ECONOMICS OF REGULATION
WHAT WE DO
Economic regulation concerns the set of measures that a public subject (the regulator) defines in a market to 'force' certain behaviours from all (or some) subjects in many network services markets (in particular), which otherwise would not have been adopted: think - for example - of the determination of tariffs of many public services, of the minimum levels of quality of the required service.
We offer our clients economic assistance in proceedings before national regulatory authorities (including AGCOM, ARERA, ART, ADM).
We have assisted numerous clients in proceedings before national regulatory authorities or administrative courts in various sectors: electronic communications, broadcasting, media, energy, transport, postal services, gaming and betting. Some examples are the following:
- we assisted a client before a national regulatory authority by producing a detailed economic analysis to demonstrate that the prices charged by an operator for certain services were fair, reasonable, and non-discriminatory (FRAND);
- we assisted a client, an incumbent operator, in defining and providing the Industry Authority with the incremental costs (LRIC) of a service;
- we defined, at the request of an operator, a model to check for the potential presence of margin and price squeeze;
- we assessed the uneconomic, non-proportional and discriminatory nature of a public tender;
- we have demonstrated to the authority that the prices charged by an operator were appropriate and consistent with regulatory requirements.
WHAT IS ECONOMIC REGULATION?
Economic regulation refers to the set of explicit measures through which the government (or any public body or agency) induces in the economic agents present in a certain market certain behaviours that - in the absence of these interventions by the state - would never have been adopted. These measures may modify the structure of the market and influence the characteristics of transactions and their contractual conditions.
Economic regulation can affect producers, consumers and market structure and is usually introduced when a market has failures, such as a natural monopoly in the utilities sector, or barriers, which could limit the beneficial effects of competition. For example, the removal of entry barriers changes the structure of a market, leads to lower prices and increases output (Prosperetti, Marzi, Putzu, 2001).