Sunday, 26 February 2006

Stealing Telecom's property with weasel words

Let me try a phrase on you: "Local loop unbundling." There. I'll wager most of you have switched off already, haven't you? But you shouldn't. While geek phrases aplenty are being flung about, plans are afoot to dismember NZ's largest company and to nationalise the bits left over.

What "local loop unbundling" really means is this: nationalising Telecom's telephone lines because other telecommunications companies can't be arsed building their own, and the RMA makes it all but impossible to do so if the will were there in any case -- which it isn't. In a word, it is theft.

Why invest in your own lines when the RMA makes it too damn difficult to lay them or string them, and when you can get them anyway by stealth - by theft, and with the vigorous support of all sides of the traditional one-dimensional left-right spectrum it seems, from Green to Tory and all points in between. (Observe that the very terminology of left and right was derived from the post-Revolutionary French parliament when both left and right sides of parliament were arguing over to whom to dole out all the proceeds of loot and pillage.) The honorific seems no less appropriate to today's apologists for theft and interventionist dimememberment of private property, who think their desire for broadband internet trumps Telecom's right to keep what is rightfully their's.

You may argue about how Telecom was set up if you like, but the fact is that Telecom exists as it is and may rightfully go about their business as they and their shareholders wish, with their private property remaining their's just as long as they wish it to do so. LibertyScott fisks Russell Brown's own piece in favour of and concludes his piece with the promise to...
blog later on what I think should be done about New Zealand telecommunications, after reading the report from InternetNZ. It comes down to being more creative than simply the government taking away property rights, but about those who want a better deal negotiating it and using the power they have. After all, Telstra is hardly a minnow in the lake.
The fact is that as long as Telstra et al figure they can get their way by theft, they'll be unlikely to be making their own plans to install their own wires. The sooner this demand for nationalisation is closed down, the better for us all. As former Libertarianz leader Russell Watkins said last year:
The only thing that needs to be regulated is the government, the only price that needs fixing and reducing is government spending, the best savings for the consumer will come when the government abolishes outfits like the interfering Communist Commission—and many more government departments besides.
LINKS: Left? Right? A plague on you both - Peter Cresswell
Telecommunications and Russell Brown - LibertyScott
Leave phones alone - Libertarianz

TAGS: Politics, History, New Zealand, Politics-NZ


  1. Telecom is a government created statutory monopoly, the government made a mistake in setting up Telecom the way it is and should rectify that asap.

    And stop banging on about the RMA, in this case it doesn't apply.

    If the RMA is the problem, just how would getting rid of the RMA make setting up a second standalone network cost effective?

  2. Robert Winefield27 Feb 2006, 09:16:00

    Cost effective? How is it any of your business whether a first, second, third or forth private stand-alone network is cost-effective? Your money isn't at risk?

    Oh! Silly me, you mean to suggest that the government should use tax-payer money to set up a telecommunications company in competition to Telecom.

    Here's an idea, how about getting the guvinmint out of the phone, internet, computer, carrier-pigeon business all together. The last time they ran it was in the early 1980s. In those days the only telephone I had was connected to a human operated exchange of the sort invented around 1910.

    Within ~1 year~ of Doger Rugless selling off that the Telecommunication business Mangakino's telephone exchange became fully digitised and for the first time in my life I got a push button phone and was able to make international phone calls.

    The government can't even run the things it is supposed to run properly (The police, military and justice system) - why the ~HELL~ would anyone want the politicians anywhere near anything else?

    Those bastards in Wellington have a reverse-Midas effect on everything they meddle with - it turns instantly to shit.

    And if you actually ~read~ the post you'd figure out that PC's solution is to get the government out of the picture by repealing the RMA. That way anyone with the capital and the gumption can actually set up a network in competition to Telecom.

    And the winner of that competition will be the one who entices the most customers onto their network by providing the best service at the lowest cost.

    All without a single guvinmint eddict.

    Hell it works that way with NZ wine, cheese and bread manufacturers - why the hell would telephones be any different.

    Or perhaps you want the guvinment to run those too. Hell National and Labour have done such a great job with the Health system - I can't wait to see what Kiwi-bread tastes like.

  3. It does not have to be this way. We are arguing about horses and carts in an automobile era.

    Check out the NZ entrepreneurial firm "INDRANET". Telecom is a dinosaur, thrashing about, trying to protect itself from other dinosaurs, meanwhile out in space a meteorite is making inflight corrections to its point of impact with earth. On impact the climate will change; the dinosaurs....?

    [disclosure: I have interests in Indranet]

  4. Mark, Telecom does not have a statutory monopoly - the statutory monopoly on telecommunications ended in 1989. Anyone can set up if they wish, BUT - Telstra Clear abandoned its plans to set up a network in suburban Auckland (it has been done in Wellington and Christchurch), because although it could get permission from the power company to put cables on the power company poles, the local authorities made it a notifiable activity, and effectively prohibited new networks going in unless they were underground - so Auckland has a competing network in the CBD only.

  5. Actually Telecom engages in government sponsored "predatory pricing" - the Kiwishare agreement whereby local calls are free.

    The present day local loop monolopy situation is caused by two things: (1) the sale of Telecom as a going concern, rather than several regional telecoms companies, and (2) the Kiwishare agreement which effectively prevents local telecoms companies from starting up in the first place.

    Additionally Telecom enjoys special rights for right-of-way of private land and does not pay for the use of regional / city land.

    The only realistic chance for a Telecom competitor now are powerline networking technologies, or more likely one of the wireless standards. There are already numerous small wireless networking companies which specialise in supplying reliable high-bandwidth connections to suburban businesses, but as yet no one has applied the idea to domestic consumers in a big way (Wired Country only exception - and it doesn't have any clue about marketing).

    If the interferers get their way again, Telecom will be forced to offer much faster broadband plans at lower prices, making it less economic for potential competitors to emerge.

    Imagine if Telecom Mobile had been forced by the government to go digital and offer lower prices 10 years ago. Would Vodafone NZ's introduction of new services and technology have been possible? I don't think so.

  6. Yes the Kiwishare is a problem and should be abolished.

    Telecom does not have rights any more special than others for access to private land - the Network Operator status under the Telecommunications Act guarantees a level playing field for telecommunications rights of way - except when it comes to RMA matters, where incumbency helps because resource consents are not needed to keep your network maintained, but they are to build a second one.

    You're right about mobile too, high prices will encourage a competitor to come in, and regulating Telecom's high mobile prices in the early 90s would have killed off any hope of BellSouth entering the market.

  7. "Telecom does not have rights any more special than others for access to private land"

    Doesn't Telecom have rights to large swathes of land? (can't remember what they're called sorry).

    Aside from that I was more referring to the telephone cables going into private homes and the Telecom gear which resides on public (local council) property at no cost to Telecom. But that's not the meat of my comment anyway.


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