Privatising Network Industries

40 Pages Posted: 24 Mar 2004

See all articles by David M. G. Newbery

David M. G. Newbery

University of Cambridge - Department of Applied Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 2004


Successful network utility privatisation requires incentive-based regulation that allows investment to be adequately rewarded from unsubsidised revenues while maintaining quality, and restructuring that permits effective competition for the network services. The potential for success and the size of the potential gains from privatising and restructuring vary by utility, with a ranking telecoms, gas, electricity, water and lastly, rail. There are doubts whether privatising rail delivers sustainable improvements. The paper gives evidence primarily from the UK, and surveys some of the international evidence. Real consumer prices for telecoms, gas and electricity fell in the UK, overcoming most opposition to privatisation.

Keywords: privatization, regulation, competition, telecoms, electricity, gas, water, rail

JEL Classification: L33, L51, L91, L94, L95, L96

Suggested Citation

Newbery, David M. G., Privatising Network Industries (February 2004). Available at SSRN: or

David M. G. Newbery (Contact Author)

University of Cambridge - Department of Applied Economics ( email )

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Cambridge, CB3 9DE
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+44 1223 335 246 (Phone)
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Centre for Economic Policy Research (CEPR)

United Kingdom
+44 1223 335 246/7 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679

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