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The 'baby and the bath water': avoiding efficiency mishaps in regulating monopoly infrastructure

Chairman's speech

On 5 July 2002, the Chairman Gary Banks presented a paper to the Independent Pricing and Regulatory Tribunal (IPART) conference 'Incentive Regulation at the Crossroads'.

Contents

Competition is not an end in itself
'Perfect' competition would be costly
The collective impact of substitution possibilities
Incomplete incentives to exploit market power
Countervailing power
Avoiding a numbers game
Monopoly power may be used efficiently

Investment matters too
The 'truncation problem'
Regulatory-induced service failure

Regulatory measures must be 'workable'

Regulators, too, are only human

Statutory guidance is fundamental

The need for balance

References