Utility Regulation in Competitive Markets

Utility Regulation in Competitive Markets

Problems and Progress

Edited by Colin Robinson

This significant new volume contains incisive chapters on a number of prominent concerns, including changes in the British system of utility regulation, the spectrum allocation question, liberalisation of EU energy markets, security of supply issues, reform in the European postal sector, the future of rail regulation, the cost of capital and Ofcom’s strategic approach to regulation. Chapters on each topic are followed by comments from regulators, competition authority chairmen and other experts in the relevant fields. By confronting the most important international developments in utility regulation, the authors offer practical policy recommendations for an effective way forward.

CHAIRMAN'S COMMENTS

Leonard Waverman

Subjects: economics and finance, competition policy, public sector economics

Extract

60 Utility regulation in competitive markets CHAIRMAN’S COMMENTS Leonard Waverman I am really a poor choice to comment on this because I agree with the analysis: you should never have a neo-classical economist following another neoclassical economist. We should thank Tom for what he has done. He has really made two essential points. One is that we have not established private property rights in spectrum; we are still a long way from that. The second main point is the crucial confusion between on one end, the ownership of the property and, on the other, the access regime. A lot of the comments on ‘commons’ are really about what the price should be, and not what the regime should be. I searched for the definition of scarcity in Wikipedia: it says ‘scarcity is the central concept in economics’. In fact, neo-classical economics is about the allocation of scarce goods. Scarcity means not having sufficient resources to produce enough to fulfil unlimited subjective wants. But there are many meanings, unfortunately, and a lot of loose talk at the moment. For example, recently (Spring 2005) a Saudi oil minister was quoted as saying that there is no scarcity of oil. Does he mean that oil is available at a zero price? No. He says the world has sufficient oil resources, that the problem is not one of availability, but rather one of deliverability: ‘There will be no scarcity of petroleum in the foreseeable future. Prices are under pressure because...

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