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Multilevel regulation of the utilities sectors: telecommunication and gas in Belgium (REGUNET)

Research project TA/00/22 (Research action TA)

Persons :

Description :

Regulation is the “public administrative policing of a private activity with respect to a rule prescribed in the public interest” (Mitnick 1980), and encompasses a range of activities, such as the definition and enforcement of public service obligations, company status, competition rules, technical standards, and access prices. Increasingly, economic regulation of specific services has become a multi-actor, multi-level and multi-sector issue. While regulatory functions have been carried out for long by central government departments, they are increasingly shared with and delegated to functional specialized agencies, self-regulating bodies, as well as supra- and sub-national authorities.

“Multilevel regulation involves interaction, reinforcing, and colliding rule making and governance at the international, federal, [regional], and city/local community levels. It emerges from varied top-down, bottom-up, and negotiated processes within the state, among states, among [regions] and cities, and among economic and social interests” (Doern et al. 2006). Moreover, public utilities are diversifying their supply across sectors and countries in order to preserve and improve their market position and profit (e.g. Belgacom broadcasts TV programs and Suez-Electrabel is both an electricity and gas supplier). This turmoil is challenging the sectoral way in which market regulation has been organised in the post-liberalisation area (e.g. regulations of telecom enterprises involves sectoral regulations on communication services, media and ICT services).

In the European Union, regulation becomes increasingly complex, which has negative consequences that should be tackled. A lack of coordination, i.e. fragmentation and/or duplication, may cause opportunistic behaviour by the regulatees and additional administrative burdens for the operators and, as a result, considerable societal and economic costs. As well, an incoherent regulatory framework is supposed to reduce the effectiveness of regulation, market performance, and quality of services, and undermines the credibility of the regulators. On the other hand, competition between regulators could be supposed to improve the quality and innovativeness of regulation.
Hence, the project assesses the effectiveness and coherence of multilevel regulation in the utilities sectors. This consists in analyzing the impacts of the types of multilevel regulatory arrangements, in tems of vertical and horizontal specialisation and coordination, on the coherence and effectiveness of the regulation and the regulatees’ behaviour. (1) How is the regulation of public utilities organised inside the internal market? To what extent are the activities of regulators coordinated between themselves at different levels? (2) To what extent does a coordinated multilevel regulatory arrangement bring more effectiveness and coherence to the market regulation, compared to a more fragmented regulatory arrangement? How do regulatees make the most of regulatory fragmentation by employing strategic behaviour to improve market positions and profits? (3) How can the organisation and coordination of/within regulatory arrangements be improved in order to foster regulatory coherence, the quality of services, affordability and competition, and to prevent regulatees from behaving with opportunism?

Using the theories of regulation and coordination as a background, the REGUNET project will evaluate the impacts of multilevel regulation on the coherence, effectiveness of the regulation, and the regulatees’ behaviour in the Belgian telecommunications and energy sectors. The formal regulatory arrangements will first be described through a mapping of the actors and competencies at every level, and then confronted to the actual functioning of these arrangements. Additionally, their impacts on the quality of the regulation and the regulatees’ behaviour will be assessed with available data on market performance, an inquiry about the perceptions of regulatees, notably in terms of administrative burdens, and case studies about the strategies of the operators to penetrate or maintain their predominance on the market . Moreover, the REGUNET project will compare the institutional arrangements and their impacts with those in three other small European countries (the Netherlands, Ireland and Switzerland).

Theoretically, it contributes to the ongoing debate on regulatory competition versus regulatory cooperation. It combines an institutional and actor-centered method to study regulation in a more dynamic way (i.e. enterpreneurial institutionalism). Practically, the project will provide insights to tackle potentially negative consequences of multilevel regulation (e.g. incoherence) for the Belgian utilities sectors. It should contribute to the capacity-building of the regulatory authorities (e.g. BIPT) which are more and more involved in European arenas and networks.

Documentation :

La régulation à multi-niveaux des secteurs d'utilité publique: télécommunications et énergie en Belgique : synthèse    Bruxelles : Politique scientifique fédérale, 2011 (SP2380)
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Multilevel regulering van nutssectoren: energie en telecom in België : synthese    Brussel : Federaal Wetenschapsbeleid, 2011 (SP2381)
[To download

Multilevel regulation of utility sectors: energy and telecom in Belgium : summary    Brussels : Federal Science Policy, 2011 (SP2382)
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