Sup­por­ting re­gu­la­to­ry ma­na­ge­ment through eco­no­mic ex­per­ti­se.

Starting in the 1990s, Europe's infrastructure markets have been progressively liberalised. The expectation was that this would lead to greater competition and thus put pressure on suppliers to become more efficient. The intended outcome was that services would be better aligned with customer needs, combined with faster innovation, higher productivity and greater affordability for end consumers as a result of lower profit margins. As the period of regulation has become longer, the focus of the regulation debate between regulated companies, competitors and regulatory agencies has shifted from classical price and access regulation to questions of competition.

When it comes to issues of market regulation, regulatory management offers a range of levers at the interface between regulators and internal company functions:

• Participation in the regulatory debate: how does one establish a position on the regulatory intensity of unregulated (or partially regulated) areas? How does one provide input on regulatory principles and legislative processes into decision-making processes? How does one develop and position economic arguments?
• Strategies in dealing with the regulator: what is the best way for regulated companies to cooperate and interact proactively with the regulatory authority? How does one involve the regulator when it comes to planned activities in regulated markets (pricing, offering of products or services, market access regulations etc.) and what information should be provided?
• Developing economic arguments for regulatory processes: the increasing “economisation” of regulatory approaches in legal norms and standards means that the economic interpretation of the situation under review is becoming more important. Are customer price differences justified by differentiated cost structures of the services provided? Does actual pricing comply with regulatory yardsticks for lower price limits like long-run incremental costs? Is a company behaving in a discriminatory fashion in competition?
• Data in support of regulatory processes: In practice, there's a clear focus on price regulation. How does one ensure that the network access fees which the operator charges to competitors or customers are non-discriminatory, cost-based and free of any unlawful surcharges or discounts? In addition, end consumer prices are reviewed for affordability and to ensure they are non-discriminatory. How do companies substantiate their pricing on the basis of demand elasticity or their costs? Can the costs be explained using data from financial or cost accounting, and can they be separated by reports to include only regulated services?
• Organising regulatory management: how can regulatory management be set up in such a way that there are clearly-defined responsibilities when it comes to one-off pricing or price-cap reviews? What is the best way to handle recurrent regulatory processes? How should the organisational linkages to controlling, marketing or operational departments be designed?

   

CTcon has been working with regulated companies since 1995, helping them design their regulatory management framework and assisting them in regulatory proceedings at the EU Commission, Germany's Federal Cartel Office and the Federal Network Agency. We typically assist incumbents in the following sectors:

• Energy
• Rail transport
• Postal services
• Telecommunications
• Airports

Our work focuses on providing strategies, procedural approaches and data in response to regulatory issues. We complement this with economic analyses and research in collaboration with  partners from our academic network. International legal firms provide additional support on legal matters.

Make CTcon your partner of choice when it comes to developing optimal solutions to diverse and complex regulatory management issues.