Can the regulators hold them? (high profits at newly privatized British companies creates doubt in government regulators)

Economist (US), The, June, 1991

BIG profits mean bad regulation. Or so you would think from the outcry that greeted British Telecom's announcement that its profits in 1990-91 were [British Pound] 3.1 billion ($5.7 billion). A quick calculation by the tabloids came up with [British Pound]97 a second, which sounded a suitable shocker. The complaints have grown louder as British Gas and some of the water companies have also unveiled fatter profits this week, despite the recession. Tory backbenchers have joined Labour in demanding that something be done. So how well, after seven years, is Britain's new regulatory regime working?

Much of the current uproar is due to a simple confusion between big-which the monopolies' profits certainly are-and too big. BT is Britain's biggest, most valuable and...

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