Thursday, May 04, 2006

National and ACT show some principle

Omigod! I'm astounded. Following Rodney Hide's excellent condemnation of the announcement to let anyone and everyone have access to Telecom's local line network, I listened online to Maurice Williamson doing the very same on Morning Report. Well done Maurice, making some of the points I have already made. PC has done a good summary of Telecom's share drop, 10% of value in a day and his updated post of much of the commentary.
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Other responses are:
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NZ First naturally supports it, as Winston has been one of the biggest Telecom-bashers in recent years, courting the "we paid for it" populist vote. Again Winston thinks "The Government must also ensure that this does not only deliver benefits to big city New Zealand, but that those same services reach all the way down to the country roads" so he wants you to subsidise farmer access to broadband - that isn't cheap, since the Kiwishare has forced Telecom to subsidise farmer access to local lines for ages from the line rentals of city businesses and residents.
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Greens support it - as any chance to bash Telecom is welcome, although Nandor even said "Current prices aren’t bad" great chance to regulate then. Nandor reckons it will allow virtually free international calling. Well that hasn't happened anywhere, and in many countries it is due to loony protectionist governments maintained statutory telecommunications monopolies - you know, the sort that the left defended until Telecom was privatised.
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Local Government New Zealand, representing 86 organisations specialising in thieving from the public (local government) supports the move. It thinks rural communities will benefit, which is astounding.
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The Alliance retards foaming at the mouth are clamouring "it's not enough", wanting the government to renationalise Telecom and then service will be cheap and high quality - hmm like it was for decades under the Post Office. Keep taking the medicine guys.
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TelstraClear's CEO is sitting thrilled that lobbying government has increased his company's value far more effectively than investing in infrastructure or winning customers over with better service and lower prices (which anyone who has been a user of Telstra Clear's local Wellington service in recent years will note has been declining significantly). Remember before LLU was seriously on the agenda, Telstra Clear was going to build a brand new local access network for all of residential metropolitan Auckland, Hamilton, Tauranga and Dunedin, and expand the Wellington network to Porirua. Cheaper to lobby to use other people's infrastructure than to build your own of course.
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Russell Brown is thrilled because he believes Telecom is ripping him off, and believes attaching equipment to Telecom's exchanges under LLU is high quality "investment" in telecommunications - but then we always knew he was a leftie :)
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IHUG, like other competitors says the handbrake is off - although it has provided a competitive satellite based and wireless based broadband service for some years. Again, no need to invest further in your own infrastructure.
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Business New Zealand is wary, and is taking a wait and see approach.
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Business Roundtable is damning of LLU, and makes the cogent point that the argument that "everyone else does it" is the same argument that other lobbies, like farming, once said about subsidies and protectionism. A great quote from the press release is:
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“Measures like forced unbundling have been described as infrastructure socialism (“what’s yours is mine”, by government decree). By allowing competitors access to incumbents’ networks on non-commercial terms, the short-term competition they create is parasitical, not the dynamic competition we need from incentives to invest in new and enhanced infrastructure."
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You see, those supporting LLU seem to be doing so for three differing reasons:
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1. It is expected to deliver faster, cheaper broadband services because Telecom is refusing to provide those services, or resale the ability to provide those services to competitors (this I believe is the David Farrar reason);
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2. Everyone else does it, so we should too (the sheeple reason);
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3. Telecom are bastards who have been "ripping us off for years", capitalist scum, "we paid for it", put the boot in, rah rah rah keep the red flag flying (the Greens and I suspect the reason at least a good third of the public will support it).
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The second argument is fatuous, if we took that approach, telecommunications in New Zealand would have been a regulated monopoly or duopoly until the late 1990s. Australia opened up its market in 1997, most of western Europe between 1998 and 2000, New Zealand in 1989. NZ has a completely open postal market, almost every other country (Sweden, Finland, Argentina and the UK excepted) grants a statutory monopoly to its state owned (and relatively inefficient) postal operator.
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The third argument is facile - Telecom was sold by the elected government of the day (Helen Clark and Michael Cullen were Cabinet Ministers at the time), and the proceeds were used to pay off debt "that you borrowed" or to avoid borrowing more for services "that you wanted". You don't own Telecom unless you buy shares in it - get over it.
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So what about the first? Is Telecom not providing faster broadband because there is insufficient demand? Is it not providing cheaper broadband because it is unprofitable? Are competitors not investing in infrastructure because the clear message from government is that Telecom's will be there to use instead? Has Telecom been acting anti-competitively and if so, why have no competitors taken it to court under the strengthened heavy handed Commerce Act?
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When I was in telecommunications policy, one of the clearest messages was that setting up a regulator (which did not exist until 2000/2001) would change incentives in the industry from focusing energy on investment, innovation and commercial negotiation to lobbying and counterlobbying, with the regulator NEVER ever pleasing everyone. Lobbying is cheaper than investing in infrastructure - you just need to have half a dozen well paid suits willing to bang on at politicians, bureaucrats and the media about how hard done by your company is, and how mean old Telecom is ripping everyone off - but your company is the paragon of altruism and will save the day.
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That has simply been proven right.

9 comments:

Anonymous said...

Telecom are bastards who have been "ripping us off for years"

And the problem with this is...? They are ripping people off. Not me, because I'm smart enough to use another supplier, but all the people too stupid and lazy to change to a service that puts in more than the bare minimum of effort to provide the sevices it claims to. Their 'faster, cheaper broadband' is a joke. If they're not going to get their act together off their own backs, why the hell shoudln't they be made to? They're holding back telecommunications for all of us.

libertyscott said...

Well, good for you then. You provided the answer yourself - Telecom shouldn't be forced when people like yourself change voluntarily to a supplier that better provides what you want.

Clearly more people are content enough with what Telecom supplies. It is like anything - if people don't like the supermarket, doctor, service station or radio station they use, they have to change. The main point is that the market allows there to be competitors.

CD said...

Good to know it's not just me who has noticed the declining service of Telstra.

A few years ago there was rarely a downage, now it seems a more and more common occurance.

Rick said...

What do you mean "omg"?!

Who do you think the libertarian leader is in this country? Of course Rodney Hide's kicking tail.

libertyscott said...

CD - I had a week without two lines, then Telstra Clear fixed them, and swapped the numbers around - then I lost one of the lines again, and after 3 weeks finally got service back. I had to fight for refunds and servicemen didn't turn up on day I took off work - and then I was told there was nothing in the system about it, and I had it wrong. The contrast with Saturn was enormous, Saturn was always helpful.

Rick - omg was in reference to Maurice Williamson, I expect Rodney to come out on the right side. Notice the Nats have NOT put out a press release on this, I am sure they are wracked with division on it, they were when they were in government. Remember Max Bradford's structural separation of the electricity sector?

PC said...

"What do you mean "omg"?! Who do you think the libertarian leader is in this country?"

Further proof of Rick's insanity.

libertyscott said...

You're keeping a tally? There is no need for that PC :)

I'll give Rodney credit, he's learning - but Bernard Darnton doesn't need to learn.

Anonymous said...

LISTEN TO ME, TELL ME IN PLAIN ENGLISH WHAT YOU WANT ME TO WRITE WHICH WOULD HELP YOU GET CUSTOMERS.
TELL ME IN A SIMPLE FORMAT EXACTLY WHAT YOU WANT ME TO DO. I AM TRYING TO HAND YOU A PSYCHOLOGICAL NUCULAR WEAPON.

libertyscott said...

Learn to spell nuclear for starters before I can believe in your shouting.