Oligopolies in electronic communications: more concentration, more regulation?

The consolidation trend in fixed and mobile telecoms is leading to more concentrated oligopolistic markets with fewer, larger operators. In February 2015, BEREC (the Body of European Regulators for Electronic Communications) ran a workshop to discuss the implications of this trend for regulation. Based on Oxera’s contribution to the workshop, we discuss when ex ante regulation of oligopolies in the electronic communications sector might be required

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Pass-on in regulated industries: what’s in the RAB?

The number of cartel findings across Europe in markets that provide inputs (e.g. power transformers, plastic pipes and cement) to regulated industries is on the increase, as is the number of cartel damages claims brought by regulated companies. How does economic regulation affect pass-on? Are there situations where, despite incentive regulation, pass-on is more than zero?

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Aiming high in setting the WACC: framework or guesswork?

What is the role of the weighted average cost of capital (WACC) for regulators in promoting the right level of investment by the industry? Regulators around the world have often chosen to ‘err on the side of caution’—in other words, to choose a high estimate when setting the WACC, in order to offset perceived risks of underinvestment. What are the reasons behind this approach, and is it likely to achieve its intended outcome?

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