We study the regulation of a firm which supplies a regulated service while also operating in a competitive, unregulated … (with price and quantity competition) and optimal regulation that involves an informational externality to the competitors …. Although joint conduct of the activities generates scope economies, it also entails private information, so that regulation is …

infrastructure quality. Analyzing a model with reduced-form demand, we first show that deregulating an integrated monopoly cannot … retail price and infrastructure quality relative to the integrated monopoly outcome increases welfare. Third, we argue that … ; deregulation ; investment incentives ; access charges ; regulation …