Institutional features of interaction of the state and of natural monopolies

© 2015, Mediterranean Center of Social and Educational Research. All rights reserved. The author examines institutional, as well as economic approaches to natural monopolies investigation. Institutional peculiarities of their development are analyzed; the structure of the institutional environment of natural monopolies is characterized. The problems of regulation of natural monopolies are identified. The process of regulation of natural monopolies is considered through the prism of the effect of dynamic inconsistency. The formal and informal interaction of natural monopolies and government agencies are defined. It is proposed a step-by-step state regulation of natural monopolies with due regard for market instructions maturity. There are formulated additional measures of state regulation of natural monopolies

Основные методы тарифного регулирования естественных монополий

BASIC METHODS OF TARIFF REGULATION NATURAL MONOPOLY YA. SHERSHUNOVICHРассмотрены сферы, относящиеся к естественным монополиям, и основные методы их тарифного регулирования. Проведена классификация методов тарифного регулирования, выделены основные подвиды стимулирующего регулирования: регулирование по методу разделения прибыли и убытков, регулирование по показателям эффективности, регулирование максимальной величины цен или валовой выручки. Проанализированы преимущества и недостатки, а также приведены примеры использования основных методов тарифного регулирования естественных монополий.= The article deals with the spheres relating to natural monopolies and the main methods of their tariff regulation. Classification of the tariff regulation methods has been carried out and the main subtypes of the incentive regulation has been defined: sliding scale regulation, efficiency based regulation, cap regulation. The author analyses advantages and disadvantages of the main methods of natural monopolies tariff regulation and shows the examples of their usage

Regulation of natural monopolies

This chapter provides a comprehensive overview of the theoretical and empirical literature on the regulation of natural monopolies. It covers alternative definitions of natural monopoly, regulatory goals, alternative regulatory institutions, price regulation with full information, regulation with imperfect and asymmetric information, and topics on the measurement of the effects of price and entry regulation in practice. The chapter also discusses the literature on network access and pricing to support the introduction of competition into previously regulated monopoly industries

Energy Networks, Natural Monopolies and Tariff Regulation

Energy networks, such as the networks for the transportation of electricity and gas, are natural monopolies, which implies that competition among these networks is not possible. In order to protect network users against monopoly prices and to give the network operators the incentive to operate efficiently, many countries have implemented tariff regulation. After discussing the economic consequences of natural monopolies and the need for regulation, this chapter briefly compares the various types of tariff regulation, discussing the incentive power, the ability to make a profit, and the reward on the costs of capital. The chapter concludes by discussing how tariff regulation may enable network operators to finance the necessary investments to connect new renewable energy production facilities

Optimal Price Regulation for Natural and Legal Monopolies

Optimal price regulation for natural and legal monopolies is an impossible task. The still difficult .task of good price regulation can be systematized by considering separately price level and price structure of the regulated firm. Various methods of price level and price structure regulation are evaluated and then considered for the regulation of electricity transmission, both in the context of an independent transmission company and of vertical integration between transmission and most of the generation capacity. The regulatory approach suggested uses price caps defined on two-part tariffs. This way, flexibility for short-term capacity utilization can be combined with incentives for investments in new transmission capacity.

Incentive Regulation of Natural Monopolies

The article presents the improved by the author classification of the methods of natural monopolies incentive regulation. The article deals with the main goals, essence and formulas of each method

Privatization of natural monopoly public enterprises : the regulation issue

Many developing countries are considering the privatization of public enterprise natural monopolies. Such as monopolies in charge of electricity, natural gas, waterand sewer, and telephone service. The author tries to answer two questions: (i) how great would the efficiency losses be, if any, if a public natural monopoly were privatized and allowed to function as an unregulated entity? and (ii) how much could performance be expected to improve if the privatized natural monopoly operated as a regular firm? The author argues that the deadweight losses from monopoly pricing by unregulated privatized natural monopolies are likely to be modest and may well be outweighed by improvements in technical efficiency. He also argues that regulation is not costless and may well foster static and dynamic efficiency losses greater than the deadweight monopoly losses it is intended to prevent. Also, the reduction of allocative inefficiency is only one of several objectives of regulation. If the case for regulation on efficiency is weak, then much greater attention must be paid to how these other objectives can best be achieved. Historically, achieving distributional equity has been an important objective of regulation. We have very little systematic knowledge about the actual distributional consequences of privatization and deregulation, so more research is needed.Administrative&Regulatory Law,Economic Theory&Research,Environmental Economics&Policies,Access to Markets,Markets and Market Access

Incentive Regulation of Natural Monopolies

The article presents the improved by the author classification of the methods of natural monopolies incentive regulation. The article deals with the main goals, essence and formulas of each method

Financial Market Bottlenecks and the \u27Openness\u27 Mandate

Financial market infrastructures (“FMIs”), which facilitate the execution of financial transactions, exhibit such strong economies of scale that they are natural monopolies. In each market, production is controlled by a few dominant players. Federal courts have traditionally checked the abuses of natural monopolies under the Sherman Act. Yet recent Supreme Court decisions have reined in the role of antitrust in regulated industries, where administrative bodies set and enforce standards. To this effect, financial regulations require certain FMIs to grant open, nondiscriminatory access to users. This Article argues that weak “openness” regulations must be buttressed by their antitrust counterpart — specifically, the essential facilities doctrine, which enables an excluded user to sue for wrongful denial of access to an FMI. This Article situates FMIs at the intersection of four seismic trends. First, the role of FMIs as a mitigant of systemic risk renders their growth inevitable. Second, open access has become fashionable in the regulation of other natural monopolies (e.g., net neutrality rules), but this approach requires precise standards. Third, essential facilities can supplement weak open access regulations, but the doctrine was nearly dismantled by the Supreme Court a decade ago. Finally, the balance between antitrust and regulation is due to be reset, and the next move will likely come from FMIs