Abstract
Many network industries (telecommunications, electricity, natural gas, postal services, water and sewage services, etc.) are confronted with significant logistic and behavioral problems in their transition towards a (more) competitive environment and structure. In some of those industries, this transition is already more or less achieved while in others, it is still a project rather than a reality even if pressures to achieve such a state of reasonable competition have been mounting for quite a few years by now. It is believed that a competitive structure is the only way to credibly incite firms to provide efforts in minimizing costs and to offer to their different classes of clients and customers, both industrial and residential, the best quality products optimally matched to their specific needs. On the other hand, when different providers of goods and services are intensively engaged in a competitive process, it becomes difficult to ensure that an adequate level of coordination is taking place in order for the industry to benefit from economies of scale and in particular from economies which are external to the firms but internal to the industry. In the network industries, these economies are very important at least on specific well-identified essential links of the network. Those are subject to monopolization: they are essential inputs and would be, at least potentially, inefficiently provided if more than one producer was involved. If there ever existed natural monopoly sectors, these essential network links are thought to be perfect examples.
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Boyer, M., Robert, J. (1998). Competition and Access in Electricity Markets: ECPR, Global Price Cap, and Auctions. In: Zaccour, G. (eds) Deregulation of Electric Utilities. Topics in Regulatory Economics and Policy Series, vol 28. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5729-6_3
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DOI: https://doi.org/10.1007/978-1-4615-5729-6_3
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