KEY POINTS:
Bill English has been sleepwalking for the last decade. That's the only conclusion I can come to following his dingbat proposal last month that state-owned enterprises such as power companies could be partly sold under a National Government.
Has he learned nothing from the disastrous experiment begun by
Labour and completed by National that saw our taxpayer-funded infrastructure sold down the toilet?
Wake up Bill and look at Telecom - the prime example of how this blind faith in market forces simply doesn't work. Look at the waste, the lost opportunity and then talk to consumers. Despite its promises, privatisation hasn't eliminated usurious charges, appalling service and shoddy maintenance. Instead we get the pretence of competition under a monopoly and a corporate attitude that serves shareholders ahead of customers. In short, the private sector in New Zealand doesn't do public utility and never will.
Telecom is the perfect example. If it had been run properly as a public utility, it would have forgone huge profits over the last 15 years in favour of investing in fibre-optic cabling to replace its ageing copper network.
By now most of the country would have been re-cabled and most of us would be getting converged telecommunications - almost free phone calls and decent broadband delivering internet plus TV.
Instead we face the prospect of a privatised, mostly overseas-owned company finally - after 15 years of Government dithering - opening its mainly copper network up to competitors. But because it's a privatised monopoly, even though its network is in dire need of upgrade, the company has no incentive or inclination to do so. From Telecom's point of view, it makes perfect sense. For the past decade it's made a tidy profit and nice returns to shareholders by keeping competitors off its clapped-out network. And for the next decade it can do the same by allowing them in.
Yes, we may finally get slightly better prices and slightly better speeds in some areas where competitors put better equipment into Telecom's exchanges. But it will still be services delivered over a clapped-out network - and for many rural users that means no broadband at all.
No Bill, we're not buying your sleepy mantra of let the market decide. For more than a decade we have seen what the market does in network and other public utility services. It tends towards monopoly. It likes to stifle competition and takes short-term gain ahead of long-term benefit. The utility market in New Zealand doesn't care much for the public good and it thrives in a moral vacuum.
Even when there is another pathway to provide genuine consumer choice, the market will always opt for cosy duopoly rather than genuine competition. Look at what we get with Vodafone and Telecom - a choice of two of the most expensive mobile phone services in the world that jealously guard their patch to stop a third operator setting up. And then they whinge - or at least Vodafone does - threatening to suspend its 3G network roll out.
Thankfully Ross Patterson, our telecommunications commissioner, is having none of it. "A boycott on investment seems to be a fairly standard reaction from every incumbent facing regulation. Competition surely drives your behaviour?" he said to Vodafone in reference to the fact that should a third mobile operator enter the fray, the company would rapidly deploy network build-out to protect its advantage.
We would certainly see that behaviour - furious trenching of footpaths - by Telecom should anyone with any vision decide to build a national fibre network. But while competition and choice is undoubtedly a good thing, it clearly doesn't work with networked public utilities. And selling off more chunks of our infrastructure to hand it to the market wolves is not what we need.
What we desperately want is public utility - utility for the public delivered in an efficient and affordable way. And no, we don't want to pay for it twice. Come up with a policy to do that, Bill, and then we'll know you're awake.
