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On 30/10/17 23:28, Mick wrote: |
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> The regulator does not hold the budget, central government departments do and |
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> the regulator cannot (or will not) control abnormal profits privatised |
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> utilities are making year after year. However, the regulator will engage |
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> enthusiastically in the a theatre of regular reviews of market conditions, in |
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> an attempt to convince consumers and tax payers the most gratuitous abuse of |
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> power is kept in check. |
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Quite often that's the government's fault too ... |
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The reason British Telecom made obscene profits for YEARS after they |
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privatised was because they inherited terrible infrastructure that cost |
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a lot of money just to keep going. |
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And the reason it cost so much was that every time the General Post |
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Office tried to put money aside to replace said infrastructure, the |
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Government (the sole shareholder) declared a large dividend and took it |
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away. The alternative was for the GPO to borrow, but every time they did |
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that the Treasury said "that money is part of Government Borrowing. |
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We're committed to reducing government borrowing so you're not allowed |
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to borrow". |
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So BT made gazillions because a brand new exchange, with a ten year |
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warranty, probably cost about two years' maintenance of the exchange it |
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replaced. And because BT were quite visibly cutting prices (not by |
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much!) but the new infrastructure was reducing costs so much faster, |
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their profits soared. |
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Cheers, |
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Wol |
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