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I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. Our railroads paid a nice

by econ 2y ago

I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. Our railroads paid a nice 300m in divident every year then corona came, people were told to stay home. You can guess who had to pay for the lack of travelers. The most silly are ISP's. The prices in each country depend on how much people can pay and what you get for it is rng

philjohn 2y ago
Privatize the profit, socialise the losses. The one privatisation I believe the UK got right was British Telecom. We now have a strongly regulated infrastructure side called OpenReach - the price they can charge for last mile connectivity is limited, and as such we have a load of different ISP's which either compete on tech and service (AAISP, Zen) or cost (PlusNet et al). And then a proliferation of alternative last mile providers has also occurred - I now have the option of 900/100 FTTP from OpenReach based suppliers, 1130/104 DOCSIS from Virgin Media and 900/900 FTTP from CityFibre based suppliers. I'm paying £40 a month for the latter.
- ksec 2y ago
  It is one of those rare cases where Government actually knows where the monopoly could get into and formed OpenReach. Probably worth a submission on its own [1] but UK is slowly and surely getting all the FTTP roll out. Hopefully there will be enough push to get 1Gbps Connection to every home rather than settled on 30Mbps. [1] EXCLUSIVE: January 2025 update on broadband availability across the UK, nations and regions https://www.thinkbroadband.com/news/10528-exclusive-january-2025-update-on-broadband-availability-across-the-uk-nations-and-regions https://www.thinkbroadband.com/news/10528-exclusive-january-...
- deleted 2y ago
  [deleted]
- rsynnott 2y ago
  This is partly because the _early_ days of private BT were so bad that they really had to regulate, hard. Openreach didn’t come into existence for more than 20 years after the privatisation of BT, and it happened because the state required it to happen.
AnthonyMouse 2y ago
> I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. You can straightforwardly privatize things that can't be allowed to fail. Power generation is a decent example: If you have a hundred independent generating companies that all sell into a live auction market, they have to compete with each other which keeps prices down and the market as a whole remains reliable because there are many independent suppliers using different generation methods and if any one of them experiences a failure you can immediately switch to the others. The market has the incentive to be able to supply even during grid stress because the price will go up then, so suppliers with reserve capacity make back their costs for keeping it in reserve. The problem comes when there is corruption. Instead of having a competitive market, the contract is assigned to cronies, or a lack of antitrust enforcement allows the market to consolidate until the suppliers are a cartel. Then, since competition is thing that gives privatization its advantage, the lack of competition causes the public to get screwed.
- tofflos 2y ago
  There can't be a competitive market. The entity that operates the grid has a monopoly on all customers in the area. So I would say entities that govern grids fall in a can't-be-allowed-to-fail-category while entities that govern generators do not (unless they buy enough generators in a region to effectively become a monopoly).
  - AnthonyMouse 2y ago
    If you had a monopoly generating company and it failed then the power goes out even if the grid is up. It's just as important as the grid, but it's amenable to competition. "Operating" the grid isn't the natural monopoly either. The natural monopoly is actually the physical space beneath the grid, i.e. the roads. If a storm knocks down a pole or some transmission lines need to be upgraded you could put out bids to any number of companies to come and do the work. If customers want to buy power from a generator, the grid is used to deliver it, but that doesn't mean the grid operator has to be an intermediary between the supplier and the customer instead of a vendor of the supplier paid to deliver power. It's not even obvious that they should be paying per kWh instead of funding distribution through taxes in the same way as the roads, since a well-functioning grid should never exceed peak capacity but using otherwise-idle transmission capacity has no variable cost. And then what's the natural monopoly? Just physical ownership of the infrastructure, and some accountants to predict when demand is about to outstrip supply and bids should be put out to expand capacity.

by econ 2y ago

philjohn 2y ago

Privatize the profit, socialise the losses. The one privatisation I believe the UK got right was British Telecom. We now have a strongly regulated infrastructure side called OpenReach - the price they can charge for last mile connectivity is limited, and as such we have a load of different ISP's which either compete on tech and service (AAISP, Zen) or cost (PlusNet et al). And then a proliferation of alternative last mile providers has also occurred - I now have the option of 900/100 FTTP from OpenReach based suppliers, 1130/104 DOCSIS from Virgin Media and 900/900 FTTP from CityFibre based suppliers. I'm paying £40 a month for the latter.

ksec 2y ago
It is one of those rare cases where Government actually knows where the monopoly could get into and formed OpenReach. Probably worth a submission on its own [1] but UK is slowly and surely getting all the FTTP roll out. Hopefully there will be enough push to get 1Gbps Connection to every home rather than settled on 30Mbps. [1] EXCLUSIVE: January 2025 update on broadband availability across the UK, nations and regions https://www.thinkbroadband.com/news/10528-exclusive-january-2025-update-on-broadband-availability-across-the-uk-nations-and-regions https://www.thinkbroadband.com/news/10528-exclusive-january-...
deleted 2y ago
[deleted]
rsynnott 2y ago
This is partly because the _early_ days of private BT were so bad that they really had to regulate, hard. Openreach didn’t come into existence for more than 20 years after the privatisation of BT, and it happened because the state required it to happen.

AnthonyMouse 2y ago

> I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. You can straightforwardly privatize things that can't be allowed to fail. Power generation is a decent example: If you have a hundred independent generating companies that all sell into a live auction market, they have to compete with each other which keeps prices down and the market as a whole remains reliable because there are many independent suppliers using different generation methods and if any one of them experiences a failure you can immediately switch to the others. The market has the incentive to be able to supply even during grid stress because the price will go up then, so suppliers with reserve capacity make back their costs for keeping it in reserve. The problem comes when there is corruption. Instead of having a competitive market, the contract is assigned to cronies, or a lack of antitrust enforcement allows the market to consolidate until the suppliers are a cartel. Then, since competition is thing that gives privatization its advantage, the lack of competition causes the public to get screwed.

tofflos 2y ago
There can't be a competitive market. The entity that operates the grid has a monopoly on all customers in the area. So I would say entities that govern grids fall in a can't-be-allowed-to-fail-category while entities that govern generators do not (unless they buy enough generators in a region to effectively become a monopoly).
- AnthonyMouse 2y ago
  If you had a monopoly generating company and it failed then the power goes out even if the grid is up. It's just as important as the grid, but it's amenable to competition. "Operating" the grid isn't the natural monopoly either. The natural monopoly is actually the physical space beneath the grid, i.e. the roads. If a storm knocks down a pole or some transmission lines need to be upgraded you could put out bids to any number of companies to come and do the work. If customers want to buy power from a generator, the grid is used to deliver it, but that doesn't mean the grid operator has to be an intermediary between the supplier and the customer instead of a vendor of the supplier paid to deliver power. It's not even obvious that they should be paying per kWh instead of funding distribution through taxes in the same way as the roads, since a well-functioning grid should never exceed peak capacity but using otherwise-idle transmission capacity has no variable cost. And then what's the natural monopoly? Just physical ownership of the infrastructure, and some accountants to predict when demand is about to outstrip supply and bids should be put out to expand capacity.