Viable or Vulnerable? Competition and Social Obligations for Regulated Industries

This report is part of a multiphase Regulatory Reform Program. It presents a decision-making guide to help in the public policy review of social obligations that have been traditionally imposed upon economically regulated industries.

Document Highlights

Without a review of economic regulations, the social obligation goals of accessibility, reliability and affordability are vulnerable. These social obligations can create a burden of significant costs and inefficiencies for the regulated industries, their customers and the economy as whole. The costs and inefficiencies also create strong incentives for customers, particularly high-volume and high-value customers, to seek ways to bypass the regulated firm. Without high-volume and high-value customers, the regulated industries cannot sustain social obligation objectives. However, these objectives can be viable if the economic distortions associated with their costs and administration are minimized.