Aims of the framework

The aim is to create a new public utility. It will combine the established principles of existing utilities while recognising the unique capabilities and potential for abuse of online markets. The legislation should spell out aims and constraints, not tell the winning consortia what to build. Legilsation that created widespread use of catalytic converters in cars is instructive: it spelled out the problem and what facilities were available, but not how to solve it.

Specific objectives when designing a framework for NEMs

• Extract maximum benefit for users and the wider economy from the envisioned system
• Ensure an attractive commercial opportunity to attract bidding consortia
• Engender stability, predictability, utmost user protection and high performance
• Create protection for individuals who wish to not have a relationship with the proposed system and firms who plan to compete against it
• Contain the powers of the system while mandating levels of transparency that should enable only “light touch” regulation
• Shape conditions for launching the markets and ensuring no stumbling blocks towards growing as far as demand for its services can go
• Ensure there is no controlling powerbase at the heart of the system
• Frame an accountable tender process that confers long term legitimacy on the winning consortium of operators
• There is to be minimal risk in the core system. Risk of transaction failure can be turned into opportunity through insurance or factoring markets but that risk is sold to users. The system must always hold the cash required to discharge all its obligations immediately.

Multiple groups need to be protected in a framework. They include non-users and those who may choose to compete against the new system. As a snapshot, the boundaries stipulated in the framework might look like this:

•  Framework details