Chapter 3: Competition and third-party access in railroads
The starting point of this chapter is to consider the key role of equal access to network infrastructures for enabling competition in the markets for network services. A general precondition for competition to evolve is the abolishment of legal entry barriers – only then can the potentials of active, as well as potential, competition be exploited by entrepreneurial initiatives. As long as network industries such as electricity, gas, telecommunications, aviation and railroads were organized as legally protected public utilities, the hierarchical end-to-end control of the whole value chains dominated. Neither competition nor access problems arose. Although network industries have been exempt from competition during most of the twentieth century, in the meantime, since the wave of liberalization and the opening of network industries starting in the 1970s and 1980s, competition has become the leading paradigm. Competition in network industries can have many faces. It may arise between alternative network infrastructure providers, as well as between network service providers. Due to the complementarity of network infrastructure capacities and network services, active and potential competition between different network service providers requires equal access to network infrastructures.
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