A review copy of this case is available free of charge to educators and trainers. Please
create an account
or sign in
to gain access to this material.
Permission to Reprint
Each purchase of this product entitles the buyer to one digital file and use.
If you intend to distribute, teach, or share this item, you must purchase
permission for each individual who will be given access.
Learn more about
purchasing permission to reprint.
Abstract: This case, designed to be used either together with The British Water Industry (B): Glas Cymru and the Debate over Nonprofits (1810.0) or separately, describes the controversies in the British water industry in 2002, 13 years after it was privatized. The (A) case (revised January 2006) focuses on the industry's experience with price-cap regulation, the system of controlling monopoly that the British applied to all the utilities they privatized in the 1980s and 1990s. The case is intended to support a discussion of the difficulties of regulating of monopolies and the advantages and disadvantages of the price-cap approach. The (B) case focuses on the controversy over the conversion of a major for-profit water company into a nonprofit water company and is designed to support a discussion of the merits of for-profit and nonprofit firms and the optimal capital structure of for-profit firms. The two cases are linked together in that some observers blame difficulties in utility regulation for generating interest in nonprofit utilities.
Learning Objective: The case is intended to support a discussion of the difficulties of regulating of monopolies and the advantages and disadvantages of the price-cap approach.