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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