Publications

	Table of Contents
p. 32 of 62 BACK | NEXT Purpose and Structure of the Toolkit Overview of Practices Controlled by Competition Law Countries with Competition Law Systems Benefits of Competition Policy Practices Controlled by Competition Law Key Concepts and Tools Competition, Privatization, and Regulation OECD's Work in Utility Industries Work of the ICN Structural Separation in Regulated Industries Ex Ante Regulation and Competition When Competition Law Replaces Ex Ante Regulation Sector-Specific Regulator or Competition Authority? Essential Facilities Doctrine and Interconnection Problems Non-commercial Service Obligations Banking and Finance Emerging Economies Enforcement Mechanisms ADB Resources and Projects Other Resources Glossary and List of Abbreviations

Competition Law Toolkit : Competition, Privatization, and Regulation

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H. Non-Commercial Service Obligations

An issue of some complexity is that some entities are subject to non-commercial service obligations, whereby they are required to provide services that may not be commercial. An example of this is when a postal service operator is required to deliver letters at a uniform price and on a daily basis to all addresses, irrespective of actual cost or location. It is easy to understand that it may be much more expensive to deliver letters to remote addresses than to addresses in densely-populated cities; but equally understandable that such a service obligation may add to social cohesion in a particular country. Many other examples could be given in relation to the provision of water, electricity, and gas; or the need for cheap transport connections to remote communities. Non-commercial service obligations give rise to many issues: do they necessarily justify the grant of legal monopolies to the service providers? Is it possible that they could in fact be profit-making so that no subsidy or special treatment is necessary? To what extent does the nature of the obligation have implications for the potential for competition? These and many related issues are discussed in the OECD Roundtable, Non-commercial Service Obligations and Liberalisation (2004) [ PDF ].

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