My last post, mentioning the plans to sell off our forests, set me thinking about the other things that have been sold off in our time by people that had no right to do so.
I’ve already set out my views on ownership of essential utilities and public services. People of other political viewpoints will disagree, saying that the public sector stagnates things, causes inefficiencies, and that competition is good for the market.
That last point is what I’d like to explore a bit further.
First I’ll pick on an industry I know well as a professional user: Telecoms. Back in the old days, we had the GPO, then it became British Telecom and then BT. It’s true that there is competition of sorts for BT: LLU means that you can now buy telephone and broadband service from numerous suppliers that use the BT infrastructure, and in some areas, there’s the likes of Kingston or Virgin Media. If you’re a business, you have the option of using one of many suppliers to connect up your offices, but if any of your offices are outside of Hull or a Virgin Media cabled area, you’ll at some point be giving money to BT: BT Wholesale sell use of the copper or fibre and BT Exchange to your supplier, and they then provide services over it, because no-one but BT can afford to provide truly national infrastructure, because the British Taxpayer already paid for it for BT: all the ducts, exchanges, street cabinets.
I won’t go into the nightmare of fixing faults that may be a problem with the BT-owned line or exchange, or something deep in the network of one of your suppliers partners, or the horrors of Carrier pre-selection going wrong (but trust me, it can and will): suffice to say that the great model we have now increases complexity and doesn’t provide a level playing field for competition, but it did ensure that the taxpayer gave one company a huge leg-up.
I’m not wholly against the competition and free market: It is a good thing that Virgin Media exist, and despite their woeful customer service they provide a good service technically, especially where they own the infrastructure from end-to-end. What I’m against is the taking of things that have been built up with public money, and selling them to private enterprise. This is nicely illustrated by an anecdote from Stuart Maconie in one of his books, who was filming with Tony Benn in the BT tower. The BT PR chap kept trying to get Tony to call it the BT tower, rather than the GPO Tower it was opened by him as, and the response was:
It’s not yours. It was paid for by the British taxpayer, and given to you by Margaret Thatcher, and it wasn’t hers to give.
We can see a similar thing with public transport and electricity or gas: The investment was there after nationalisation, then sold off, and broken up: with trains and utilities we see one company owning the wires or rails, and another selling it to you.
Buses, around here, are dominated by NXWM, which has it’s roots in WMPTE, and the other operators get squeezed out. The model of operating buses at a profit is propped up by a subsidy from local government, which is now being cut, while NXWM push up the prices and run only the profitable services, aided by the public purse paying for pensioners, and subsidising new buses. Is this the free market, and genuine competition, or a broken halfway house intended to line a few pockets?
it is interesting you pick on the complexities of the telco market and the so called competition markets, much (but not all) of the chaos is the result of government legislation and ofcom,
The one example that really gets my goat is the we equality of access is managed
Yes give all the retail telco the same access to the open reach infrastructure, but same telcos dont get access to kingston or virgin infrastructure
Then as BT retail is part of the same holding group as BT Openreach they are not allowed to subsides the cost of a line install /re connect, yet talk talk can, you can get a new talk talk line in a property for £26 setup, yet BT have to charge the full £130
There is also something in the regs that BT cant sell mega cheap broadband bundles like sky and talk talk do, which is why BT brought plusnet.
but at least we are not in the USA, where a call to the nearby pizza shop on a mobile may be chargeble , but a call 4000 miles across country may be free as the end point uses the same telco, even if mobile to pstn, and lets not debate the charging for incoming call to mobiles, so they have a flat rate for all outgoing calls
Interesting. I was concentrating on the advantages BT had, not knowing some of the disadvantages. It’s all ridiculous, not a level playing field, and over-complicated.
I suppose giving access to openreach is to counter the fact that BT had all the openreach infrastructure, where VM have had to build it. Regardless of your political views, it’s certainly not a fair, even, market-led situation, and never could have been, given that the GPO pre-existed.
The USA, of course, has always had the competition. I fail to see how the circumstances you mention are good for the customer.