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© 1995 Oxford University Press

research-article

Price Cap Policies in the Transition from Monopoly to Competitive Markets1

SANFORD V. BERG and R. DEAN FOREMAN

(College of Business Administration, University of Florida, Public Utility Research Center Box 117140, Gainesville, FL 32611–7140, USA)

Abstract

Price cap regulation is replacing traditional rate of return regulation in a number of jurisdictions. This development can be viewed as a regulatory mechanism facilitating the transition from monopoly to competitive markets. However, multiple goals cannot be achieved via a single instrument. Pure price caps have been modified to better meet the mix of regulatory objectives. These modifications further constrain incumbent telcos.


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