Successes and Failures in Regulating and Deregulating Utilities
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Successes and Failures in Regulating and Deregulating Utilities

Evidence from the UK, Europe and the USA

Edited by Colin Robinson

This book is the latest annual review of utility regulation and deregulation, published in association with the Institute of Economic Affairs and the London Business School
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Chapter 4: Ofcom and light touch regulation

Martin Cave


Martin Cave The Communication Bill, published in November 2002, imposes duties on Ofcom to review regulatory burdens: (1) Ofcom shall keep the carrying out of their functions under review with a view to securing that regulation by Ofcom does not involve – (a) the imposition of burdens which are unnecessary; or (b) the maintenance of burdens which become unnecessary. (2) Ofcom shall, from time to time, publish a statement setting out how they propose during the period for which the statement is made to secure that regulation by Ofcom does not involve the imposition or maintenance of unnecessary burdens. (Clause 6) In the draft bill, this state of affairs was described as ʻlight touch regulationʼ, but the Joint Parliamentary Scrutiny Committee found this formulation inappropriate. In my view, the phrasing is largely a matter of taste, provided that the underlying notion is accepted that regulatory intervention should be restricted to cases where it yields a positive return vis-à-vis the relevant fallback – reliance on competition law. The key question, therefore, is how light can light be? A question of this kind cannot be answered in the abstract, but is addressed here, in four dimensions. The first three relate to telecommunications, pay-TV and public service broadcasting. In practice they deal with the regulation of three firms, BT, BSkyB and the BBC. The fourth dimension, however, is more speculative, since it concerns the new modus operandi for the allocation of spectrum, a significant input for each of the three firms or organizations...

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