Introduction The two most difficult issues in imposing a public service obligation on a providers of a service of general economic interest is, first, the correct definition of the obligation and, second, the correct calculation of the amount of compensation that covers only the net extra cost of the service. The correct definition must take into account what the market already provides, if any. This requires a prior analysis of actual market conditions. By contrast, the correct calculation must hypothesise what the provider would do without the compensation. If the obligation is imposed for the first time, then the counterfactual scenario is observable. It is what the market already does. However, if the obligation has been imposed for a long period of time on an incumbent market

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