Price Structures, Cross-Subsidies, and Competition in Infrastructure

Private Sector Development Department ▪ Finance, Private Sector, and Infrastructure Network Governments often regulate not only the overall level of prices charged by infrastructure firms but also the relationship between prices for different services or customers. Thus, government-controlled telephone monopolies may keep prices low for local calls and charge more for long-distance calls. Power monopolies may keep prices low for residential customers by pushing up prices for businesses. And a postal monopoly may charge one rate for both rural and urban deliveries, even though rural deliveries cost it more.