I write the following in response to comments made about my point of view and accusations that I have a somewhat “myopic viewpoint”, which some view as being supportive of BT.
dorf wrote on Aug 18
th, 2007 at 9:05am:
I am beginning to wonder whether some of the moderators on this forum have accepted some sort of "retainer" from BT? !!! Even Ofcom reluctantly accept that BT still have "SMP". This propensity to support BT in whatever tricks they pull does any campaign against these abuses no good whatsoever; in fact it is a severe impediment to the cause.
That is because I post on here because I believe that the central issue is one of having decent telecommunications services in this country. Privatisation has allowed competition to be introduced and has also created the necessity for such companies to make money (for shareholders).
I do not see how a company like BT can reduce its market share (and revenue) whilst increasing profit and still having to maintain the network, regardless of how many subscribers it has. The point is that the network infrastructure is paramount to the country for telecommunications and therefore BT can't simply close bits down to reduce costs.
This is happening with the Post Office, where rural branches are closing, because in this “modern” time, the necessity to make profit is now being put before the necessity to have a telephone service or postal service. This was, presumably, not an issue when the networks were created.
Cable is an example of a network that has been built since privatisation and we can see that the providers only want to cable areas where they know they can get a return. On the other hand, companies like BT and Royal Mail, must provide a service to all places, whether they be urban or rural.
Another example is with mobile telecommunications, where we have four principal GSM networks. The technical aspects of getting the best coverage should be paramount for mobile telecommunications. However, what we have is the completely crass solution of having four competing providers who each go and build their own networks which cover the same areas!
There are other areas that either have no coverage at all, or aren't served by all providers. Thus, whether I can get a signal or not is not defined by the whether
any signal is present in my current location, but whether my provider covers that area.
I introduce this into the topic because it illustrates the difference between BT, the state run service which covered everywhere and the cable and mobile networks which have been built from square one by private finance. The better way of, creating/running the infrastructure at least, is surely the GPO/BT one, or at least to have one body that works as one. This has been proven to be the case with the railways.
There was talk about 'inefficiencies' and that competition and privatisation would drive these out. But all the extra mobile phone masts because each operator must have its own to cover the same area, I think is a sure sign that inefficiencies remain!
dorf wrote on Aug 18
th, 2007 at 9:05am:
In the context which I was describing a dirty commercial trick is one based on SMP. That is what BT are continually doing […] Yet Tesco can use their economies of scale to slaughter the competition; they do not resort to dirty commercial tricks to do it because they are an effectively-run enterprise managed by professionals. Now you may like them or hate them, but you have to admit that they dominate the market, and they do this on a proper commercial basis, mainly because of their economies of scale.
But the point is surely one of introducing competition to the market versus the SMP that wishes to keep/increase its market share. If we imagine that the ex-government operated telecommunications network has been run in a ‘Tesco-like’ manner since privatisation, what difference would this make with regards to introducing competition?
With 084/087 NTS numbers, BT only retains a small amount (on cost basis) for originating the calls. The amount left is paid to the NTS provider, as decided by the regulator. But NTS providers have no interest in reducing the price to callers. It is this which is the reason for saying no to 0870, along with the “local rate” et al lies which emanate from some telcos when marketing these numbers.
The scales are improperly balanced, whereby there are many providers who terminate calls but don't originate them. This is not the case with 01/02 calls and may help explain how the prices of these has been driven down. To me, this is the key sticking point and why calls to 0845 and 0870 remain high at (broadly speaking) the same as local and national rate when there was only BT.
Continued....