Over the last nineteen years public utility services have been transformed by the introduction of competition. Greater reliance on competition has been a key factor in improving the way these sectors are regulated, leading to improved efficiency, innovation and more attention to the needs of consumers. Introducing competition in different parts of public utility services is not simply a matter of removing legal barriers to entry. It is usually also necessary to introduce new regulation to ensure that new firms have access to any key inputs or services that can only be obtained from the incumbent monopoly firm. The incumbent firm may not willingly provide these inputs, especially where doing so means the potential loss of a profitable line of business to a rival. Incumbent firms can resist the growth of competition by refusing to supply essential inputs, supplying them at a lower quality, or at a higher price.

public services, competition, monopoly, restructuring public services