CRNI Special Issue “Ownership Unbundling in Network Industries”

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Authors: G. Brunekreeft, R. Meyer

Volume 12 - p. 294

Benchmarking Economies of Vertical Integration in U.S. Electricity Supply: An Application of DEA

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Authors: R. Meyer

Volume 12 - p. 299

Inhoud: This study applies a frontier benchmarking approach to measure economies of scope between the vertical stages of electricity supply in the U.S. electricity industry. By comparing different frontiers for integrated and separated supply of electricit...y based on a bootstrapping DEA, two types of vertical unbundling are analyzed. Separating the generation stage from networks and retail appears to be the more costly alternative with an average cost increase of 19 percent. Our second scenario, covering one of the options of transmission unbundling to be implemented in the European Union, shows an average cost increase below 2 percent.hide

Real Unbundlings: The Foundation for a Competitive Gas Market in the United States

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Authors: J. D. Makholm

Volume 12 - p. 321

Inhoud: The public policy of “unbundling” has been a prominent part of regulatory reform of the gas industry both in Europe and the United States. Two different austere unbundlings of the US gas pipeline system – one imposed rigidly by Congress in 1935, on...e voluntarily accepted by pipelines decades later (and later brilliantly modified by the regulator) – were prerequisites for North America’s uniquely competitive gas market that fully blossomed after 2000. This paper traces the economic and institutional roots, stretching over decades, of those US pipeline unbundling efforts and contrasts those efforts to current legislated unbundling efforts in Europe.hide

Regulatory Unbundling in Telecommunications

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Authors: G. Knieps

Volume 12 - p. 344

Inhoud: Due to its dynamic nature, and the increasing importance of competitive subparts, the telecommunications sector provides particularly interesting insights for studying regulatory unbundling. Based on the theory of monopolistic bottlenecks the falla...cies of overregulation by undue unbundling obligations are indicated. Neither the promotion of infrastructure competition by mandatory unbundling of competitive subparts of telecommunications infrastructure, nor regulatory induced network fragmentation within monopolistic bottleneck components is justified. The impact of the shrinking of the areas of network specific market power on the remaining unbundling regulation is analyzed. Finally, the phasing-out potentials of unbundling regulation in European telecommunications markets are pointed out.hide

Unbundling of Non-Profitable Rail Infrastructures

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Authors: H.-J. Weiss

Volume 12 - p. 357

Inhoud: So far the unbundling debate in the European railroad sector has concentrated on the vertical relationship between train services and rail infrastructures. This paper argues that besides this important vertical dimension there is also an important ...horizontal dimension of the unbundling topic in the railroad sector, namely the distinction between profitable and non-profitable rail infrastructures. The addition of the horizontal dimension is necessary to capture a special feature of the railroad sector (at least in Europe): its significant financing out of public budgets. The paper analyzes in which way unbundling of non-profitable rail infrastructures can contribute to the solution of the market power problem in the railroad sector. Two economic criteria for disaggregating the parts of a railroad system are presented: competitiveness and profitability. The two regulatory problems caused by market power are discussed. The discrimination problem exists for all rail infrastructures, irrespective of their profitability, whereas the price level problem is absent for non-profitable ones. To avoid excessive or insufficient price regulation, the implementation of horizontal accounting separation is recommended. Finally, it is argued that accounting separation to tackle the market power problem will also contribute to the solution of the procurement problem in case of subsidized rail infrastructures.hide