The Competitive Order or Ordered Competition?: the ‘UK Model’ of Utility Regulation in Theory and Practice

This article contrasts the principles and prescriptions behind the UK model of utility regulation in the post–privatization period with its workings in actual practice, focusing in particular on the case of the telecommunications services industry as an exemplar of the broader picture. It diagnoses that the system has not evolved, as its primary architect (Littlechild) prescribed, into the rule – where feasible – of the competitive order in UK utility industries. Instead it has metamorphosed into a different system that Hayek termed ordered competition . The unintended consequences of this miscegenation are then evaluated. The conclusion is that a fundamental policy choice remains to be made as to the basic form of the system in the future: whether it should continue as a system of ordered competition as now, or whether it should become a regime characterized by open and effective competition (where feasible) as envisioned by Littlechild originally.