Competition law constraints on access charges in the England and Wales water industry

Water industry regulation in the UK does not require a network owner to grant access to third parties. The regulator instead enforces common carriage on network owners through the application of the Competition Act 1998. This legislation, however, enables the regulator, the Director General of Water Services, to require only dominant companies to grant access; and gives the regulator no ex ante powers. The DGWS can intervene only when a dominant network owner has failed to grant access, and only in relation to aspects of the network that are essential facilities. The regulator will require access in these circumstances to be given on a non-discriminatory basis, at a price that is not excessive. Long run average incremental cost based prices will not be excessive. Prices calculated by reference to fully allocated cost or the efficient component pricing rule may on occasion be excessive. © 2003 Elsevier Science Ltd. All rights reserved.