By Prof. Dr. Paul J. J. Welfens, Prof. George Yarrow, Prof. Dr. Ruslan Grinberg (auth.), Prof. Dr. Paul J. J. Welfens, Prof. George Yarrow, Prof. Dr. Ruslan Grinberg, Dipl.-Vw. Cornelius Graack (eds.)
Competition in community industries faces specific difficulties that are analyzed from either a theoretical and coverage standpoint. problems with vertical integration, deregulation and privatization are lined. whereas pageant and privatization are speedily unfolding in telecommunications in Western and jap Europe, power and railway transportation signify sectors of extra sluggish liberalization. the various industry features of telecommunications, strength and transportation elevate consistency difficulties within the fields of deregulation, funding options and internationalization. whereas transformation guidelines create possibilities for liberalization in jap Europe and Russia the latter exhibits severe difficulties in finishing monopoly and nation possession. community industries should be topic to festival and promise significant funding possibilities plus purchaser benefits.
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Additional info for Towards Competition in Network Industries: Telecommunications, Energy and Transportation in Europe and Russia
Example text
To illustrate the point simply imagine that in each European country airline traffic control were vertically integrated with the nationally dominant airline. The number of effectively competing airlines at given time intervals would drastically reduce in the long run. This points to the importance of the long-run neglected problems of vertical integration in infrastructure. Fig. A1: Competition in Network Industries Intensity of Competition Fully Integrated etwork ompetition ompetition in the et ( eparation of etwork and ompetitive ervice) Competition for the etwork (License for an Integrated etwork) Regulated Monopoly Intensity of Regulation Source: WELFENS/GRAACK (1995).
13 Networks consist of integrated elements in space so that local bottleneck problems can impair the functioning of the whole network. If overcoming the bottleneck requires dedicated specific investments there will be market entry problems. The provision of infrastructure traditionally was heavily regulated by governments in Europe. Moreover, foreign investment in network industries was restricted - only recently some liberalization was introduced in telecommunications where public telecoms operators extended their business beyond the home territory in the 1980s.
E. it has falling average costs but this itself is no reason to organize telecoms as a regulated monopoly, where state ownership was combined with monopoly in Europe. It took until 1984 before the Commission developed a vision of a more competitive market, later reinforced by free choice of the telephone handset and liberalization of value-added services; fmally, the liberalization date of January 1, 1998 for voice telephony and network operation was adopted (the Commission which had to decide about allowing Spanish Telefonica to join the Unisource consortium, consisting of the Swiss PTT, the Dutch KPN and the Swedish Telia, successfully pressed Spain to forego an extended transition period and match 1998, although only in December).
