The benefit of foresight

Do you remember 1989? I do a brain dump at the end of each day, if not more often, so 15 years ago is a blur of university life, drink, the collapse of the former Soviet state and, of course, the privatisation of Telecom.

Do you remember 1989? I do a brain dump at the end of each day, if not more often, so 15 years ago is a blur of university life, drink, the collapse of the former Soviet state and, of course, the privatisation of Telecom.

It was a brave new world back then. The Post Office was crumbling (into very valuable pieces) before our eyes, the stockmarket crash of 87 was still smarting, the economy was down and unemployment was up.

We'd just spent $1 billion upgrading the telephone network to prepare it for the demands of the future and the government had decided it would be a good time to sell off the entire network, intellectual property, management rights and all, to the highest bidder.

At least one voice in the wilderness spoke out against the sale. The Post Office Union commissioned Richard IW Gan, a chartered accountant and management consultant, to write a report on Why Telecom Should Not Be Sold. Owing to the magpie-like tendencies of certain

Computerworld staff, I have a copy of this interesting document in front of me right at this moment.

"It is an infrastructure whose impact on society is not widely understood but its related information technology can strategically effect [sic] New Zealand's: economic future; cultural integrity; educational opportunities; lifestyle preferences and work and leisure activities". Golly.

The report rightly points out that despite deregulating the market, "prospective new entrants are not rushing [in]" and outlines the reasons why. You'll be familiar with those reasons by now.

"How can the government cede the control of an established monopoly/dominant player to the private sector?" Good question.

"Even in the newly deregulated environment, it is most likely to maintain market dominance. On the other hand, the deregulated telecom[ms] market is one of the freest in the world." And how we've come to understand the full ramifications of that statement.

As Telecom was being readied for sale it was also making a handsome profit for government. It was growing and "the prospect of adding value to the company ... is regarded as extremely good even in the medium term of three to five years". In fact, one of the government's criteria -- a Labour government -- for selling a state-owned enterprise was that the government "must receive more from the sale of the business than it would earn from the business's future earnings". Looking back, that seems laughable. Telecom sold for $3 billion and has more than doubled that in profits given away to shareholders (initially rich American corporate ones) in the decade since then.

Most prophetic, however, is the question of controlling a non-government-owned Telecom.

"Telecom would be difficult for anyone, including the regulatory authority, to control in a level pegging field. In the absence of such a regulatory body ... it would be even harder to supervise should Telecom's ownership be fully transferred to the private sector". We're certainly seeing that today as the battle between Telecom and its competitors over access to the local loop continues apace.

How far we've come from the days of this report. So far and yet, somehow, not very far at all.

Brislen is Computerworld Online'sreporter. Send letters for publication in Computerworld to Computerworld Letters.

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