Community Regulation of Public Utility Services in the EU

Special Report: Deregulation, State of Affairs
Toward a Theory on Regulated Franchising
By Stéphane Rodrigues

Two years after the adoption of the Amsterdam Treaty and the introduction of a new article in the EC Treaty (article 16 on services of general economic interest), the paper assesses the emerging Community framework regarding network public utility services (energy, postal services, telecommunications, transport).
Community legislation making was all the more difficult since the notion of public service differed from one EU country to another (compare e.g. Germany, Spain, France, and the United Kingdom). Nevertheless, the EU institutions have developped several concepts (article 73EC: public services; article 86EC: services affected with a general economic interest; public and universal service obligations) dealing with economic activities affecting the general interest and/or organised by public authorities. These innovations have had two main consequences: (i) EU member states were forced to reevaluate their relations with public utility operators (and, in particular, the new legal framework has favored the creation of independant regulatory commissions); and (ii) utility industries enjoy more sophisticated rules, which provide in particular for the regulation of competition and for the sustainable funding of those industries.
Thus national and EU laws are converging and complement each other in the search for the proper balance between the free trade and competition rules of the single market and the general interest concerns that affect public utility services (now acknowledged as an element of the European social model).

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