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June 14, 2003
This is depressing.
"The cosy, and now profitable, duopoly of Telstra and Optus is on the verge of being restored. But at a staggering cost.
In an implosion of wealth that dwarfs the $2 billion collapse of One.Tel for sheer greed and incompetence, billions of dollars have been spent on new telecoms networks that will never be used and thousands of jobs have been sacrificed to, quite literally, pipe dreams to break open the increasingly comfortable Telstra-Optus nexus."
Years of competition, lots of wastage and it reproduces a duopoly. And that is that can be said for deregulation? No wonder economists have difficulty with offering a plausible definition of rationality, or even wimp out. What is rational about what has happened in the telco industry? It can hardly be called utility-maximising behaviour. Can it be even be called the intelligent pursuit of self-interest by economic agents? Rationality implies the systematic use of reason (ie., the disciplined use of reasoning and reasoned scrutiny). What we have is debt-ladened, underfunded companies with few customers, duplicated networks that will never be used and merchants banks that have made multi-millions from fees from helping to create a frenzy of ditch digging and cable laying.
If it is judged that there is rationality embodied in thedestructive processes of the telco market (creative destruction?), then this is a rationality that is stripped, or dissociated, from human conduct in civil society. It is a rationality that is disconnected from from value and ethics (other than the value of economic self-interest). What the individual telco (X) values is chosen entirely according to their self-interest, and it (x) only sees other telcoes insofar as they hinder or facilitate X's self-interest. The Telco industry is a good illustration of the consequences of this.
This not a use of reason to promote a better kind of society.
Now the same is being done with water. You can see the early results here.
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I always wondered how telcos could compete for long. To rely on Telstra's line would always constitute the sort of 'business plan' into which only the acutely troubled could invest. To roll out a gratuitously duplicate network, well, that would just be mad. To argue, as every bloody smarmy suit has argued since about 1975, that new technology would undermine the natural monopoly argument, is to invite the question: 'how?". Yet it seems no-one accepted the invitation, and we're a score of billions down the shitchute as a consequence ...
We coulda split the physical network from the 'value-added' digits that rode upon it back in '88, when the ROSA Report suggested as much to Bomber Beazley. We coulda had all-but-free telephony, coulda seen a national diffusion of the internet unrivalled the world over, coulda had Oz businesses competing internationally with almost no communications overheads, couldabeen the Anglophonic world's core provider of data streaming, coulda avoided producing hundreds of thousands of 'ma & pa' investors losing billions, coulda kept our investment banks from investing in fibres that will never see a single pulse (wonder how they're currently hiding those 'assets'?), coulda kept uglifying sagging cables from our suburbs' electricity poles, and coulda kept Murdoch from dipping into our phone company's telephony revenues with impunity.
But we didn't. Instead, we got absolutely everything horribly and lastingly wrong ...