Asymmetric regulation for competition in European railways?

Juan J. Montero
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Juan J. Montero: UNED University, Spain; European University Institute, Italy

Competition and Regulation in Network Industries, 2019, vol. 20, issue 2, 184-201

Abstract: There is an increasing number of voices calling for asymmetric regulation to reinforce competition in European railways as they are liberalized in December 2020. The regulatory framework defined in the Directives of the European Union (EU) might be insufficient to ensure effective and widespread competition. But the EU Directive declares tracks a natural monopoly, and structural measures in the form of vertical separation with transport activities have been imposed. Behavioral obligations have also been imposed on infrastructure managers in the form of access obligations. There is no room for asymmetry between competing networks, as tracks are a natural monopoly. Furthermore, as access conditions are ruled by the principle of nondiscrimination, it does not seem possible to introduce asymmetries in favor of newcomers, for instance in the form of access charges below the price charged to incumbent railway undertakings. For the rest of railway assets, which only exceptionally can be considered essential facilities, the EU Directives either impose no access obligations (rolling stock, drivers, ticketing systems) or when they impose access obligations (maintenance facilities), there is no formal asymmetry, as all undertakings are subject to the same access obligations. National regulatory authorities considering the introduction of asymmetric access obligations should take into account economic literature describing how asymmetries attract inefficient market entry, and they should consider that obligations introduced at a national level might fragment the Single European Railway Area.

Keywords: Railways; asymmetric regulation; essential facility; network access; rolling stock; ticketing (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:sae:crnind:v:20:y:2019:i:2:p:184-201

DOI: 10.1177/1783591719861722

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