Restructuring Public Utilities for Competition

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10 Aug 2001
9789264193604 (PDF) ;9789264187269(print)

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Public utility industries, once regarded as monolithic monopolies, in fact are made up of many separate activities, many of which can sustain effective competition. But owners of bottleneck facilities are often in a position to restrict or limit the growth of competition. There is a growing realisation that fundamental structural changes are often necessary if the full benefits of competition are to be achieved for users and consumers.

This publication explores the nature and impact of rules which affect the structure of public utility industries. It covers not only the theory behind different forms of separation but also practical experience in a wide variety of countries and sectors (railways, electricity, postal services, telecommunications, gas, air services, and maritime transport). It also contains the new OECD Recommendation on Structural Separation of Regulated Industries, which urges Member countries to consider separating the monopoly and the competitive parts of regulated industries, especially during the process of privatisation or liberalisation.

Also available in French
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Table of Contents

1. The Basic Problem and the Tools for Addressing It
-Vertical Integration between Non-Competitive and Competitive Activities and the Incentive and Ability to Restrict Competition
-Tools for Protecting and Promoting Competition
2. Vertical Separation versus Access Regulation
-Separation Limits the Need for Regulation that is Difficult, Costly, and only Partially Effective
-Separation Improves Information and Eliminates Cross-Subsidisation
-Separation Forecs Losss of Economies of Scope
3. Experiences with Different Approaches to Separation in Different Industries
-Airports, Ports, Roads
-Natural Gas
-Rail Services
-Broadcasting and Broadband Interactive Services
-Postal Services
4. Summary
Annex: Recommendation of the OECD Council

Visit the OECD web site