamental changes in the Indian telecom sector from 2013 to 2019, when this phenomenon was widely observed. The findings indicate the technology evolution’s role in driving the data-network disassociation in the presence of regulatory forbearance, 4G spectrum availability, hyper-competition, and evolving device ecosystem. These conditions have proved advantageous to Over-The-Top (OTT) players, caused financial stress to the TSPs, and forced them to resort to consolidation measures and shift from voice-based to data-based business models. The study’s insights will help the Industry understand the phenomena, regulatory issues in technology adoption, survival challenges, and decision-making strategies for pre-empting technical disruptions. It also emphasizes being watchful of the competing non-conventional industries from a regulatory perspective.

Ravi Gandhi

Charru Hasti

Mahim Sagar

A grounded exploration of regulatory dynamics and competitive forces in the Indian telecom network industry

印度电信网络行业监管动态与竞争力的实证探索

5G technologies are introducing new capabilities and services in the telecommunications (telecom)industry, changing business models and market structures, and compelling alterations in regulatory frameworks. Telecom administrations across the world are making choices for regulation of key resources such as spectrum to meet 5G requirements. 5G is taking root in the Indian telecom market. This paper analyses expert stakeholder and practitioner opinion through a policy Delphi to examine what kind of regulatory and policy changes need to be made in India’s spectrum management policies in a 5G market and how these could be best adapted to the unique public policy and political economy environment of this country. It arrives at practical recommendations for planning, assigning, and pricing spectrum which could be of value to policy makers and regulators.

Anuradha Mitra

Varadarajan Sridhar

Gopal K. Sarangi

Analysing spectrum administration for 5G in India using a policy Delphi

使用政策德尔菲法分析印度5G频谱管理

Our main contribution is to identify the risks implied by the existence of prolonged regulatory lags. We hypothesize that a likely first response is to reduce OPEX, increasing efficiency. If the lag persists for enough time, a vicious circle of inefficiency, disinvestment, and reduced performance can follow. We use a regulatory episode affecting natural gas distributors in Argentina as a natural experiment, controlling with other Latin American countries’ utilities not exposed to the same regulatory stimuli. We evaluate the relative efficiency of fourteen firms for five countries, in seven years, using Stochastic Frontiers Analysis (SFA). Thus, we perform a regulatory impact analysis (RIA) to assess the consequences on the performance of two idiosyncratic regulatory policy instruments applied in the distribution gas industry in Argentina in the 1998–2021 period (the 2002 Public Emergency Law and the 2016 Integral Tariff Review).

Carlos F. Ceballos Ferroglio

Gustavo Ferro

Ángel Enrique Neder

Regulatory lag, efficiency, and performance. Lessons from a case study

监管滞后、效率与绩效：案例研究的经验教训

This study introduces a theoretical framework for the Turkish natural gas market based on the principles of game theory and industrial organization. It investigates the effects of the legal and ownership unbundling on consumer surplus, social welfare, and competition. The model considers a mixed oligopoly with a transmission system operator (TSO), a state-owned incumbent, and a private firm. The state-owned incumbent is assumed to maximize consumer surplus and its own profit, while the private firm is assumed to be profit-maximizing. Additionally, the state-owned incumbent is assumed to be less efficient than the private firm. The game consists of three stages. In the first two stages, the state-owned incumbent and the private firm sequentially choose contract sizes in the upstream market. In the last stage, a contract size-restricted Cournot game is played. The findings of the study suggest that legal unbundling appears to offer greater advantages for consumer surplus and social welfare compared to ownership unbundling, particularly when considering key factors such as third-party access, non-tariff discrimination, and import liberalization. The results indicate that adopting the role of a Stackelberg follower by the state-owned incumbent in the upstream market is advantageous in terms of consumer surplus, social welfare, and competition under both unbundling approaches.

Yunus Emre Gürler

Sinan Ertemel

Muzaffer Eroğlu

Legal and ownership unbundling in the Turkish natural gas market: A comparative analysis

土耳其天然气市场中的法律与所有权解绑：一项比较分析

Australia has a long history of privately owned utility price regulation, one that is little known. This price control was designed to restrain the market power of several utilities (gas, rail, tramways, electricity, and water). The purpose of this paper, therefore, is to establish what types of price control that were used in Australia in the utilities sector before the First World War and to determine the degree to which this price control influenced efficiency. As price levels in this era were set in legislation, the lack of flexibility led to less-than-optimal outcomes, and eventually and led to new approaches were developed after 1912 to the utilities that remained in private ownership, and in some cases influenced the movement in Australia towards government control.

Malcolm Abbott

Network utility price regulation in Australia in the pre-first world war years

澳大利亚战前网络效用价格管制

ISSN	1783-5917, 2399-2956
h-index	13

Publication Information	Publisher: SAGE Publications Inc.，Publishing cycle: ，Journal Type: journal，Open Access Journals: No
Basic data	Year of publication: 2013，Proportion of original research papers: 0.00%，Self Citation Rate:N.A.， Gold OA Rate: 0.00%

Competition and Regulation in Network Industries

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