Public Policy & Regulation Services

Our expert economists assist government agencies, regulators, and companies that are affected by proposed regulations around market failures in industrial sectors that tend towards natural monopolies.

These sectors can include network utilities, major hub airports, and the access networks of incumbent telecommunications networks, for example.

In our work, AlixPartners rigorously analyzes the relevant markets and evaluates the likely effects of regulatory intervention. This intervention typically involves balancing value for money received by current consumers with incentivizing investment in the sector for the benefit of future consumers. Our economic regulation experts have worked in numerous industries and are well placed to analyze the specifics of individual sectors and advise on how regulatory regimes and market interventions can be structured to achieve objectives.

Case studies

Airlines v Heathrow

We acted as economic experts for three major airlines in their appeal against proposed charges at Heathrow Airport for the forthcoming five-year regulatory period. Our work consisted of preparing rigorously argued expert reports focusing on the cost of capital for investment in Heathrow.
We supported analysis by the regulator (the CAA) against claims made by Heathrow and also introduced our own analysis of where we believed the CAA had erred in the elements of the cost of equity and debt. We also countered claims made by Heathrow Airport Limited that its Regulated Asset Base (“RAB”) should be marked up to recover losses made during the Covid-19 period.
The CMA rejected all of Heathrow’s claims in respect of the cost of capital and also accepted our analysis in respect of the cost of indexed linked debt. The CMA also rejected Heathrow’s claim for a RAB markup.

Airlines v Heathrow

Mobile operators in the UK had developed a new form of retail offering in which customers entered into two separate linked contracts, one in which they purchase an airtime tariff and another in which they finance the cost of a mobile handset through a consumer credit agreement.
Ofcom, the UK communications regulator, was concerned that the form of the offering deterred customers from switching, preventing them from obtaining the best airtime deal, and proposed to restrict the linked contracts that mobile operators could offer.
Acting on behalf of O2, we showed that Ofcom’s concerns were not plausible because its theory of harm did not consider appropriately how operators compete or how consumers behave. We also explained how Ofcom’s proposed form of intervention would lead to harm to consumers. In its final decision, Ofcom changed the proposed regulation, removing the specific restrictions that it had proposed.

O2

British Telecommunications v Ofcom

We were retained as an economic expert for Vodafone, Verizon UK, and Virgin Media in support of their intervention in BT’s appeal to the Competition Appeal Tribunal of an Ofcom decision concerning breach of cost orientation rules.

British Telecommunications v Ofcom

Insights

Meet the team

AlixPartners’ professionals work closely with several Academic Affiliates who bring deep subject matter expertise in niche areas of economics, financial accounting, and corporate governance. Learn more about our Academic Affiliates.

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