Até Mais, Lisbon

[Martin Naef]

Peter

Peter Korsten wrote:
> You have a point that duplicating infrastructure is useless, but the EU 
> prescribes, for instance, that the former state telco, which put all the 
> copper wire in the ground, should offer 'local loop unbundling'. So I 

I know - we have that in action here at the UK. Guess what? It's neither 
much cheaper than in Switzerland (where unbundling is still discussed), 
nor do I get anything remotely like "customer service". So what's the point?

> For gas, I know for sure that in the Netherlands you can switch 
> providers for your gas and electricity supply. And nobody will come to 
> your home to dig up your garden and the street, it's just an 'accounting 
> trick' where you get the same gas as your neighbour, but you pay a 
> different company.

Same here in the UK. Did it get much cheaper? I don't think so. We just 
redirected profits into different pockets.

> really make a difference. As long as competition is guaranteed, for 
> which you have those authorities.

The "competition" is exactly what doesn't happen IMHO. None of the 
providers will start a serious price war, because it would eat into 
their profits. And because it's essentially an accounting trick (as you 
mentioned above), it means that there is very little room for actual 
efficiency optimisation - the majority of the cost is in maintaining the 
delivery network (which is a monopoly) and buying the energy (which I 
understand is an open market, but again an oligopoly); both factors are 
outside the control of the "competing" companies.

> The reason why I prefer an authority over government ownership or 
> monopoly is not because a government would be more inefficient (it is 
> not), but because this separates politics from the actual running of an 
> company. So the government can do what it's good at, which is regulating 
> and keeping checks, and the infrastructure owner can do what it's good 
> at, which is providing a service economically.

The trouble of that model is that it has an incentive to provide the 
minimal service as demanded by the authorities while maximising profits. 
But I think that infrastructure shouldn't provide a profit, but enable 
the *rest* of the country to operate efficiently. That model works for 
example for the Swiss Railway system: While technically it's an 
independent company (giving it sufficient freedom to operate 
independently from daily politics), it's owned by the government. So any 
"profit" it creates goes back to the taxpayers, who are funding the 
company in the first place.

> the Netherlands, but they get concessions for a certain period of time, 
> after a public bidding process.
> 
> Is this a perfect solution? Hardly so. Because the government has 
> delayed investing in rail infrastructure, and because traffic has 
> greatly increased, only 85% or so of trains leave in time, whereas 
> before they used to be very punctual.

That's what speaks against separating infrastructure from service. 
They're not independent, particularly where we're talking about rail 
service. The result I see again here in Scotland: There are lots of 
train delays / cancellation, yet you can't get any information from the 
people at the train station - because that's another company and they 
don't give a sh** what the other company is doing... If the delay was 
caused by a neglected point, tough luck - it's the other company's 
customers that get the impact...

> Anyway, that's my view on things: separation of concerns, free market, 
> but with constants checks and regulation by the government. So that 
> nobody gets left behind, and nobody gains an unfair advantage.

That's what I would have said 5 years ago, before I've seen it fail 
miserably...

Bye
Martin

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