FSR Transport
European University Institute, Robert Schuman Centre for Advanced Studies, Transport Area of the Florence School of Regulation
The Transport Area of the Florence School of Regulation (FSR Transport) at the European University Institute is dedicated to policy dialogue, policy-relevant research, training, and networking in the area of transport regulation in Europe. It is concerned with the regulation of all the transport modes and transport markets, including the relationships between them.
Phone: +39 055 4685 795
Address: Florence School of Regulation, Transport Area
European University Institute
via Boccaccio 121
50133 Firenze – Italy
Phone: +39 055 4685 795
Address: Florence School of Regulation, Transport Area
European University Institute
via Boccaccio 121
50133 Firenze – Italy
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The question becomes even more challenging when looking at infrastructure development in the different regions of the world. While most of the European countries have a long lasting story of national regulation and have then started to put considerable effort in harmonising their regulation at the EU level, outside of the EU, regulation of different network industries has followed different paths.
This Florence School special issue gathers contributions to the 4th Florence Conference on the Regulation of Infrastructures and aims at taking stock of the major challenges infrastructure regulation is currently facing all over the world, with a special focus also on emerging countries. Due to impossibility for many to participate in the Conference, papers that have not been presented at the Conference will also be considered for publication.
Areas of interest include, but are not limited to: 1) Issues relevant in the main infrastructure sectors, notably telecommunications, postal services, electricity, gas, railways, air transport, urban public transport, as well as water distribution and sanitation; 2) Issues that are tackled from various disciplinary approaches, notably engineering, economics, law and political science; interdisciplinary approaches are particularly encouraged; 3) Case studies that are linking an academic approach to practical relevance; policy relevant research papers are particularly welcomed; 4) We are especially looking for papers that link technology and institutions in developing and emerging countries.
Papers by FSR Transport
The road infrastructure was traditionally the central element in the planning and management process of road transport. The focus is changing, and the service and users are now at the very center of the management process. Policy makers, regulators, infrastructure managers and road operators can extract significant benefits from the digitalisation, but to reap those full benefits, it will be necessary to have a clear view on the path ahead.
This special issue of the Network Industries Quarterly (NIQ) presents a set of five papers, developed by Researchers of Instituto Superior Técnico – University of Lisbon (Portugal), that provide a holistic perspective over the challenges, impacts, and risks of digitalisation in the road sector.
Neves and Velez developed a paper on the expected impacts of autonomous vehicles on road infrastructures of old urban centers.
Baptista and Duarte look into the trends of vehicle electrification and its challenges for infrastructure.
Sousa and Meireles analyse digitalisation of road infrastructure from a risk management perspective, particularly the possibility of implementing of a holistic quantitative risk management approach, allowed by the growing digitalisation.
Trindade and Almeida offer an analysis of digitalisation on the value realisation from infrastructure assets in asset-intensive organisations
Finally, Moura looks into digital platforms, particularly Mobility as a Service approaches.
The de- and re-regulation of the different network industries is an on-going process at both the national and global levels. As this process unfolds, ever new phenomena emerge, necessitating a constant reassessment of the content and objectives of regulation.
Following the 7th Conference on Regulation of Infrastructures which took place on June 21 and 22, 2018 with a particular focus on the regulatory challenges facing network industries in the transport, telecoms, water and energy sectors, four papers were selected for this publication due to their topical relevance.
Frieden examines how Internet ventures operate as intermediaries serving both upstream sources of content and applications, as well as downstream consumers, and considers how governments can respond to the onset of price and quality of service discrimination within the Internet ecosystem.
Knieps looks at ICT innovations as the key drivers for a paradigm shift from traditional intramodal transportation markets to intermodal shared mobility markets. He identifies the changing necessities of regulations regarding market entry, public subsidies, and technical regulations, and presents the potentials of pilot projects, as well as the impact of shared mobility on congestion and pollution.
Rossotto et al. analyse the existing literature on digital platforms and distinguish four aspects, which policy makers should keep in mind, working on appropriate policy frameworks for digital platforms in emerging markets. These four aspects are: definition of multisided-platforms; emerging business models; technology and behavioral enablers; platform competitive dynamics.
Finally, Vanrykel, Ernst and Bourgeois look at the platform Share&Charge, and present its functioning and potential, before assessing the tax treatment of operations involved in the use of the platform.
Regulation for technology developments in artificial intelligence and robotics are commonly seen as one of the important yet structurally neglected fields regarding the human perspective on increasing automatization. This was highlighted in 2017 by the European Parliament report and a public consultation, indicating that a vast majority of citizens in Europe is regarding those developments as positive innovation fields but where further safeguards and regulations are needed, see the EP Resolution on Civil Law Rules on Robotics, 2015/2103(INL).
This issue is connected to an innovation workshop that took place on February 26 2018 at the Florence School of Regulation and directed at discussing the state of the art within the field of transportation, logistics and supply chain management. Furthermore, an evaluation regarding possible actions like regulation, agency- or industry-based approaches for establishing safeguards towards effective but risk-mitigating settings for this sector is aimed for.
Initial contributions collected here are directed at providing an interdisciplinary overview regarding the perspectives of industry and logistics actors, researchers in the economic, computer sciences, law and sociology domains as well as other interested parties from the field of political actors and associations. This shall enable the start of an open discussion what sorts of regulation are necessary in order to secure human trust and motivation in AI and robotics developments without placing too much of a burden to the economic development in the transportation, logistics and supply chain sector.
Utility companies play an important role in the realization of the Swiss energy transition, but are also facing numerous strategic challenges as a consequence of a rapidly changing playing field. The commitments necessary to transition towards a more sustainable energy system are not necessarily aligned with the current operations of local utility companies. For example, the lack of incentives for energy efficiency programs, market opening, smart grids and renewable energy has utilities looking for new business models.
This issue of Network Industries Quarterly (NIQ) is linked to the Certificate of Advanced Studies (CAS) in Governing Energy Transitions, a continuing education program organized by the Chair Management of Network Industries at the École Polytechnique Fédérale de Lausanne (EPFL). The program has a strong practical component, embedded in an academic framework of multi-level governance. Participants of the program were invited to contribute to this issue, sharing their insights on the strategic challenges of local utility companies in the Swiss energy transition.
The following are the themes included in this issue of NIQ:
• An overview of strategic responses of urban utility companies to the energy transition: comparing Swiss and German utilities.
• Implementation of a local demand-side management program in Switzerland.
• An international perspective on demand-side management programs, and policy-recommendations for a Swiss governance model.
• A broader identification of new business opportunities for utility companies, arising from the ongoing energy transition.
The unfolding of water regulation, however, reveals a wide and complex kaleidoscope of affairs, which involve different actors, dimensions and spatial scales. Surface and groundwater provides another set of challenges in discussing water regulation. More particularly, transboundary waters – within and between countries – impose, in addition to technical challenges, the need for diplomatic skills in the handling of their issue and the proposal of solutions.
This issue of Network Industries Quarterly (NIQ) is linked to the Public Policy and Water Regulation International Forum, which was organized by Tecnologico de Monterrey, the Water Center for Latin America and the Caribbean, and Cervecería Cuauhtémoc Moctezuma – Heineken México in May 2017. The Forum had an academic framework plus perspectives from practitioners working in the field of water regulation in Latin America. Other selected contributors were invited to complete this issue with its focus on the Americas. The papers on Canada and Texas are a reflection of this inclusion.
The following are the themes included in this issue of NIQ:
• Science, policy and management of groundwater in Canada;
• Groundwater regulation in Texas;
• Regulation of water and sanitation services in Latin America;
• Incorporation of natural infrastructure in water management in Latin America;
• The water guarantee fee in Mexico.
Following the 6th Conference on the Regulation of Infrastructures which took place on 16 June 2017 with a particular focus on the regulatory challenges facing smart cities in the transport, telecoms, water and energy sectors, four papers were selected for this publication due to their topical relevance. Olivera Cruz and Miranda Sarmento address the regulation and financing of smart cities through Public Private Partnerships (PPPs), and how that financing can be put to use to make infrastructure smarter as quickly as possible through an in-depth analysis of the various PPP models used to date, and possible improvements. Bock and Hosse present a digital model in development for the planning, tracking and analysis of passively generated mobility data for regulators. The model aims to facilitate the use of intelligently managed renewables by providing easy alternatives for the car to transport users. Marlot and Brunel look at Mobility as a Service (MaaS) and how regulation can incentivise consumers to choose shared mobility over the private car. Finally, Knieps provides an overview of the network economics of smart, sustainable cities, with a focus on the potentials for sharing activities and prosumage, as well as smart congestion management.
In this issue, we look into different aspects of the recent Turkish experience. In the first article, Özbuğday and Alma discuss distribution/retail unbundling in the Turkish electricity markets. The paper draws attention to the increasing issues of competition policy as a result of privatizations in the industry. The second article by Şenerdem and Akkemik brings forward a fundamental issue: the lack of data and the difficulty of constructing social accounting matrices. The authors introduce a social accounting matrix (SAM) with a special emphasis on electricity for the year of 2010. They put first steps forward of developing a general empirical perspective on the nature of electricity markets. The lack of reliable data has become a key issue in understanding the relative success of the reform efforts. Significantly, changes in efficiency are very hard to measure. These difficulties create opportunities for political interventions. The third paper by Oğuz and Göksal addresses recent policy shifts in the Turkish electricity markets. Focusing on the existing distribution tariffs, the paper emphasizes the need to improve the regulatory framework. In the last paper, Benli and Benli look into a major hurdle in the implementation of the regulatory reform; namely, how to deal with illegal use and electricity theft from a legal perspective. By applying the Coase theorem, they argue that electricity theft should be seen as a social problem rather than a contracting issue.
After World War II, ex-Yugoslavia was a unique example of self-management, and a specific system of governance and societal ownership of companies, including public utilities. In the early 1990s, Yugoslav disintegration and democratization coincided with economic transformation from a socialist market economy to a market economy. However, legacies of the past economic system are still present in some aspects, albeit in some countries more than others, and influence the process of liberalization of public utilities. This process was urged by joining the EU or is still urged by EU accession requirements. Most of the impetus for liberalization comes as a response to low investments in infrastructure, as most of these countries have reached high debt levels and therefore a private finance infrastructure seems to be a solution. The market liberalization agenda began to come to the front, and regulatory reform urged creation of independent regulatory agencies for state-wide public utilities such as electricity and gas markets. On the other side, municipal (communal) services are mainly provided by local authorities and public operators. Liberalization agenda in many of these countries presupposes privatization of public undertakings, contracting out or alternatives to privatization such as Public-Private Partnerships (PPPs) and concessions, with special attention given to the general legal framework for PPPs and concessions in these countries.
The following are some of the issues the country contributions have strived to address:
• The scope and characteristics of public undertakings providing utilities and the character of public utilities owned or regulated by local self-government units;
• PPPs and concessions as an “alternative” to full privatization: basic overview of active projects and reference to the legal and institutional framework for PPPs and concessions;
• Liberalization agenda and the main issues in regulating local public utilities (communal services);
• The character of regulatory powers and challenges posed to municipalities in regulating communal services.
Although all country contributions have a similar structure, the level of detail may differ, notably due to the existing level of development of the normative and institutional framework in a respective country and different experiences in private sector involvement. After presenting the institutional and normative setting, in the concluding remarks authors have identified the main pitfalls and prospects for change. Although differences exist, it seems that the volatile political situation in many countries of ex-Yugoslavia and the fragile political will to perform necessary reforms of public (including local) administration and public sector of the economy are the most important deficiencies.
Therefore, it is necessary to adjust legal and regulatory frameworks and create a stable economic environment. Local administration and business communities have to understand the concept of PPPs and private finance initiatives, while policymakers and local authorities must develop adequate plans and facilitatory structures for potential PPP projects, including capacities to initiate projects and perform cost-benefit analysis for the potential projects.
In this paper, Mr Jorge Aristóteles Sandoval Díaz, Governor of the State of Jalisco, describes the significant adjustments that his government implemented aiming at restructuring state finances and strengthening austerity measures in public spending in order to allocate the resources to prioritizing actions for the benefit of the citizens. In particular, he focuses on the local government’s commitment to give new impetus to investment in infrastructural projects thanks to the sectoral Program called “Movilidad Sustentable” (Sustainable Mobility). This Program looks at the interaction of the public transport with the other actors of mobility (pedestrians, cyclists and car drivers) and sets a model for reorganization and improvement. More concretely, the plan for the “Extension and Modernization of Light Rail Line 1 of Guadalajara” is part of this Program and serves as the case study that Mr Sandoval Díaz uses to explain the idea that public funding can be a trigger for economic development, as long as it is responsibly administered.
The four articles in this special issue of the Network Industries Quarterly confirm the multifaceted nature of this subject and open the floor for future reflections on the role of local utilities and regulation of LPS in Europe. Citroni, Lippi and Profeti highlight the political nature of local utilities. At the crossroad between public ownership and market environment, local utilities stand out as complex agents that are influenced but also able to affect local regulation. In this light Di Giulio and Galanti describe the ongoing regionalization of local public services in Italy. The other two contributions focus on two classical features concerning the regulation of these kinds of markets. Ida and Talit provide insights on the building of a market for bus and coach lines in Israel as a driver of efficiency. Sokołowski explores the potential of local utilities as agents of policy effectiveness in improving energy security.