Posted by: Costas Troulos | July 9, 2008

NGANs: Regulation to Avoid another Tragedy of the Commons

A couple of weeks ago I received a call from a civil constructor asking assistance and opinion. He was installing new water pipes along a city district and to his surprise he came across a street where installation was impossible. The reason was that throughout the entire width of the street various fiber networks have already been installed.

This is probably much more serious than it looks at first hand. If there are streets already so congested that no other dug infrastructures can be installed think of what we are about to face in the next few years! Facilities-based competition may be a good thing for many but we may really want to handle the streets as a common good. In this respect, since street capacity for underground infrastructures is limited certain principles, rules and regulation have to be applied. Regulation is required to provide incentives for investments, promote competing firms collaboration and discourage free riders. If not we may soon experience a depletion of a common good (the street’s underground capacity) or as put in literature another tragedy of the commons [1], [2].


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