Discussion Papers

Marcus Weinkopf, Werner Neu

Zur Regulierung des Finanzausgleichs zwischen Monopol- und Wettbewerbsdiensten nach § 37 (4) Postverfassungsgesetz
Nr. 64 / April 1991


The analysis of motives for financial transfers within and between the enterprises of the Deutsche Bundespost (DBP) leads to the conclusion that aggregate data on the profitability of monopoly services respectively non-reserved services cannot be the appropriate basis for an evaluation of these transfers' effects on competition in the non-reserved markets. In order to ensure compliance with the intent of § 37(4) of the Postal and Telecommunications Constitution Act stipulating that competing suppliers of non-reserved services be not harmed by undue cross-subsidization, the regulator has to evaluate data at the particular market level.

The entrepreneurial flexibility of the DBP enterprises intended by the Act requires a differentiated regulatory approach to problems related to financial transfers. It is to ensure compliance with the competition rules without at the same time preventing acceptable transfers from occurring, e.g. to offset temporary losses of new services. According to our results, these requirements can best be met by a flexible regulatory approach which does not focus on formal restrictions on the DBP enterprises' behavior. In particular, our approach would not require a sophisticated cost accounting system which ensures that pricing policies in the non-reserved area are in each case justified by cost coverage. On the other hand, the regulator should be endowed with comprehensive rights for information and intervention in those cases where he suspects that the DBP enterprises are violating the principles of fair competition. This approach would in many ways be similar to the one chosen in the UK for the regulation of British Telecom.

The degree to which the goal of fair competition in the non-reserved markets can be attained in accordance with § 37(4) will be highly dependent on how essential elements of the overall regulatory framework are going to be shaped. This concerns in particular the regulation of monopoly services and the stipulation of public service obligations in the area of non-reserved services. In the context of this study, they are considered as given.

According to the regulatory approach favoured in this study, there is no urgent need for fundamental regulatory interventions into the enterprises' cost accounting. Particular data requirements of the regulator could be fulfilled in the form of separate computations on a case by case basis.

[Only German language version available.]

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