> I believe the best way to make this work is by keeping the network itself in public hands and then having a competition of contributors to the network - e.g. electricity providers that add energy to the grid.
One area -- in fact, the only area that I can think of -- where privatisation has mostly worked in the UK is the telecommunications market. Here the networks are in private hands, but the providers are forced to offer somewhat equitable access to their competitors, e.g. by sharing masts, poles and underground ducts. That, plus the relatively low cost to entry of setting up as a new player, seems to be enough to keep prices down and service levels up.
This wouldn't work for transport of or on rail, road, water or gas, because there's no realistic way to force different entities to share the same infrastructure; you can't reasonably set up two parallel gas networks, or run two independent sets of rails. In those cases I agree that we have experimentally proven that socialising the infrastructure was/is the most efficient option. Now we need a government with the political chutzpah to accept that.
It's testament to how successful some of the early privatisations were that many people now don't realise that the businesses were ever in public hands - eg British Airways, British Petroleum etc. It seems ludicrous to think they were ever nationalised industries now.
Because of the Thatcher government wanting to "open the market" to American telecoms, in the 1980s they stopped the world leading Fibre rollout that BT had already started.
Decades later the UK is still behind the countries that took all the tech and continued what we'd started.
The main reason I think for why the telecom market succeeds under a fully free market model is the fact that you're buying network access, not a concrete product. To compare it with electricity - every house comes with access to the electrical network for free and the network is maintained by the government; what I pay for is for someone to put voltage on these wires. Whereas when I pay an ISP, I pay for the right to access to the wires themselves. The data is either free (e.g. this site), or paid (e.g. Netflix), but the ISP itself doesn't enter the equation, they are just paid to maintain the network.
This suggests that you could privatise both the electric grid and the electric supply, but only if you enforce strict separation of the entities owning the one and the other. I'm saying this just as a thought experiment, there seems to be zero benefit to privatising the electrical network. The main problems with a government run service boil down to possible inefficiencies raising the price above what a hypothetical lean business would do; the fact that changes at the government level happen slowly; and lack of consequence for doing the job poorly. For an old, established technology like electrical wiring, these are mostly theoretical criticisms - it is extremely unlikely for a revolutionary change in electricity delivery to happen any time soon.
Openreach should be nationalised though because it owns the poles and ducts that can't be duplicated easily. It has been forced to open up to competitors, but then the only way for them to extract value is probably by taking on debt much like the water companies have done.
I just don't see how the free market helps in the maintenance of poles and ducts. That should be owned by the state.
As I understand it, Openreach charge their competitors a fee for duct and pole access, so there is some way for them to extract value from their ownership of the network. Whether that's a better detail for the taxpayer than nationalisation, I don't know. I was really just pointing out that it appears (appears!) to be a sustainable solution.
The issue of privatised companies taking on debt whilst paying dividends is a pure failure of government regulation.
One thing that can be done for all these services is to allow any private company to offer the customer facing front end (payment, bundling, support etc) which plug into a common wholesale backend.
Yes, BT was divided into two business units to enable this process. They unlawfully colluded with each other in order to stop any reseller from being able to charge less than the BT retail offering. Result: terrible infrastructure investment and no competition.
Or the other way round - have a thin public service to interact with users, subcontracting all the heavy lifting to competitive bidders working to a rigid specification. You set up a monopsony rather than a monopoly, letting the public rinse the companies for once. This is how Transport for London provides bus and Docklands Light Railway services, and it works very well.
>where privatisation has mostly worked in the UK is the telecommunications market. Here the networks are in private hands, but the providers are forced to offer somewhat equitable access to their competitors, e.g. by sharing masts, poles and underground ducts.
Not strictly true, currently the Govt is subsidising infrastructure providers to the tune of £3000 to £4000 per household for every one that has fibre to the property (FTTP).
So a company like this one https://countybroadband.co.uk/ needs to get about 30 households signed up, they have 1 year to get the cables laid to their greenbox street furniture, and then then run fibre from village to village until it ends up back in London, probably telehouse.
So its costing about £90k per greenbox, and depending on where on the run you are, you might see a bit of a lag if you are at the end of the run in places like north norfolk, but if you live in a village somewhere in essex, ie closer to the main routing points in the UK, then the lags will be less noticeable.
This also ignores cloudfare type data centres which cache the most popular content and locate it close to your door.
But there's a govt subsidy here going to businesses, in this case infrastructure providers for home users.
Now if you take this place https://en.wikipedia.org/wiki/Cwm_Dyli its got fibre which it had to pay for and cost £200,000 a few years ago when it was strung up the poles. But its also benefited everyone in the area who didnt have to put their hand in their pocket, but the fibre is somewhat exposed on the telegraph poles imo.
There is actually alot of fibre already in use in the UK, because fibre doesnt really change, so the improvements in fibre come from lower costs and improved compression ratios by detecting the traffic type and then compressing it, which requires a level of oversight on everyone's internet traffic going in and out of the country. Goonhilly has been doing some of this sort of algo compression/traffic detection testing in the past. https://thefalmouthconvention.com/record-2/field-trip-report...
Rail companies push up the costs, much of it through clever accounting, setting up leasing companies for rolling stock, separate companies for man power etc etc. You'll be surprised how many foreign companies have a slice of the british railways. If you are fed up with the state of the rail services, beat up on the foreign countries and companies that have a slice of the pie.
Roads, builders all submit tenders, the unwritten rule (for all types of building work including schools, hospitals in the UK) is if you dont want the work, submit a super expensive tender, those that want the work price competitively.
The main advantage of privatisation, is you get new ideas being tried out more quickly than with socially owned or governmentally owned entities. In other words it brings diversity to the table, instead of conformity.
Legislation already brings conformity in many ways, but this is still after people but typically businesses have been consulted on for a govt white paper.
It also gives govt the ability to say its not my fault when something messes up, so if you really want to beat up on the govt, get everything taken back into state control, then beat up on the govt. If the govt is smart, it will push responsibility's onto other people who feel they have the chutzpah to run a multi million/billion utility company, in the words of L'Oréal "because they are worth it".
"Govt is subsidising infrastructure providers to the tune of £3000 to £4000"
I live in a rural area in Scotland, until recently we only had 20 Mbps down and 1 up. I had enquired to a specialist ISP about installing fibre and they quoted £7000 to do an estimate - which I interpreted as "please go away".
BT/Openreach came along and installed full FTTP - which I am very happy about but I did wonder how commercially sensible it was with us paying £50 a month or so...
One area -- in fact, the only area that I can think of -- where privatisation has mostly worked in the UK is the telecommunications market. Here the networks are in private hands, but the providers are forced to offer somewhat equitable access to their competitors, e.g. by sharing masts, poles and underground ducts. That, plus the relatively low cost to entry of setting up as a new player, seems to be enough to keep prices down and service levels up.
This wouldn't work for transport of or on rail, road, water or gas, because there's no realistic way to force different entities to share the same infrastructure; you can't reasonably set up two parallel gas networks, or run two independent sets of rails. In those cases I agree that we have experimentally proven that socialising the infrastructure was/is the most efficient option. Now we need a government with the political chutzpah to accept that.