London Underground PPP Arbiter notice (13 pages, PDF) of its timetable for giving guidance on what Tube Lines' allowed revenues for 2010-2017 would be if existing obligations were not changed. A consultation on draft guidance is due by Friday 15 August 2008.

CAA submission (349 pages, PDF) to the Competition Commission accompanying its reference of the price control arrangements for BAA's Stansted airport. The Competition Commission has set-up an inquiry web page and invited (2 pages, PDF) initial responses by Tuesday 13 May 2008.

European Court of Justice judgment (about 24 pages) on EC law aspects of a dispute about the basis for local loop price controls in Germany.

The court found, in line with the Advocate General opinion, that the concept of cost-orientation did not mean much on its own:

56. It is apparent from the above that, generally, Community law lays down, in various areas of the telecommunications sector, the principle of cost-orientation of rates or prices without specifying what that means in each of the areas concerned (interconnection, voice telephony or the local loop).

57. In those circumstances, to define the principle that rates for unbundled access to the local loop are to be set on the basis of cost-orientation, account must be taken not only of the wording of that principle but also of its context and the objectives pursued by the legislation laying down that principle.

The court rejected both Germany's arguments in favour of the systematic use of replacement (current) costs and Arcor's arguments in favour of the systematic use of actual (historic) costs, holding instead that it was for the national regulator to determine its approach in the light of the competitive situation in each market and the relevant policy objectives. There was no EC law objection to the use of cost modelling methods to estimate such costs.

PPP Arbiter notice (5 pages, PDF) that London Underground has asked for a "best estimate" of Tube Lines' allowed revenues for 2010-2017 based on existing obligations. London Underground wishes to use this estimate in order to determine what additional outputs it could afford to ask for as part of the periodic review process in 2009.

Competition Commission notices of changes to the price control systems for First's bus services in Glasgow and Edinburgh, following the February 2008 consultation.

Ofgem consultation (116 pages, PDF and 77 pages, PDF) on the review of electricity distribution price controls from 2010. Responses by Monday 23 June 2008.

Ofwat consultation (about 6 pages) on proposals to "refocus" the overall performance assessment (OPA) “away from those aspects of service where standards and other enforcement tools are available or appropriate” so that it “focuses on the qualitative aspects of service that is the consumer experience”.

This would tend to decouple OPA incentives from capital expenditure incentives (which are to be mainly governed by a menu scheme put forward by Ofwat — see sections 4.2 and 6.1.2 of Ofwat's March 2008 paper). Ofwat acknowledges a “need to look further at the balance between the operating expenditure rolling incentives and a refocused OPA”.

NAO value for money study (67 pages, PDF) on the removal of retail price controls in electricity, gas, telecommunications and some postal services.

Ofwat statement (70 pages, PDF) on its approach and information requirements for the review of water and sewerage charges in England and Wales from April 2010. Draft business plans are due on Monday 11 August 2008.

Report (175 pages, PDF, including evidence and transcripts) of the transport committee of the lower house of the UK parliament from an inquiry into BAA plc.

The report endorses a break-up of BAA, seemingly asserting that the London airports if under separate ownership would be subject to effective competition and would not need to be price-controlled. It also recommends removing the automatic reference to the Competition Commission as part of any price control review process that remains.

According to the report (in response to easyJet's complaints about excessive charges allowed by CAA, and claims that each of Heathrow, Gatwick and Stansted on its own would still be a monopoly):

83. We agree that breaking up BAA's monopoly would not remove the need for effective regulation. What it would remove though — through the removal of substantial market power — would be the need for the kind of economic regulation in the form of price controls.

Much of the report was only agreed by a majority of the committee that included the chairman Gwyneth Dunwoody MP (Lab), with the minority apparently led by David Wilshire MP (Con). Statements that were only retained in the report after a majority vote include at paragraph 47:

The comparison of the regulation of BAA to an antitrust regime lends further weight to our view that BAA’s market position is fundamentally anti-competitive.

(The comparison referred to is a remark by the Competition Commission that large financial incentives for quality of service might be explained by analogy with the large fines considered necessary for competition law infringements.)

Comment. Loud-mouthed claims, but not a lot to back them up. Some of the report is just stuff and nonsense — e.g. the "fundamentally anti-competitive" claim quoted above. And look at the wild claim at paragraph 80 that “Any airport that were sold off [as part of a BAA break-up] would not be price-controlled, as it would [sic] be in a position of market power, and thus would be free to compete on price.” Leaving aside the typo (missing "not" in the sentence about market power), do they really mean any airport? Not much is left of the credibility of the report after that sort of statement. Franck

Civil Aviation Authority decision (311 pages, PDF) on price controls for Ferrovial (BAA)'s Heathrow and Gatwick airports from 1 April 2008 until 31 March 2013.

The figures for cost of capital and expenditure trends follow the Competition Commission's report. Several other decisions appear close to the CAA's November 2007 proposals; however, there is a marked overall increase in the price limits, which the CAA attributes to additional investment and security expenditure, and the recovery of development costs for possible further Heathrow expansion.

Comment: Arithmetic and geometric mean returns | viewpoint: Franck addresses a cost of capital issue arising from the CAA's decision.

Ofgem consultation (several files) on draft requirements for reports on costs, revenues and quality of service to be produced annually by gas distribution companies in Great Britain. The purpose of the returns is to inform decisions on price controls. Responses by Friday 4 April 2008.

Ofgem announcement (2 pages, PDF) of a two-year review of the price control regime for energy networks.

Ofgem says that:

Companies and capital markets can assume that, because the review will not report until 2010, work for the next price controls for electricity distribution – due to come into play in 2009 – will not be affected. And the framework for those price controls will be published shortly.

More information on the review is available as a speech (19 pages, PDF) and presentation (31 slides, PDF). This highlights a large number of potential problems and suggestions that have been made (including a comment that the merger tax "needs a review").