Abstract

http://ssrn.com/abstract=289849
 
 

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Deregulation and Managed Competition in Network Industries


Gregory Sidak


Tilburg Law & Economics Center (TILEC), Tilburg University; Criterion Economics, L.L.C.

Daniel F. Spulber


Northwestern University - Kellogg School of Management


Yale Journal on Regulation, Vol. 15, No. 1, pp. 117-147, Winter 1998

Abstract:     
The competitive transformation of telecommunications and other network industries in the United States has caused governmental policy makers to be increasingly concerned with the fairness of the deregulatory process. This Essay offers a set of concrete guidelines that regulators of network industries should follow in removing regulatory controls: To achieve the productive and allocative benefits of competition and to ensure that the transition from regulation to competition is accomplished fairly, regulators should observe the principles of economic incentive, equal opportunity, and impartiality. Economic incentives allow incumbent firms to maintain their quality of service and innovation and investment, and allow them to recover stranded costs for past, present, and future regulatory obligations. Regulators can ensure equal opportunity by ensuring that regulation falls evenly on both competitive entrants and incumbents. Impartiality in increasing competition can be achieved by regulators refraining from market interventions that favor particular competitors. Only by treating incumbents and entrants symmetrically and resisting the temptation to manage competition will the regulators ensure that the deregulatory process in network industries will yield all of the benefits of market competition.

Number of Pages in PDF File: 32

JEL Classification: K0, K2, K21, K23, L4, L5, L51, L9, L96

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Date posted: November 6, 2001 ; Last revised: November 2, 2009

Suggested Citation

Sidak, Gregory and Spulber, Daniel F., Deregulation and Managed Competition in Network Industries. Yale Journal on Regulation, Vol. 15, No. 1, pp. 117-147, Winter 1998. Available at SSRN: http://ssrn.com/abstract=289849 or http://dx.doi.org/10.2139/ssrn.289849

Contact Information

J. Gregory Sidak (Contact Author)
Tilburg Law & Economics Center (TILEC), Tilburg University ( email )
Tilburg, 5000 LE
Netherlands
Criterion Economics, L.L.C. ( email )
1614 20th Street, N.W.
Washington, DC 20009
United States
(202) 518-5121 (Phone)
HOME PAGE: http://www.criterioneconomics.com
Daniel F. Spulber
Northwestern University - Kellogg School of Management ( email )
606 Leverone Hall
2001 Sheridan Road
Evanston, IL 60208
United States
847-491-8675 (Phone)
847-467-1777 (Fax)
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