Competition and Regulation in Network Industries

Incumbent postal operators (POs) are particularly challenged with rapid technological developments and especially with digitalization which substitutes their letter mail, yet generally boosts parcel volumes. As a consequence, they have to rethink their strategy, especially for their post office network. The article presents potential strategies and discusses the main trends in postal network evolution among incumbent POs, focusing in particular on the examples of Australia, New Zealand, Switzerland, the United Kingdom, Italy, and the United States, and assesses these strategies against a set of key performance and development indicators.

This article assesses the innovation policy objectives underlying the proposed European Union (EU) Telecom Single Market regulation considering disruptive technological developments. The article explores the network operator’s dilemma how to deal with investments in a time where fundamental innovation comes from outside and the regulator’s dilemma how to improve the conditions for access to the operators’ networks and how to safeguard a level playing field. The EU measures with respect to two technological issues are discussed considering the EU’s policy objectives with respect to the deployment of 5G and the goal to ensure very high-speed broadband access in the EU. Thought is given to the effectiveness of imposing active and passive infrastructure arrangements. A mix of regulatory measures is considered in moving towards smarter electronic communications networks regulation.

Digitalization is creating a new model of industrial organization as online platform intermediate in multisided markets. The purpose of this article is to demonstrate how the platform paradigm provides a simple and useful framework to analyze the impact of digitalization on network industries. The first online platforms (searches and social platforms) disrupted content industries (music, newspapers, media, etc.) but as platforms proliferate, they are also disrupting industries with physical assets, such as accommodation. Disruption has reached network industries, and similar features emerge as they are all being “platformed.” On the one hand, platform-based services are replacing traditional network industry services. This is the case of electronic mail and postal service and carpooling platforms and railways. On the other hand, platforms are commoditizing network industry services, as they become mere sides in multisided markets coordinated by a platform. This is the case of telecom services and over the top providers (WhatsApp, Skype, and YouTube) and, potentially, of isolated transport services and “Mobility-as-a-Service” platforms. Regulation is becoming a key consideration. First, there is a debate on whether platforms should be subject to the same regulatory obligations as traditional network players. Second, there is a debate on whether platforms should have access to network services under regulated terms. Overall, platforms are replacing former monopolists in the central role as coordinators of the sector.

The Internet of Things (IoT) gains momentum. Developments regarding smart grids, intelligent transportation systems, and low-power networks for smart cities constitute significant drivers in the evolution of network industries. IoT creates an array of new requirements for information and communications technology (ICT) data transmission: In addition to real-time and data geopositioning, new service characteristics result from the change of the traditional sender–receiver perspective of Transmission Control Protocol/Internet Protocol (TCP/IP) to content relevancy for many users (e.g. cloud computing) and dynamic changes of the state of devices. The future development and success of IoT hinges critically on the provision of heterogeneous quality of service (QoS) requirements which cannot be provided by best-effort TCP/IP Internet. It is thus not surprising that both in the US and the EU network neutrality regulations are currently being reconsidered. Alternative network logistics (virtual networks) dealing with heterogeneous QoS requirements of network traffic may require fundamental deviations from traditional Internet architectures. Corresponding logistics operating over joint physical infrastructures gain increasing attention under the heading of future networks (FNs). The goal of this article is to focus on the economic mechanisms of how the potentials of QoS differentiation in the context of FNs can be fully exploited and incentivized within innovative all-IP-based QoS traffic architectures.

In this article, we examine the convergence of business models and long-term financing to close the infrastructure gap in the context of the energy transition, revisiting challenges, and issues faced by policy makers and investors in mobilizing capital in a disrupted environment. Contextual analysis framework is developed to capture information from interviews with key stakeholders. We single out business models that emerged in the energy industry requiring different types of return and financing needs. The convergence among the type of the business models and the financing requirements determines the return allocation. Additionally, we identify key regulatory challenges that should be addressed along the way to promote investments and innovation in the context of the energy transition.

The increased use of public–private partnerships (PPPs) around the world to build infrastructures and provide public services has led to several concerns. One of the main pitfalls of PPPs is an abnormal frequency of renegotiations, especially renegotiations occurring during the first years of contract. The Latin American experience has been the most relevant in terms of research on PPP renegotiations. Using the literature on PPP renegotiations in the Latin American context, this article focuses on the analysis and discussion of renegotiations. We use the experience from Brazil, at the State (region) level, of PPPs and renegotiations. From 2006 to 2016, Brazil developed 42 PPP projects in several sectors. From these, 27 were renegotiated at least once. We found a high number of renegotiations within a short period since the start of the contract for the first renegotiation to occur. The motives for renegotiations are mainly perceived from the public sector, particularly failure in planning, concept, and bidding. Electoral periods and the political connections of shareholders also have an impact on renegotiations. Based on the Brazilian experience, we drawn some policy implications.