[HN Gopher] Entire telecomm infrastructure of Iceland sold to pr...
___________________________________________________________________
Entire telecomm infrastructure of Iceland sold to private equity?
Author : openfuture
Score : 148 points
Date : 2022-07-18 21:00 UTC (2 hours ago)
(HTM) web link (www.ardian.com)
(TXT) w3m dump (www.ardian.com)
| MonkeyMalarky wrote:
| How are the PE going to make their money back?
| toomuchtodo wrote:
| Like a python digests its prey: by squeezing its customer base
| and labor.
| nwiswell wrote:
| I didn't know pythons were predatory capitalists. I thought
| they ate small mammals.
| AaronFriel wrote:
| I don't follow - on the scale of rodents to whales, I'd say
| we're still on the smaller side.
| formerkrogemp wrote:
| We're all in the rat races avoiding the pythons. That's too
| rich for me.
| whatshisface wrote:
| Private equity firms have a long track record of killing
| and leaving behind what they meant to eat.
| nwiswell wrote:
| Carl Icahn is actually three pythons in a trenchcoat
| Aeolun wrote:
| Yeah, I can't see any way this will go wrong...
| geenat wrote:
| Privatising your internet utility never goes well, as we know
| from USA, Canada.
|
| Telecoms are extremely profitable, the "lower taxes" reasoning is
| complete BS - this smells bad.
| [deleted]
| postingawayonhn wrote:
| Here in New Zealand all of the telecom companies are private
| and the fibre/copper networks are owned by companies that are
| separate from the retailers. Something like 90% of the
| population has access to at least 1Gbps speeds.
| formerkrogemp wrote:
| > Privatising your internet utility never goes well, as we know
| from USA, Canada
|
| Works out well for Rogers and Telus shareholders ;).
| bbarnett wrote:
| These were always private companies from day 1 though.
|
| edit: see upthread, I am wrong about Telus.
| ceeplusplus wrote:
| It only fails in the US because of corruption and NIMBYism.
| These telecoms buy off the local city council and prevent new
| development of any lines. Then local residents complain about
| the hassle of digging trenches, having utility trucks on the
| block, etc.
|
| When you ban this sort of bullshit permitting process it goes
| extremely well. Sometimes local authority has to be sacrificed
| for the long term benefit that residents don't see.
| lelandfe wrote:
| Yeah, I'm not convinced. New York has been ardent about
| trying to get internet providers to do their damn job and it
| just simply doesn't seem to work. The companies make out like
| bandits and routinely flout deadlines and requirements.
|
| - Charter: https://arstechnica.com/tech-policy/2018/03/ny-
| says-charter-...
|
| - Frontier: https://arstechnica.com/tech-
| policy/2021/05/frontier-knowing...
|
| - Verizon: https://arstechnica.com/tech-policy/2017/03/nyc-
| sues-verizon...
|
| It just keeps going. I could provide dozens of links here. I
| just don't think you can make enough laws to get these
| companies to do the dirty work of wiring up unprofitable
| connections, and to stop lying about internet speeds.
| ceeplusplus wrote:
| Oh I don't mean big buildout contracts - those are bound to
| be failures. It's like the government paying Lockheed to
| develop the F-35.
|
| I mean if you relax zoning regulations and permitting
| processes significantly, then private enterprise will get
| external funding and build it out. You can already get 5G
| home internet in a lot of areas from Verizon or TMo for way
| cheaper than the wired companies and it's just as fast in
| both bandwidth and latency. If we had a mmWave node on
| every block then the buildout problem gets solved pretty
| quickly.
|
| > dirty work of wiring up unprofitable connections
|
| It doesn't need to be wired to the home. See: Webpass. The
| problem is that NIMBYs will block ugly antennas sticking
| out from every building so you get mired in environmental
| reviews, neighborhood comments, etc. and nothing gets
| built.
| bbarnett wrote:
| Eh? Telecom networks were always privately owned in Canada and
| the US. They were never privatized.
| ulrashida wrote:
| Incorrect. Saskatchewan (SaskTel), Manitoba (Bell MTS, now
| sold), and Alberta (AGT, sold) maintained crown corporations
| for telecom.
| goosedragons wrote:
| No. Telus was formed from the privatization of Alberta
| Government Telephones. MTS was previously a crown corp for
| telecom in Manitoba but was later privatized and then bought
| by Bell. Saskatchewan still has their telecom crown corp
| SaskTel, although there has been rumblings of privatizing it.
| bbarnett wrote:
| Fair enough, I see I am off about Telus, and I presume
| Sasktel.
|
| Still, I seldom get the complaints. Our industry is
| private, but heavily regulated.
|
| Yes, there are bumps over the years, and the CRTC at times
| is not optimal, but the whole "must lease last mile" thing
| is part of that regulation.
|
| A mix of public control, and private industry can work
| well. To speak to that, Bell, Rogers constantly squrim and
| writhe, under their forced requirement to lease to
| competitors.
|
| They hate it, which to me means it can't be all bad.
| ulrashida wrote:
| They're very good at managing that image, it's true. It's
| hard to believe that we're in an equitable spot as
| consumers with reports showing the big three are among
| the most profitable telcos in the world.
|
| That's not even starting in on the obvious price
| coordination that highlights the dearth of competition in
| the sector.
| ulrashida wrote:
| Thankfully that matter was resolved back in 2018 when Bill
| 40 was repealed. Saskatchewan has plenty of evidence from
| other provinces what happens when natural monopolies are
| privatized.
| Inhibit wrote:
| What! I refuse to believe every American premises isn't wired
| for fibre. Since we've paid for it so many times. And required
| it in many lucrative exclusivity contracts.
|
| Some of the spending, for instance:
| https://www.jsonline.com/in-depth/news/2021/07/14/weve-spent...
| lelandfe wrote:
| > We have given away $40 billion in the last 10 years ... and
| haven't solved the problem... I always thought the definition
| of insanity was doing things the same way over and over and
| believing that, somehow, something will change
|
| Damn, I miss Wheeler. I hope Rosenworcel makes some
| meaningful progress on this front.
|
| I'm hoping the new GIS data (obviating the inaccurate Form
| 477 reporting) will help drive a lot of this conversation
| this year: https://www.appgeo.com/gis-data-is-the-key-to-
| unlocking-new-...
| andrewstuart wrote:
| In the 1800's the US government paid for the building of its
| transcontinental railroad by offering cash plus land for
| _every mile of completed laid railway track_ , with
| competition for completed miles coming from the other side of
| the country. That worked incredibly well. If you can find a
| good documentary on it, it is a fascinating story. There was
| an unbelievably intensive effort to get that project complete
| in the quickest possible time, including blasting tunnels
| through the Rocky Mountains - nothing stopped those companies
| from delivering the completed tracks.
|
| You'd have fibre to the home if the government paid _by the
| home tested to have symmetric gigabit_ , with competition
| between telco's to complete the available homes.
|
| Instead, governments pay for things other than the outcome.
|
| No surprise they don't get the outcome.
|
| Pay close attention to the attempts to build semiconductor
| manufacturing in the USA. This will fail for the same reason
| - the government is paying big money, but for the wrong
| things. It should be paying the big money when the first
| production quality wafers are delivered in real products.
| There's a big fail coming up there because they don't heed
| the lesson of the railway.
| pkaye wrote:
| > Pay close attention to the attempts to build
| semiconductor manufacturing in the USA. This will fail for
| the same reason - the government is paying big money, but
| for the wrong things. It should be paying the big money
| when the first production quality wafers are delivered in
| real products. There's a big fail coming up there because
| they don't heed the lesson of the railway.
|
| Is that how it is structured in the EU?
| not2b wrote:
| And even today the largest private landowner in California
| is Catellus Development Corporation, which was one of the
| companies spun off from the railroads. They were given way
| more land than necessary to build the tracks.
| rs_rs_rs_rs_rs wrote:
| >Privatising your internet utility never goes well, as we know
| from USA, Canada.
|
| Never? Really? You're very wrong, privatized internet can work
| very well, I'm paying $10/mo for 1Gbps up/down here in Eastern
| Europe.
| jrochkind1 wrote:
| > Telecoms isn't the winner-take-all game it used to be. Now it
| is much more about experimenting and collaborating; having Mila
| as the owner of the 5G network is going to help that process.
|
| When I hear "private equity", I think "strip it to the bone to
| profit off an existing captive customer base without making
| additional investment", I don't think "experimenting and
| collaborating".
|
| I guess Iceland will find out!
| gonesilent wrote:
| NSA just buying up whole telecoms.....
| Kukumber wrote:
| History repeats itself, that's unfortunate, but that's what they
| chose to do
| kristjank wrote:
| beambot wrote:
| I'd be less worried about this and more worried about regulatory
| capture of spectrum (e.g. for mesh WiFi and satellite internet
| providers).
| dijit wrote:
| I would be interested to hear the reasoning.
|
| I can't think of a time that this has been good for the
| population, even if you include "lower taxes" (because, honestly,
| that doesn't seem to happen).
| irrational wrote:
| I'm sure the reasoning starts and ends with the icelandic
| krona. Always follow the money.
| whimsicalism wrote:
| I think it can be difficult to prove cases where it has been
| "good" because the counterfactual case is not there to compare
| with.
|
| You can find situations where the government has implemented
| something fairly poorly, but that isn't often evidence to say
| "the private sector could have done this so much better!"
|
| But on the other hand, you might find situations where there
| has been an enormous amount of advance/innovation driven by the
| private sector, but that isn't evidence to say "the same thing
| would have occurred with government ownership!"
| karmicthreat wrote:
| Not only will it not lower taxes, people will pay even more for
| the service with higher increases each year.
|
| And in 10-20 years with no investment they will wonder why the
| telecom system is breaking.
| oyas wrote:
| It seems like the deal is off since Ardian is unwilling to close
| due to demands by the The Competition Authority of Iceland.
|
| https://www.visir.is/g/20222288293d/hluta-brefa-verd-simans-...
| westpfelia wrote:
| As someone who is interested in moving to Iceland in the next
| year or so, WOOOOOOOOO
| aaaaaaaaata wrote:
| How's your Icelandic?
| openfuture wrote:
| Nice, good news. The competition authority was revamped post
| financial crysis and has some good people at the helm.
| [deleted]
| teruakohatu wrote:
| It probably should not have been done (why ever sell an asset
| like that) but it didn't go terribly in New Zealand.
|
| The sale stipulated that the government would regulate the
| wholesale price of copper and that the copper lines, and later
| the exchanges, could be accessed by competing telcos.
|
| Years later the government, no longer owner of any copper lines,
| set up a fibre network. The fibre network is owned 50% by central
| government and 50% by private or local government owned
| corporations and its pricing is highly regulated.
|
| 87% of the population can now get a 4000/4000mbs connection for
| 117 USD/month.
| dhsysusbsjsi wrote:
| NZ is a great success story. Compared to Australia who
| privatised Telecom copper (now called Telstra), who let the
| copper rot and were also forced to allow access which caused
| 3rd party retailers and consumers large problems with poor
| access. Then the government announced a full fibre to the home
| network which started being built. Just before the large
| upwards curve in rollout, the government changed, and bought
| the rotting copper infrastructure back off Telstra (plus some
| cable) at astronomical prices. So now we have slow, expensive
| internet and the taxpayer has spent more than it would have
| cost to rollout the fibre, and it's years later.
| postingawayonhn wrote:
| > The fibre network is owned 50% by central government and 50%
| by private or local government owned corporations
|
| Does the government actually have an ownership stake? I just
| thought they provided some grants and debt financing?
| teruakohatu wrote:
| There are many fibre companies, each with a monopoly in a
| geographic area. For the largest Chorus the government own
| non-voting shares and gave them a loan, and for the others I
| believe the government had a 50% stake originally. That all
| might have changes over the years.
| Barrin92 wrote:
| I think it's okay to lease out or let private entities operate
| that kind of infrastructure under supervision but to sell off
| your national communications infrastructure, in particular to a
| foreign entity is absolute insanity for national security reasons
| alone, costs aside.
| 1-6 wrote:
| A better approach would have been to split the network and sell
| off portions of it to private equities to prevent monopolization.
| dv_dt wrote:
| For infrastructure, especially in smaller markets, it seems
| like a public monopoly would be the most cost efficient - even
| if you contracted out periodic private operational and upgrade
| contracts.
| gumby wrote:
| It's a country with the population of Sunnyale. I'm not sure it
| could support much competition.
| [deleted]
| whiskeytuesday wrote:
| Didn't almost all of Ma Bell end up inside the deathstar
| eventually anyway? [0]
|
| [0] https://www.theverge.com/2016/10/24/13389592/att-time-
| warner...
| jaimex2 wrote:
| We did this in Australia years ago. The result was well... were
| 61 billion in so far creating a new national broadband network
| because the privatised company has a monopoly and had no
| incentive to upgrade anything.
| Gustomaximus wrote:
| My understanding is there were 3 big failings in this for
| Australia.
|
| 1) Selling Telstra. The whole issue never would have happened
| if the govt still owned. Thanks Mr Howard
|
| 2) Forcing local Labor requirement in the tender. This was
| Labor union movement trying to spread money with the roll-out
| but made Testra drop out as until this they were always
| guaranteed to win. Thanks Mr Rudd
|
| 3) The 'we dont need fibre well use mixed technology'. That's
| were it truly became a waste of money and potential. Thanks
| Abbott & Turnbull.
|
| Such a failure for Australia. And as someone now using
| Starlink, so glad Musk came along and saved us bad internet
| people.
| joisig wrote:
| The purchase has not yet gone through, Ardian are saying they
| cannot continue without changes to the agreement, I believe this
| is due to some requirements by the anti-monopoly authorities [0].
|
| Mila is the company being sold, it was spun out of the national
| monopoly a long time ago to provide base layer services to all
| operators equally but was initially (and still mostly, I'm hazy
| on the details) owned by the old monopoly. The old monopoly has
| also been privatized a long time ago but has significant
| competition.
|
| I agree selling the infrastructure part to PE is almost 100%
| guaranteed to give bad results for the nation. It's like people
| never stopped to look at what the typical PE playbook is. But I
| guess it's harder to stop when everything is privatized already
| and in the hands of very many shareholders, each of them acting
| in their own short-term best interest.
|
| Source: I'm Icelandic.
|
| [0] (in Icelandic)
| https://www.mbl.is/vidskipti/frettir/2022/07/17/ardian_saett...
| solarkraft wrote:
| Has privatizing public infrastructure EVER gone well?
|
| Is there any indication this will be different from all the many,
| many, many failed privatizations?
|
| What were they thinking (really, what was the discourse over
| there? Doesn't Iceland usually tend to do reasonable things?)?
| capableweb wrote:
| I'd really want to know the same.
|
| Also, in similar vein, is there any examples of making
| something that was private before into public infrastructure,
| with good success?
| brianwawok wrote:
| Toll roads in the US for both cases.
|
| There were some crazy routes to get from A to B. Toll roads
| cut an hour or more off some popular routes.
|
| And in reverse, some states have bought out some toll roads,
| after they were deemed not profitable.
| Aeolun wrote:
| I think the problem with the reverse (private -> public) is
| that it usually happens after the company has been mismanaged
| for so long it's ready to go bankrupt.
| pram wrote:
| Most commuter rail in the US fits that bill, doesn't it?
| Amtrak, Septa etc
| openfuture wrote:
| The CEO that is being interviewed there was in the panama
| papers. He bought the house he lives in from the wife of one of
| the people who was jailed after the financial crysis.
|
| The people who were jailed didn't really receive much time at
| all and the whole thing has been misunderstood abroad.
|
| Honestly the country is no longer independent, the biggest joke
| is that our ruling political party, the independence party, is
| anything but...
|
| But these things are just the slow march to making it clear who
| rules us. Can't wait to see the identity company (also private)
| being sold in a similar way.
|
| I am doing an uprising (except the icelandic word 'uppreisn'
| also has the added meaning of 'dignity') - what does that
| entail? Well I believe that coercion is not a good foundation
| for anything supposedly legitimate. I want a more persuasive
| foundation and I guess that starts with making guix a useful OS
| for non-technical users via my "datalisp" project... I guess I
| should stop dragging my feet and make the website (datalisp.is)
| since I am opening this discussion.
|
| Whatever. The key idea is; we need to be able to trust our
| operating system, for that to happen we need a way to receive
| automatic updates without having a central source of truth,
| this is the oracle problem in disguise. The solution is to keep
| track of probabilistic estimates of trust and basically do
| science (we haven't got a better way to do physics so I don't
| see how we are expecting anything better from "AI") to assess
| legitimacy...
|
| You can see my thing at sr.ht/~ilmu and if you are Icelandic;
| uppreisn.is (note that this thing is lost in google
| translation).
|
| I've decided I would rather die than earn money doing things I
| don't believe in and that almost happened recently so
| everything is a bit scattered. However I have a meetup starting
| next month and then there will be steady progress on datalisp.
|
| Edit for some clarifications, the sale discussed is blocked
| right now by the 'competition control' agency but I don't think
| they have enough grounds and the agencies that do are clearly
| corrupt.
| robocat wrote:
| > Has privatizing public infrastructure EVER gone well?
|
| There has been a huge amount of privatisation of infrastructure
| in New Zealand over the years, and it is hard to find good
| examples of consumer harm (unlike the harmful examples for
| private electricity networks in California or Texas).
|
| The only real problem appears to be that the public keep buying
| things back or propping up private enterprise (giving billions
| to Toll for an uneconomic rail network, or bailing out our
| national air carrier Air NZ).
|
| One counter-example could be our airports which are part
| private enterprise, and man they gouge consumers with their
| monopolies. Although I think Wellington and Christchurch
| airports are private-public partnerships with local government.
|
| New Zealand is similar to Oregon in area and population, to
| give you an idea of how big our problems could get.
| quitit wrote:
| The problem with this approach is that these are entities which
| were entirely paid for by the population. Tax dollars built the
| company, and further taxes plus operating fees were paid by the
| population to keep it running. Unless the business was able to
| sell services to foreign states (like how electricity is often
| exported), then the entity exists solely on the backs of the
| population.
|
| A sell off is rarely going to result in more than what the
| population has already paid towards the business. It turns into
| a short-sighted budget booster while depriving the population
| of the unique advantages of state-held entities, such as not
| needing to turn a profit, having to answer to elected
| representatives, the power to change the management, or hold
| priorities that solely benefit the population (such as
| performing costly upgrades for economic or national security
| purpose).
|
| When looking at utilities there are few avenues that the new
| owner can take to improve profit other than cost-cutting
| exercises and increasing fees. Neither of these weren't
| possible beforehand, but an entity that needs to make profit to
| justify the purchase price will find ways of generating that
| profit.
|
| This is usually where the problems start - it's the assumption
| that a private profit driven entity possesses unique market
| knowledge, efficiencies and access to larger scales of
| economies that weren't available to prior company management.
| In most situations these benefits are overstated and don't
| render any real benefit to the population, instead the business
| usually increases costs at an outpaced rate (hello inflation)
| due to having a state granted monopoly and this levies the
| entire population with a higher cost of doing business for the
| long term.
| 6510 wrote:
| no
| gsk22 wrote:
| Which question in the parent are you even responding to?
| danielmarkbruce wrote:
| What are the many failed privatizations?
| lmm wrote:
| My parents talk about how getting a new telephone in the UK
| went from a month-long process to next day once it was
| privatized and there was profit to be made.
| [deleted]
| viccuad wrote:
| Infrastructure is a natural monopoly [1]. The cost to enter the
| market is unfavourable, and the incumbent has all the margins.
|
| Privatizing it is always a bad move for the citizens, and a good
| move for the private company.
|
| At worst, countries should keep one publicly owned company that
| owns the infrastructure and rents it to others, and also keeps
| the playing field leveled with low prices for the customers (this
| is the case in some countries but not all..).
|
| [1]: https://en.m.wikipedia.org/wiki/Natural_monopoly
| snidane wrote:
| The outcome for citizens is the same as in soviet style
| communism, except in communism the state enterprises were
| supposed to serve the commons. In this case they don't even
| have to pretend to.
| AmericanChopper wrote:
| A majority of the telecom infrastructure in New Zealand is
| privately owned, and the service there is generally very good
| and not especially expensive.
|
| This level of service was established by government giving
| interest free loans to private companies to build the fiber
| infrastructure (with one company getting about 70% of it). So
| you might want to revise your use of the word "always".
| viccuad wrote:
| I can recommend this timeline of the history in New Zealand:
| http://www.wordworx.co.nz/KiwitelcoTimeline.htm
| http://www.wordworx.co.nz/Kiwitelcotimeline2.htm
| http://www.wordworx.co.nz/Kiwitelcotimeline3.htm
|
| In short; since privatization in the 90s, the spending in R&D
| went to 1% (median in other countries is 7%). Rising costs,
| and lagging on implementing DSL in 00s. OECD list it among
| the most expensive countries to own a landline, and
| cellphone. Then, lagging in DSL+, and then, lagging in Fibre.
| Bottom of the OECD list.
|
| This is for a country that in the 50s, 60s, and 70s had an
| amazing copper infrastructure, and a computer and technology
| univerisity sector even.
| [deleted]
| limpbizkitfan wrote:
| So you would prefer a monopoly that serves a small family and
| investors vs. a monopoly that has revenue go back into the
| government?
| AmericanChopper wrote:
| I only care about price and quality of service. I don't
| have any ideological axe to grind about where the profits
| go. When I was in NZ, their privately owned telco
| infrastructure services my needs very much to my
| satisfaction.
| ccooffee wrote:
| Interesting. I was unaware of the state of telcos in NZ. I
| found this wikipedia article to have some additional content:
| https://en.wikipedia.org/wiki/Telecommunications_in_New_Zeal.
| ..
|
| Using only that article as a resource (lazy, sorry), it seems
| that the telco infrastructure improved because of
| competition. It doesn't really seem to be a private/public
| issue, but that multiple companies got into the action.
|
| All of Iceland's infrastructure was sold off in one huge
| chunk, forming a private monopoly. This may become a decent
| test case for whether government-operation or private-
| operation makes a difference. (In contrast to the wiki
| article, which suggests that competition is the thing that
| matters.) Like the grandparent comment, I expect very little
| from the private operation of Iceland's telco infrastructure,
| but I'd love to be surprised.
| onionisafruit wrote:
| If you want a preview you can look at what has happened in
| Iceland since 2005 when the privatization happened. It will
| probably continue to be the same with different private
| owners of the monopoly.
| creakingstairs wrote:
| > A majority of the telecom infrastructure in New Zealand is
| privately owned, and the service there is generally very good
| and not especially expensive.
|
| It used to be quite expensive. This only changed thanks to
| the ruling[1] that the conduct of charging monopoly price was
| anti competitive.
|
| [1] https://comcom.govt.nz/case-register/case-register-
| entries/t...
| marricks wrote:
| Well they actually have competition and regulation, with a
| diverse set of telecom options and expanding public broadband
| to boot.[1]
|
| I think all of Iceland's internet getting bought by one
| company is not a reasonable comparison.
|
| [1] https://en.wikipedia.org/wiki/Internet_in_New_Zealand#Pri
| cin...
| AmericanChopper wrote:
| A majority of the infrastructure is owned by one company,
| with some smaller companies servicing regional areas. There
| is no local competition in regards to infrastructure. No
| matter where you live, there will only be one fiber
| provider available for your address.
| danielmarkbruce wrote:
| This is overly simplistic. And pieces are just flat wrong.
|
| How are you defining infrastructure? Why is there an assumption
| it's good for the company buying it? There is virtually always
| a bidding competition, these assets don't go for cheap.
| Retric wrote:
| There are few bidders, and no bid is going to be high enough
| to make the acquisition unappealing let alone unprofitable.
|
| So it's generally just a question of how screwed the public
| gets.
| danielmarkbruce wrote:
| What makes you say there are few bidders?
| onionisafruit wrote:
| The winning bid will be high enough to make the acquisition
| unappealing to all but on bidder.
| Retric wrote:
| Not quite, there are two basic strategies either make a
| high but profitable bid to try and win or make a very low
| bid on the off chance nobody does the first strategy.
| [deleted]
| mikkergp wrote:
| Why are politicians so eager to do this? Is it because
| politicians get bribes, or because they represent the investors
| some how?
| Invictus0 wrote:
| They get short term funds for their agenda.
| danielmarkbruce wrote:
| Because they get a truckload of money to spend.
|
| There is also the reasonable argument that government run
| entities are wasteful.
|
| So, it's not a simple thing.
| Gustomaximus wrote:
| I've thought a good policy would be govt asset sale profit
| gets held in trust for ~12 years.
|
| This way it cant be a balance the budget act, and the cash
| might benifit your opponent 3 election cycles down the
| track.
|
| It probably wont stop overselling of assets but would
| definitely take away a short term incentive.
| danielmarkbruce wrote:
| It's probably a good idea. Or, if they can't run deficits
| (many US states have this) and asset sales don't count as
| revenue you'd probably be in a similar situation.
| Latty wrote:
| If it is anything like the UK, it's a simple cycle of:
|
| - Under-fund the public service because it "costs too much"
| (ignore the value it generates for the public).
|
| - Service performs poorly when underfunded, so you can
| manufacture consent to sell it, argue that private ownership
| will be more efficient.
|
| - Sell it, creating short-term income you can use to spend on
| stuff people (and your mates) like (often tax cuts), making
| your government seem effective. You can also sell it to your
| mates who then get easy profit milking a natural monopoly for
| profit, probably kicking some back to you in the form of a
| cushy "advisor" gig when you retire.
|
| - Inevitably end up making the unprofitable parts of it
| public again when the private providers simply stop doing it,
| or go under trying to. You then have these expensive bits of
| public service with no income-generating bits to offset them
| you can point to and say public services are inefficient.
| Private profits, public losses.
|
| - Hey look, public services cost too much! We should under-
| fund some other ones...
| moralestapia wrote:
| Yes.
| dhsysusbsjsi wrote:
| Imho anything that is a natural monopoly (where it makes zero
| sense to build two of them), that requires a regulator to stop
| citizens being taken to the cleaners, should be owned by the
| state. Even if run "inefficiently" (you can find examples of
| both, this is not clear), it is typically better for the people.
| gtvwill wrote:
| Erf bad luck people of Iceland. Remember folks cost + shareholder
| profit will never be less than cost alone. Privatisation will
| never make things cheaper.
| moralestapia wrote:
| This happened in Mexico around the 90s (IIRC) in a deal that was
| heavily criticized within the country. The guy who acquired it
| later became the richest man in Mexico (also worldwide for a few
| years). So yeah, these are lucrative deals.
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