

How Thatcher Killed UK Superfast Broadband - almightysmudge
http://www.techradar.com/news/world-of-tech/how-the-uk-lost-the-broadband-race-in-1990-1224784/1

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almightysmudge
Maybe someone can explain the decision in principle to me here, because I
don't understand how the deliberate retardation of network infrastructure is
beneficial to encouraging competition. I get that the entry costs to the
market would be higher for a new start up, but that seems irrelevant given the
target competitors, and a silly bloody way of doing it anyway. But I'm
genuinely curious to hear the other side of it?

~~~
mattgibson
If you want to take a cynical stance, you could look at it as deliberately
introducing competition to an obvious natural monopoly, which pretty much
guarantees an inefficient market and therefore monster profits.

Thatcher (and later Major) did the same in other places e.g. deregulating the
City, privatising the railways. Pretty much the same story there, with monster
profits and seriously degraded infrastructure.

If you are in the business of doing absolutely anything to maximise profit,
then you need to be of the opinion that your changes are a good idea for the
population as a whole, otherwise you'll feel guilty. The belief that
competition always makes things better for everyone, regardless of the
observed outcome, fits the bill here.

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almightysmudge
She wanted to encourage competition, but that competition never arrived, so we
still have a shit infrastructure and an ineffective monopoly essentially?

~~~
hackerboos
I wouldn't say the competition never arrived. We have competition in rail and
internet in the UK (rail is slightly different as companies bid for contracts
to provide services over a period).

The point is that each company is not going to roll it's own track or fibre.
They lease the railways from the government and they buy wholesale bandwidth
from BT.

Energy, rail, communications are natural monopolies. It's hard to produce
competition in these sectors.

The East coast mainline fell back into government ownership because of the
failure of the private company that was running it. The government has earned
a lot of money running the line.

[http://www.theguardian.com/uk-news/2015/mar/01/east-coast-
ra...](http://www.theguardian.com/uk-news/2015/mar/01/east-coast-rail-line-
returns-to-private-hands)

~~~
slgeorge
I don't know about rail, but I don't think it's true to say we have
competition in Internet in the UK. We do have some, but it's "constrained"
competition, defined in a way that will never be truly disruptive to BT.

The natural monopoly BT has is the core network and the geographical exchanges
in every town. In the case of BT it was handed a national network which it
then gets to monetise: in return it had to continue to provide 'universal
service'. The problem with this type of set-up is that it puts BT in the
position where their best minds are in an arms race against the regulator:
they use all sorts of tricks to show how expensive their core network is and
they make it very difficult for alternative providers. It's just natural, if
they can create barriers to competitors or price competitors out then it's to
their benefit.

While I'm not in that industry more I'm citing personal experience - I was at
a provider when ADSL was coming onto the scene and they made it very difficult
and complex to form your own backbone network. It means that you're going to
"innovate" on top of the BT network - which will never be disruptive to BT.

There are other situations where you can see the level of monopoly they have.
For example, they basically held the government to ransom when they said they
"might" not built the advanced network (21CN) which got them a pile of cash.

It's consumers and business outside of the South East (London) that suffer -
consumers because it's basically everyone is held to the speed of BT's
innovation, and business outside the South East because there often aren't
alternatives.

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pjc50
The tragedy is that merely not privatising it probably wouldn't have saved the
project and it would have been killed in a search for "cost savings" to save
"taxpayer's money" anyway. This was the era of the Advanced Passenger Train
and Concorde.

