Using competition to support innovation

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The use of competition should be enhanced as the most reliable means of supporting innovation, particularly where there is rapid technological change:

  • Regulators should focus ‘standard’ periodic price controls on the maintenance of existing networks and marginal enhancements
  • Ofcom should continue to promote infrastructure competition for fibre and mobile networks
  • Government should introduce legislation, ahead of the next price controls, to remove any barriers to the use of competition in the provision of strategic enhancements to water and energy networks
  • For future price controls, Ofwat and Ofgem should separate consideration of strategic enhancements from the ‘standard’ periodic price control. Ofwat and Ofgem should develop tendering processes for strategic enhancements, with a clear, public justification required where tendering is not used
  • Government should ensure that regulators have the resources they need to carry out competitive tenders for transformational investments.

 

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