45126-Invest. Qual-No111

Investment in Qualityoutweigh any problems identified above and the Council welcomesongoing development of the multi-utility approach.This raises the question of the appropriate institutions to regulateand co-ordinate wide-ranging developments. The paper Governanceand Accountability considered the possibility of a single regulatoryauthority to cover all sectors, but concluded that a sectoral approachwas more appropriate. The sectors and regulators are definedbroadly, so as to exploit linkages, such as between gas andelectricity or post and telecommunications. Given this approach,and bearing in mind not only the linkages between sectors but thebenefits of shared regulatory experience among the limited pool ofhuman capital, the Council emphasises the importance of crosssectoral co-operation between regulatory bodies and also with thoseorganisations who may have potential demand for the infrastructurewhich is provided (e.g. IDA Ireland). The Council welcomesongoing development of the multi-utility approach, whether throughformal integration and amalgamation of firms and regulatory bodiesor through greater co-ordination between sectors.The Council also broadly welcomes the enactment of theCompetition Act 2002, and the increased powers granted to theCompetition Authority along with a more co-ordinated remit inconjunction with the sectoral regulators. It is clear that whilecompetition powers are key to the delivery of effective competition,the Act also recognises that competition in its purest sense may notalways result in the best form of service delivery and recognises therole controlled competition and regulation has to play.Virtual CompetitionA key component of competitive pressure in small and highlyconcentrated markets can come through the operation of “virtual”competition, as seen in the regulatory contract between the principal(regulator) and the agent (regulated firm). Often such an approach,which is really one of re-regulation as opposed to de-regulation orliberalisation, can deliver greater benefits to consumers in both theshort and long term than one where the market is artificially tilted toensure competition develops.518