This report is the first in a new series, Monitoring European Deregulation (MED), launched by CEPR and SNS Förlag in 1997. The MED Reports feature new, policy-oriented research on the liberalization of the European markets of the major 'network industries:' telecommunications, energy, air transportation, rail, and water. Addressed to a wide audience of both academics and European decisionmakers in the private-sector and policy communities, at both the national and EU level, the series will play an important role in informing the policy debate and influencing current thinking on these issues.

Network industries such as electricity, gas, rail, local public transport, telecommunications and postal services are recognised by the EU as crucial for fostering European social and territorial cohesion. Providing an overview of key policy reforms in these industries and an empirical evaluation, this thought-provoking book offers a critical perspective on the functioning of the networks that provide vital services to EU citizens.

This book addresses critical issues in the governance of network industries in terms of institutional design, technology and policy. Infrastructures are subject to substantial readjustments of governance structures, often labeled as liberalization, privatization or reregulation. This affects all traditional infrastructure sectors including communications, energy, transport and water. This volume highlights and illustrates some of the major challenges for readjusting the governance of network industries from an economic, institutional, political and technological perspective. The three parts of the book address the institutional design of infrastructures, the role of technology in different sectors, and actor behavior. Adopting a multidisciplinary perspective, this book will appeal to economists and political scientists with an interest in the management of network industries. It will also be of great value to policy-makers and regulators in the field.

'To learn about how economic and institutional forces have shaped the network industries and policies towards them, read the first part of the book. To discover their impacts on particular industries, read the second part. And to find out what has happened in particular countries, read the third part. I think anyone interested in network industries should read all of it! The book's structure allows for many interesting comparisons across countries and sectors.' Richard Green, University of Birmingham, UK 'This is a very useful and comprehensive guide to reforms in network industries in communications, energy, transport and water. It is organized by generic topic, sector and region. Its authors are acknowledged experts. I am confident that this Handbook will be a widely read and valuable resource for many years.' Martin Cave, London School of Economics, UK 'Quite an accomplishment, this Handbook provides by far the most comprehensive overview of the role of the private sector and competition in infrastructure industries, with thoughtful surveys of each of the major infrastructure sectors and of the key regions and countries.' José Gómez-Ibáñez, Harvard University, US In recent decades, all infrastructures have undergone significant restructuring. This worldwide phenomenon is often labelled 'liberalization' and although expectations were high with respect to lower prices, greater efficiency and innovation, the expected gains have not always been fully realized. This extensive, state-of-the-art Handbook provides a comprehensive overview of the various experiences of liberalization across different sectors, regions and disciplines. The multidisciplinary approach focuses on the economic, political and institutional aspects of liberalization as well as, to a lesser extent, on technological issues. As such, it constitutes a unique contribution, as this broad overview is often lost in the sector specific, country-focused and purely disciplinary approaches prevalent in the current literature. Sectors explored include telecoms, the Internet, energy and transport, whilst the truly global perspective incorporates unique case studies from an array of developed and developing countries including the US, China, India and the EU. The International Handbook of Network Industries will become the definitive volume for academics researchers and students of economics, political science and law interested in infrastructure regulation. It will also prove a valuable guide to practitioners and policy-makers involved in liberalization and competition.

This book convincingly argues that from a theoretical point of view present day network industries offer opportunities for strategic behaviour and that these opportunities are also actually utilized in practice. The authors show that this behaviour can be harmful to the realization of the expected positive effects of institutional changes such as liberalization and privatization (e.g., innovation and lower prices). The authors make their case in a solid theoretical way illustrated with insightful case studies. This book is a must for academics, managers and policy makers in today s network industries. John Groenewegen, Delft University of Technology, The Netherlands This in-depth book explains how institutional changes such as the privatization and liberalization of network industries, for example transport, energy or telecommunications, can frequently be disappointing. The expected benefits such as lower prices, innovation and better services fail to materialize, often because the number of competitors is low. The authors demonstrate how strategic actor behaviour of one or more of the firms involved can help explain these disappointing results. This book elucidates the concept of strategic behaviour and portrays it in real-life examples to aid our understanding of this important phenomenon in terms of policy and organizational decision-making. It clearly demonstrates the adverse effects strategic behaviour can exert on the quality of infrastructure provision after liberalization. The theoretical sections are backed by empirical examples from throughout the world. The unique multidisciplinary approach will ensure a broad readership among students, researchers and policy-makers with an interest in the economics, politics and management of infrastructure and network industries.

A dramatic change of ownership, regulation, and organisation of essential public services, such as electricity, gas, and telecommunications, has taken place in Europe in less than 20 years. This was not the outcome of spontaneous adaptation, but an entirely top-down policy experiment, mainly conceived in London during Mrs Thatcher's years, then pursued in Brussels - the 'capital' of the European Union - and imposed on more or less reluctant players by laws, directives, regulations, and administrative and judicial decisions. The European reform paradigm revolves around three pillars: privatisation, unbundling, and regulated liberalisation of network industries. These industries, despite the reforms, are still special, as they include core natural monopoly components (the electricity grid, the gas pipelines, the telephony networks, etc.), are often based on complex system integration of different segments (for example of electricity generation, transmission, distribution and retail supply), and offer services that have critical social and economic importance, from heating to internet. This book offers a careful scrutiny of energy and telephony reforms and prices paid by households in 15 countries across Western Europe. It attempts to answer such questions as: Are the consumers in Europe happier than they were before the reforms? Do they pay less? Do they get a better quality for the services? Network Industries and Social Welfare provides an overview of the main facts, the conceptual issues, and of the empirical evidence on pricing, perceptions of quality of service, and the issues of utility poverty and social affordability. It suggests that the benefits of the reforms for the consumers have often been limited and that governments should reconsider their overconfidence in regulated market mechanisms in network industries.

Competition in network industries faces particular problems which are analyzed from both a theoretical and policy perspective. Issues of vertical integration, deregulation and privatization are covered. While competition and privatization are rapidly unfolding in telecommunications in Western and Eastern Europe, energy and railway transportation represent sectors of more gradual liberalization. The different market characteristics of telecommunications, energy and transportation raise consistency problems in the fields of deregulation, investment strategies and internationalization. While transformation policies create opportunities for liberalization in Eastern Europe and Russia the latter shows critical problems in ending monopoly and state ownership. Network industries could be subject to competition and promise major investment opportunities plus consumer benefits.