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Network operating industries – liberalization within an I nternal M arket

Network operating industries – liberalization within an I nternal M arket. Energy, transport, telecommunications. Structure. Characteristics of net - operating industries History Theoretical approach of liberalization Practical effort and results: In EU 15 In NMS. Characteristics.

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Network operating industries – liberalization within an I nternal M arket

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  1. Network operating industries – liberalization within an Internal Market Energy, transport, telecommunications.....

  2. Structure • Characteristics of net-operating industries • History • Theoretical approach of liberalization • Practical effort and results: • In EU 15 • In NMS

  3. Characteristics • Transport infrastructure = network = monopoly • too high entering costs – doubling the net? – natural monopoly • Monopoly from regulation • Special technical requirements • Special public interests (service in p.int.,etc.) • Solution: National monopolistic state company

  4. History Example – US telecommunications: Bell´s Company built a telephone network and until 80s was legislatively protected against entrants into the industry Restructuring: Local: monopolistic „Baby Bells“ Long distance: competitors AT&T , MCI

  5. Europe • National monopolistic state owned companies • Matter of pride ( national air carriers)

  6. Creating Internal market: STEP 1. Opening national markets= abolishing national monopolies

  7. Step 2 LIBERALIZATION

  8. Theoretical approach of liberalization MODELS: • Single Buyer ( SB ) • Third Party Approach ( TPA )

  9. SINGLE BUYER • Competition into a production part; • Transport and trade – regulated monopolies: - transport (transmission) monopolist - wholesale monopolist - retail trade local monopolists (Ownership linkages?) • Regulation; control !? (missing costs comparisons)

  10. THIRD PARTY ACCESS(sharing a net) • Competition into production • regulated monopoly in transport (transmission) • all the trade competition • Regulation: a) access to a transmission network b) public interest (supplies, quality, prices)

  11. Results Energy

  12. Full opening Unbundling TSO Regul. Balancing m. A 2001 L Ex-ante Y B 2007 L Ex-ante N DK 2003 L Ex-post Y Fin 1997 O Ex-post Y F ? M Ex-ante Plan D 2005 M TPA Plan EL ? M Ex-ante N IRL 2003 L Ex-ante N I ? L Ex-ante Plan Neth 2003 L Ex-ante Y Port ? L Ex-ante N E 2003 L Ex-ante Y S 1998 O Ex-post Y UK 1998 O Ex-ante Y “State of play“ - Electricity

  13. Free choice 2004-5 for large consumers (companies) 2008- for households

  14. Full opening Unbundling TSO Regul. Balancing m. A 2001 A TPA Y B 2005 L Ex-ante N DK 2003 L Ex-post Y Luxb 2007 A Ex-ante Y F ? A Ex-ante Plan D 2000 A TPA Plan EL 2006 L ? ? IRL 2005 M Ex-ante N I 2003 L Ex-ante Plan Neth 2004 A Hybrid Y Port 2006 ? ? N E 2003 L Ex-ante Y S 2006 A Ex-post Y UK 1998 O Ex-ante Y “State of play“ - Gas

  15. Negative experiencefrom outside EU US electricity collapses “Black-outs” (California 2002)

  16. Results Transport etc.

  17. Liberalization and privatization of the British Railroads Fate of RAILTRACK

  18. How after the East Enlargement? The transport network is poor!?...

  19. ACTION PROGRAM 2007-2013: • Construction of the entire network will cost an estimated €600 billion, • of which €100 billion will be spent in the new member states. • The 30 priority projects alone will account for €225 billion. • Funding: national budgets, users (infrastructure charges), EU (€20 billion)

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