Friday, 5 May 2006

Telecom: Who leaked? Who cares.

With the unerring inability that has marked his career in politics since it began, Bill English goes searching for red herrings once again while the big fish all around elude him. Sadly, too many others have joined him angling for herrings while sharks are chewing up NZ's largest company.

Who leaked? Who cares.

While even his party's IT spokesman Maurice Wimpianson realises the nationalisation of Telecom's network is a property rights disaster -- the major issue here! -- Sideshow Bill thinks the big issue is 'the leak!' "This is a billion dollar leak," says an idiotic English, ignoring that the announced nationalisation has destroyed a billion dollars of Telecom's value, not the leak -- it is the act of vandalism against Telecom that destroyed one billion dollars, not the advance warning of it.

"Someone senior in the Government, a politician or an official, set out on a path of economic and political sabotage," Mr English told reporters. What an abject moron. This seeker of the irrelevant, this parliamentary apostle of wetness, suggests somehow that the whistle-blower did something immoral.

They didn't. What was 'sabotage' was Cunliffe's announcement -- what is immoral is the nationalisation. What was neither of the above was the advance warning of theft which the leak represents.

Whoever the whistle-blower was, whoever divulged Cabinet's plan to nationalise Telecom's network, did exactly the right thing. What the whistle-blower did was warn a victim of burglary what he overheard the burglars planning to do to them. It was a moral act.

No wonder its worth has escaped Bill English.

NOTE: Liberty Scott has summarised here the main reactions to the announced nationalisation of Telecom's network.

UPDATE 1: Here's the headline I should have used, from a blogger who'd make a better sub-editor than I: 'When Leaks are Followed by Drips.'

UPDATE 2: It doesn't get any better for Telecom now, does it (see lunchtime chart at right). The loss of value since Wednesday afternon is now $1.7 billion. While some of the sell-off is due to Telecom's own troubles (with AAPT for example), as Tyndall Investment's James Lindsay observes, "the company's results are ``completely overshadowed'' by the government's decision May 3 to give rivals more access to Telecom's network." So Labour's attack on Telecom now amounts to an act of vandalism that has destroyed over a billion-and-a-half dollars in just a day-and-a-half of selling.
LINKS: Cabinet document leak to Telecom "economic and political sabotage": opposition - The Techsploder
The bilion dollar leak - NZ Herald
National and ACT show some principle - Liberty Scott
TAGS: Politics-National, Politics-NZ, Property_Rights


  1. michael fasher5 May 2006, 11:18:00

    Whoever leaked should get a damm medal!!!!

  2. Don't knock it -TEL's share price is the most exciting thing in my life at the moment - I think I need to go out more!

  3. Unfortunately I think sub editors are charged with spell checking as well so I'm screwed :(

  4. I notice the government is asking the Nats why they haven't put out a press release on this issue - methinks you have Maurice on one side and Mr Farrar et al on the other - with most of them only caring what is most popular.

    If the Nats side with Labour on this, Telecom presumably has a bucket of party political funding that wont be going near either of them.

  5. Destroyed $1.7bn off the speculative value (ie, the share price) of the company. None of the actual assets of the company were damaged. The shares are still worth proportionately the same of Telecom.

    So this affected a whole load of people who get upset when the speculation on the share's worth decreases. This does not equate to damage or theft.

    If I can show that that speculative value decrease is less than the speculative value increase of NZ as a whole, would that make things different? Then you could argue that Telecom is making a $1 trillion (or whatever) act of vandalism against our society by raping the entire country over broadband.

    When I consider the power of the ADSL broadband I got from Telecom in 1999 as a Trial group user, the answer to who is the real thief is obvious.

  6. Let me address some points from Sam's comment above.

    1. Speculations is wonderful and absolutely essential in order to create vibrant and dynamic economies. It allows capital to flow where it is most required. If it were not for speculation then the writer of the above comment would unlikely be driving a car, using a computer, or enjoying all the benefits of westen society.

    2. A share price reflects the value of cash flows which it is estimated will be generated from now into the future. The government has now said that it will - at the point of a gun- overide Telecom's rights (in an act of nominal nationalisation) to use its assets in a way which benefits the shareholders (an in so doing its customers). Assets owned by Telecom exist so as to generate wealth for shareholders. The ability of Telecom's assets to generate cash flows have dropped substantially because someone (the government) has pulled out their guns. It has resulted in the destruction of wealth - an act of vandalism. Maybe that is a better term than theft to describe what has happened. Be assured everyone is worse off as we now live in a society where government vandalism is not just accepted but encouraged by so many.

    This writer says "If I can show that that speculative value decrease is less than the speculative value increase of NZ as a whole, would that make things different?"


    "When I consider the power of the ADSL broadband I got from Telecom in 1999 as a Trial group user, the answer to who is the real thief is obvious."

    Your hatred of Telecom is obvious. It is hideous that you make the victim of all this (Telecom) appear as the aggressor. You may not like Telecom however no-one has the right to tell them what to do with their assets.


  7. Sam

    Who does Telecom steal from? Nobody forces you to buy its services.

    You might want to correct your social-credit neo-Marxist views of value. The sharemarket price is the current market value of the company - as if your house was on the market and people owned parts of it.

    Telecom's actual assets would be worthless if the government said anyone could take any part of the assets they wanted - what the government has said is that Telecom must allow others to use its assets, attach property to it and get paid a regulated price for it. That DOES strip asset value away, because Telecom now has less control of what it owns that it did before - when it has no control then it is worth nothing. Simple as that.

  8. Sam, you type speculative with such disdain. There is not a big, bad, bogeyman named Mr. Speculator, even if he is the villian of your class warfare story. Those hurt when a "blue chip" company's stock value plunges include little old ladies, teachers pension funds, as well as the valuation of many individual retirement accounts.

    *applause* to Julian & LibertyScott.


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