Annual Forum Papers

Economic regulation of network industries

  • Year: 2008
  • Author(s): Cornel Van Basten
  • Countries and Regions: South Africa

South Africa is in its infancy regarding independent economic regulation of network utilities. Although economic regulation of public utilities have been exercised in South Africa for a number of years (usually by the line Government Department), the establishment of independent economic regulation had only emerged a little more than ten years ago.
Changes are already occurring in the regulatory scene with more independent regulatory entities developing, e.g. moving away from an electricity regulator to an independent energy regulator, the development of a ports regulator and changes in the regulation of telecommunications. There has been a move to more convergence for certain sectors. Overall, regulators have however developed pretty much in silos.
The purpose of this paper is to re-establish the rationale and principles of sound economic regulation of network industries and to highlight the importance of some principles, for example political independence. It will also provide a brief overview of the differences in terms of regulatory principles among current economic regulators in South Africa.