[LINK] ABC/Telstra deal
Sun, 06 Feb 2000 13:10:16 +1100
George Michaelson writes:
> (and I back Stewarts call for a national infrastructure monopoly, de facto
> or by regulation 100%. I don't mind what people charge for content inside
> the pipes, as long as the pipes themselves are operated as a public asset
> and public benefit datacomms get reasonable tarrifs.)
I'm nit-picking, I know, but it is an important nit to pick.
I have never called for a national infrastructure _monopoly_. I am quite
happy to have Optus and any other carrier putting in, and running their own
parallel cable networks, if there's profit to be had. But there aren't too
many of these potential for-profit markets outside the cities.
My point is that I want one of the national networks to be owned by the
public, and for it to be operated on a non-profit basis, and to have
community-service obligations imposed upon it by legislation and direction.
It should be servicing parts of the country that would not normally be
serviced on a for-profit basis, in addition to its role in providing
competitive 'commercial' services.
It's not the monopoly element that I desire: quite the reverse.
I want a government-owned organisation to be competing with, and challenging,
any private network operator -- because there will only ever be two or three
with trunks and exchanges in a country like Australia, and only one will ever
be a true national network, and only one will ever own local loops.
And I want this government-owned network organisation to be absolutely clear
that its mission is to provide the best possible conduit for the benefit of
most Australians, not just those living in and around cities.
Content, almost by definition, will always be a highly competitive area, and
so generally I believe that government-owned organisations shouldn't be
involved unless they have community-service obligations (like the ABC) imposed
on them to provide some sort of balance and regional operation. And then,
like the ABC, it must have very strict separation from government direction
and control -- in fact, it shouldn't come under a Minister, but under a
parliamentary committee to maintain that independence.
My view of Telstra is similar to my view of the Commonwealth Bank. I have
never called for a national banking monopoly -- just that Australia should
have a government-owned Commonwealth Bank which is committed to serving the
public in competition to the other Big Three, and which has universal service
obligations instead of profit-requirements.
It should only ever be one of the players. This approach stops cartels
forming, and allows sectors with only three or four players to be largely
self-regulating (and this is the key).
Despite the pinko flavour of my writing, I am not, and never have been a
socialist -- meaning, being in favour of government monopolies. However,
there are three approaches needed here:
-- Where true natural monopolies exist, I want the government to own them to
stop private enterprise from expoiting the situation.
-- But where there are no 'natural monopolies' I want the market to be open
and free. This applies to most business sectors.
-- In between these monopoly and laissez faire markets, is a region when
governments should own just one of the competing businesses.
So I only want Telstra as a government enterprises because we need it to be
competing in an open markets. In Australia, these markets won't ever have
enough players to be self-regulating (via the invisible hand). The local
loop, for instance, will always be a monopoly I would guess, unless radio
systems improve dramatically.
And I want these government organisations to have social obligations instead
of profit-making ones, so the playing field is reasonably level -- and people
outside the commercial range get services they wouldn't normally get. I think
this approach gives us the best of both worlds -- it is a free-enterprise
system with minimum regulation (largely self-regulating), but with social
benefits not just commercial.
George's point about technology not being the only factor in price is, of
course, right. It applies to the supposed national 'open telecommunications
market' we've had since 1990 which is clearly dominated by Telstra, and
therefore true competition is a fiction (in most of their business sectors,
anyway) without tight regulation. And tight regulation is impossible when
governments are pushing for more profits or rising share prices.
Telecommunications prices have been maintained at a high level in Australia
because governments exploited the profit-making potential of Telstra whenever
they could (Labor and Liberal alike) as a way to increase the hidden taxation
of the public, without raising income taxes or adding a GST.
Very little of Australia's problems with Telstra have been caused by Telstra
itself (although the unions and management were pretty slack in the 1960s and
In the last few decades the problems have arisen from successive government
exploitation of the profit-making potential of Telstra's dominance (which the
Democrats still want to maintain). It is the greed of governments for money,
rather than the promotion of social benefit from infrastructure extension and
improvement, that's been the main problem.
Telstra executives are selected to suit these corporate profit-making
requirements, and they are then expected to react to government expectations
and directions (the actual ones, not the ones told to the media). This is
what must change.
-- the Labor party can't bring itself to actually expousing a policy of any
kind in case they get it wrong. Like Billy McMahon they "have a policy of not
having a policy."
-- the Democrats think that hidden taxes via Telstra profits are a great way
to fund environmental remedial actions -- which is a totally short-sighted and
-- the Liberals have a religous ideological committment to flog everything
they can to prop up their budget, and boost both executive salaries and the share-market.
I haven't yet worked out what the National Party position is; I guess it is
"any of the above so long as we farmers benefit".
Stewart Fist - writer and columnist
http://www.abc.net.au/http/sfist/ (some archives)
http://www.electric-words.com (main archives)
70 Middle Harbour Road, Lindfield, 2070, N.S.W, Australia
Phone +61 2 9416 7458 Fax +61 2 9416 4582