[LINK] Libs won't cancel NBN - Turnbull

Karl Auer kauer at biplane.com.au
Sun Jul 1 10:54:49 AEST 2012

On Sun, 2012-07-01 at 10:04 +1000, Ross Kelso wrote:
> Whilst I realise that what you have said may be the current orthodoxy
> with much of the Link List discussion

Just to keep the ad hominem down a bit, neither orthodoxy nor radicalism
has any bearing on the truth value of the view held. The orthodox view
can be wrong, the radical view can be correct, or vice versa. "Orthodox"
and "radical" refer to the relative numbers of people in a community
holding a view.

> what exactly was the mistake in privatising Telstra - what lesson do
> we have to learn?

That the single driver for a privatised entity is shareholder value.
This means that the quality of the service provided will stabilise at
the cheapest level possible consistent with maintaining shareholder
value in dollar terms (this is called "efficiency"). Put another way,
the actual quality of the service becomes irrelevant to management; only
whether or not that cost is appropriate to the profit it generates.

In general, the provision of essential utilities should not be placed in
private hands, because the "essential" part is invisible to them.
Utilities in private hands only work where competition is possible;
that's why the provision of gas and fuel, even though in private hands,
basically works. Where unique infrastructure is needed, competition
becomes near to impossible.

>   And once you have answered that, please tell me how 
> people are going to learn what ever lesson that is with regard to 
> regulating the grandest natural monopoly of them all, the NBN?

That's kind of the point.

Regards, K.
Karl Auer (kauer at biplane.com.au)

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