International Handbook of Network Industries
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International Handbook of Network Industries

The Liberalization of Infrastructure

Edited by Matthias Finger and Rolf W. Künneke

This extensive, state-of-the-art Handbook provides a comprehensive overview of the various experiences of liberalization across different sectors, regions and disciplines.
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Chapter 4: From ‘Service Public’ to Universal Service: The Case of the European Union

Matthias Finger and Dominique Finon


Matthias Finger and Dominique Finon INTRODUCTION This chapter addresses the question of public services in and of the network industries. This is a complex topic at the crossroads of political and economic issues. Indeed, before liberalization, enterprises in the different infrastructure sectors were often equated with a ‘public service’. Consequently, the very idea of public service is questioned by infrastructure liberalization. To recall, public services, prior to liberalization, were provided in most of the countries by publicly owned enterprises, themselves the result of public policies. Examples are Post, Telegraph and Telephone Administration (PTT) for postal and telecommunications services, electricity and gas operators, railway companies, water utilities and many others more. Public service in these sectors and for these enterprises meant a combination of objectives, ranging from guaranteeing security of supply, contributing to national and social cohesion by equal treatment of citizens, pursuing industrial policy and recently ensuring environmental protection and many others. Also, from an economic perspective these public enterprises were justified by their character as natural monopolies, by the very nature of their activities, combined with the fact that they provided public and other socially useful goods along with social equity. It was possible for these public enterprises – often also called public utilities – to provide such public services because they were not competing with one another or with private companies, as they were enjoying monopoly protection. Of course, the definition of a public service also varied from country to country, but it generally included services whose cost could not...

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