DESIGNER MARKETS

1
DESIGNER MARKETS INDUCING MOTIVES and PROVIDING
ESSENTIAL FACILITIES in TELECOMMUNICATIONS and ELE
CTRICITY
2
INTRODUCTION
The Carrot and the Stick
Price-Caps
Access to Essential Facilities
3
TELECOMUNICATIONS
Local Exchange Networks
Interconnected Networks Complements
Substitutes
4
PRICING ACCESS
Theories
ECPR and Ramsey
Practice The FCC Guidelines
5
ELECTRICITY
Market Design
Generators Transmission Networks Transmission
Coordinators Distribution Companies Retail
Marketing Companies
6

PROBLEMS
Market Power in the Power Market
Transmission Troubles Squeezed Retail Competition
7
SUMMARY

• Access to Essential Facilities Opens Competition
  (and Price Caps for Service)
• Jurisdictional Changes often Needed
• In Telephone, Consumer Benefit and Rapid
  Technological Change but Transition Awaits
• In Electricity, Consumer Benefit on Average but
  Generation Transmission Troubles and Consumer
  Information Gap