NBN & FTA's: The Coalition is lying to the public again

[watt price tully]

Now an independent review of Australia's headlong rush in to FTA's puts the Liberal party spin into perspective. How much are we really paying pay for negligible gain?

You're just going to have to trust us says my local member Andrew Robb when they first got into government (pr*ck)

The net result is negligible says an independent review of the FTA's.

http://www.theage.com.au/federal-politics/political-news/transpacific-partnership-will-barely-benefit-australia-says-world-bank-report-20160111-gm3g9w.html

[Dave The Man]

I be lucky to get the NBN this Decade

[watt price tully]

[partypie]

Friends who live in non urban areas who couldn't even get dial up are getting fixed wireless nbn at long last so at least someone is benefitting.

[HAL]

It's hard to stay friends for a long time.

[Wokko]

A government mandated monopoly is inefficient and over budget!? *gasp*

[pietillidie]

[swoop42]

Let's be honest and impartial.

The Labor plan might have been superior but it would have had the same cost blowouts and time delays.

Probably worse due to the increased magnitude of it.

Besides since when do any government projects come in on budget and time?

[David]

I suspect you're right; but then, a bit ironic given that one of the perks of this (clearly inferior) scheme was supposed to be its faster roll-out schedule. Just another epic fail from this government.

[Wokko]

The myth of natural monopoly:

https://mises.org/library/myth-natural-monopoly

[pietillidie]

^When I was a kid I too searched the tracts to defend my evangelical Christian views. Then, one day I started learning to learn because I loved learning more than defending my received model.

Instead of dismissing your approach, let me makes some notes here.

Something I think you don't get is that the only "first principle" in economics is some vague notion of behavioural "drive", which is in turn steered by a principle derived from that, behavioural "incentive".

"Drive" is a very plastic creature in cognitive science, which is why we are forever warned that even apparently fundamental drives can manifest themselves in completely opposite-looking behaviours (see Sapolsky's Stanford lecture series on YouTube as it's probably his central themes).

It's no surprise that the self-enrichment incentive will lead a fat post-government entity like Telstra to ham up the natural monopoly market. Agreed, completely!

Or, in contrast, the self-enrichment incentive may lead a waste disposal company in the suburbs of Dublin to claim there are no natural monopoly effects in rubbish collection, even if there are.

(The Beloved One sees yet another brand of rubbish bag on the nature strip: "So, are you saying all these companies drive up and down this street, collecting rubbish on different days, in different bag sizes and at different costs, and distribute their bags through different shops?!")

Okay, so let's not care about the propaganda of different interest groups one way or the other when trying to understand this.

Now, when your article tries to move beyond that to find something more solid to go on - a first principle or such - it flips from that hot air, to prima facie behaviours. But, in science, both of these are useless.

Does anyone think your article's noting of the existence of multiple competitors in whatever place, at whatever time, helps us much here? No; of course not! For all we know they lost money, or provided a completely shite service, or held back better technology. That stuff is about as rigorous as fable in a church sermon.

For a start, at the extremes, everyone knows Seoul and Perth, say, have very different infrastructure variables at work. And density is just one variable. One single variable. What happens when we start adding the other variables at play in each case?

The term "natural monopoly" refers to a modeling logic, like almost everything in economics, including supply and demand. No one thinks these things "exist" as actual entities in the world; they're rough reasoning logics which apply to various degrees in various situations.

The same applies to "monopolies", "cartels", "predatory pricing", "dumping", and such; these are not actual entities in the world, and neither are they first principles the world operates by. They're agreed terminology to capture something we think we're seeing. (This complexity is one reason it takes so long for anti-competition complaints to be studied and assessed - see MS and Google in Europe, for example, which more a "negotiation" than a hard factual "determination").

When we refer to a "natural monopoly" situation, we're referring to a situation which reflects a counter-intuitive scenario whereby the effect of more competitors actually worsens outcomes. And we're making this claim in a specific context contingent on other variables, such as Australia the national whole, with all its contingencies, such as geography.

In the case of the NBN, the use of the term "natural monopoly" gets even more interesting. The specific claim her is that the outcome of a single [i]private monopoly is worse than the outcome of a single government monopoly. There are no laws anywhere for assessing that; it requires comprehensive local and technical know-how to resolve.

E.g., Australians know full well that the country's population density is ridiculously low, so we know that truly private companies in a truly private market won't provide decent service at a decent consistency on a decent timeline to rural areas.

Now, some countries may not care about that. They may even want to push people into urban areas. But the Australian assumption is that rural areas a vital part of the culture, as well as being vital income-generating centres. So, that contingency matters.

Or, technically, we know broadband is a technology with compatibility dependencies; it needs people to move roughly in tandem at similar qualities to be effective. Or, we know a lot of people struggle with the complexities of technology and communications pricing plans, so introducing a new set of those is not going to give us "rational" consumer decisions at all. Or, we know politics only throws up one chance every decade or two to do something major in infrastructure, so we know we have to pile on when that one opportunity arrives. Or, we know the physics of optical fibre has a long future ahead as a core transmission medium, so this is a great strategic investment that will blow top-line expectations out of the water. Or, we know competitors elsewhere in the world are moving to provide x infrastructure, so to integrate with the global game more competitively, we have to keep up with the Kims, Johanssons and Patels.

These are some of the main contingencies, or variables, smart people bring to the problem, and they're way beyond the scope of a silly whip around of American public utilities history as one finds in that article.

We have to rely on much more than a bit of history and a few local examples on the one hand, while we can't run hard science calculations on the other. This leaves us to piece together our own defensible framework; not a perfect one, but a relatively better one, or the best one around.

The key point in economics terms is this: There are not many stable social science "laws" at a useful scale. As noted, cognitive drives and situational incentives manifest themselves in all kinds of ways.

The fact is, you already know far more about this particular Australian natural monopoly scenario than the bloody Mises Institute. You haven't felled a domino called "natural monopoly". You haven't even tried to understand the problem.

The practical reality is that Turnbull blew the one shot the country had to secure a competitive, HQ communications infrastructure.

The Glib "solution" was a bit like Abbott "solving" boat arrivals by shooting people, err, I mean towing them away. Well, we could also "solve" the broadband problem by providing shite, sub-par service to those outside the CBD or ignoring rural areas.

Instead, Mal should have seen beyond his market indoctrination and embraced the reality of natural monopoly effects which beset most of Australia in this area, taking the one shot the country had to do the whole thing properly, once and for all.

Let's hope he corrects it.

Edits: Simplified and cleaned up a bit!

[pietillidie]

LOL, now the bastards are trying to claim price reductions *the full and proper and serious FTTP plan anticipated but were scoffed at* as their own. Even worse, they're delaying realising them for customers to justify their original BS arguments and not look like the technology c$%#ckblockers they are.

http://www.theage.com.au/federal-politics/political-news/nbn-trials-cheaper-allfibre-option-20160302-gn8cj3.html

[David]

Interesting challenge to the anti-Turnbull NBN narrative from Crikey, of all places. I don't know a lot about this issue, but will be interested to see what others make of it:

http://www.crikey.com.au/2016/04/07/waleed-aly-didnt-nail-it-on-the-nbn/