No one but an idiot or a cabinet minister would expect to see businessmen or women making a long-term investment in infrastructure when theft of such an investment is imminent, or the breakup of that investment is on the cards. In Australia for example, Telstra's CEO Sol Trujillo resisted being forced to grant access to Telstra's proposed $3 billion broadband fibre network to its competitors, and indeed has resisted making the investment. Says The Economist:
Worried that giving rivals a free ride would undermine his profits, Mr Trujillo is threatening not to lay the fibreGood for him. Says Trujillo. “Those who risk capital to earn returns shouldn't have to subsidise those that don't.” Quite right.
But what about the many and various economic advantages of such a network? The fact is, if you want those advantages you need that sort of investment, and you'll only get it if government's keep their hands off -- government intervention such as has happened with Telecom is chilling for investment, not an encouragement, and not just for investment in telecommunications. The investment effect of this dismembering will be felt further afield than just the pocket books of Telecom shareholders.
If you think the breakup of Telecom is all good and will deliver you everything you might wish for, then reflect on the words of Thomas Jefferson: that "the government that is big enough to give you everything you want is big enough to take it all away again."
UPDATE: Liberty Scott has some background on how Telecom came to this, and the alternatives to political dismembering: Telecom - the Left Has Won
LINKS: Telstra shrugs - Not PC (May, 2006)
RELATED: Telecom, Property_Rights, Politics-NZ