This 1998 book addresses deregulatory policies that threaten to reduce or destroy the value of private property in network industries without any accompanying payment of just compensation, policies that are termed 'deregulatory takings'. The authors further consider the problem of renegotiation of the regulatory contract, which changes the terms and conditions of operation of utility companies. They argue that constitutional protections of private property from takings, as well as efficient remedies for contractual breach, provide the proper foundation for the competitive transformation of the network industries. The benefits of competition do not stem from government regulations that redistribute income from utility investors to customers, nor do such benefits stem from regulatory policies for network access that promote free riding on incumbent facilities by entrants. Such actions represent a new version of increased regulation, not deregulation.
• Of interest to scholars in law and economics, industrial organization, and regulatory economics • Invaluable for practicing lawyers and consulting economists in regulated industries and regulators, jurists and legislators • Provocative contribution to legal and economic history and a valuable reference guide
Preface; 1. The nature of the controversy; 2. Deregulation and network pricing; 3. Quarantines and quagmires; 4. The regulatory contract; 5. Remedies for breach of the regulatory contract; 6. Takings and the property of the regulated utility; 7. Just compensation for deregulatory takings; 8. The efficient component-pricing rule; 9. The market-determined efficient component-pricing rule; 10. Answering the critics of efficient component-pricing; 11. The equivalence rule; 12. TSLRIC pricing and the fallacy of forward-looking costs; 13. Deregulatory takings and efficient capital markets; 14. Limiting principles for stranded cost recovery; 15. Deregulation and managed competition in network industries; 16. The tragedy of the telecommons; References; Indices.