A merger too far : Orange and T-Mobile

The story of the telephone has been one of great industry and invention. It is one of the defining and most important inventions of the last hundred and fifty years. When Alexander Graham Bell hit on the idea, I doubt he could have imagined the pervasive and powerful effect his gadget would have on the world. International calling, chat lines, calls to the moon, telephone lines used for sending digital data – just some of the amazing and fundamentally life and business altering uses to which the telephone has been put. No one can argue that communcation, and particularly the mobile phone symbolise and define our lives in 2009.

The news that T-Mobile and Orange are to merge is not the panacea that is being trumpeted by most of the popular press. Make no mistake, this bad news for the consumer and for innovation. The merger will decrease competition in the marketplace just at the time when we need more.

The new operation will own 37% of all UK mobile subscribers. Getting towards half, and putting it with an undoubted ability to control prices without reference to competition. At at time when the UK needs competative pricing to alleviate the worst sides of the recession, that sounds like a worrying notion.

T-Orange, or whatever the new entity will be called, will begin cost cutting by reducing the number of mobile phone masts. To environmentalists that might sound like a great idea. To those in the know about how the technology works, less masts means less capacity for mobile broadband dongles and data heavy smartphones, right a time when the direct reverse is what is needed.

The newly created mobile phone company will also likely want to reduce the cost of their call centre operations. Again, this comes at a time when neither T-Mobile or Orange have a strong reputation for excellent customer services.

Finally, and most compellingly, this merger does nothing to promote communications innovation. It will tie both companies up in legal and organisational red-tape for several years, diverting attention away from development of new products and services which would benefit consumers and partner businesses.

In all the proposed merger will deliver poor value for the british consumer. It should be opposed vigorously.

The unconvincing case for PR

All politicians need to be aware of the flaws of our electoral system. For the last twenty five years at least, British governments with large majorities have been formed when their share of votes cast has been less than 45%. Labour’s 1997 landslide, winning a majority of 179 seats was achieved with 43% of votes cast. Considering that generally less than 60% of the electorate vote these days, even at general elections, this means that practically strong and powerful governments can be formed with votes of around 25% of the electorate. The question of the legitimacy of this kind of government is regularly brought up. I have been considering my response to this. It is now especially important in the light of the recent expenses scandal. The commitment and moral fortitude of politicians and UK politics is under the spotlight, so it is reasonable to examine whether PR might provide a better way to be sure that our elected representatives are accountable to us. PR arguably creates a clearer link between the way we vote and them keeping their jobs.

There are a number of systems of proportional representation in use around the world today. A basic guide can be found at http://en.wikipedia.org/wiki/Proportional_representation . Every system of PR has its advantages and disadvantages but the ultimate aim is to strengthen the link between the proportion of votes cast and the resulting government. Some of the main systems used are Alternative Vote and Single Transferable Vote. AV is used in Germany, STV in Australia and Republic of Ireland. There are so many countries using forms of PR that proponents of the system denigrate our British system as archaic and one that exists solely to support the status quo and existence of minority.

Systems or proportional representation prevent votes from being “wasted”, as a vote for Labour can be in a Conservative safe seat (and vice versa with Tory votes in Labour heartlands). As well as ensuring that working governments have a working majority of votes from the electorate, supporters of the system also claim that smaller parties are able to take a greater (and proportionately fairer) part in the operation of government, rather than (as could be argued in the UK for all parties, other than Labour and Conservative) being ignored as part of the regular discourse. As with road pricing (see my earlier blog) I can see the obvious attractiveness of PR very quickly. Many members of the public (particularly Liberal Democrate sympathisers) agree that in order to strengthen the authority of our governments in these troubled times, PR needs to be implemented.

Having considered the debate on both sides, I remain unconvinced about the overriding benefits of PR. I understand them and agree about them in many cases, but in my view they do not constitute enough of a reason to move from our first past the post system, because of our current system’s proven and consistent ability to deliver strong governments without recourse to the horse-trading inherent in coalition. Proportional Representation seems to me centralise power of MP selection with the party machines who draw up the party lists and rankings. I cannot imagine that this would find favour in Great Britain, with our natural suspicion of party politics.

Proportional representation almost always destroys the link between the electorate and an individual MP, particularly where the alternative vote system is used. Surely in these troubled times we deserve a system which makes fully transparent which MPs represent which constituency. Without this we risk the further approbation of an electorate already circumspect about the real motives of their political representatives.

Most fundamentally the ability of PR to give extreme power to minority parties is concerning. The classic (and probably over-used) example is Hitler’s Germany of the 1930s but there are plenty of further instances from around the world : The rapidity of governmental change in Italy (a PR system) is not one that appears to merit replication. Much of the often seismic change in the landscape is created by small powers being lent coalition king making power beyond that justified by their electoral strength.

Any democracy must continue to review the success or failure of the way its governments are elected and constructed. At this point in time, the case for PR is narrow and unconvincing.

Road pricing – an expense too far?

Being an IT Consultant in my day job, I end up doing quite a bit of travelling up and down the UK. One thing you notice very quickly is that our transport systems are very far from perfect. Every year the traffic queues get worse and we all spend more and more time looking at the bumper of the car in front! Recently I have been asked whether I would support the idea of road pricing, which might ease congestion. As far as I can tell “road pricing” means toll roads, perhaps with a technology twist such as GPS tracking of vehicles, rather than the traditional toll booths where you hand over coins and notes.

I have thought quite a bit about whether I would support road pricing and whilst I can see some advantages, in my heart I really cannot support the idea for the moment. I understand the argument that pricing roads would allow the laws of supply and demand to better control access to the most popular roads at the most popular times. On the surface this is attractive. The marketplace has, over time, proved itself to be the best of a bad bunch of mechanisms for controlling access to finite resources. Why not the road network?

The reservations I have regarding road pricing are twofold : Firstly I believe we are taxed enough in this country. Labour have implemented over one hundred and fifty new taxes since they came to power. I could not in all conscience sanction any new device for extracting money from hard pressed families up and down the land. We pay our road fund licence and plenty of fuel duty, adding to that burden in these hard economic times is as implausible as it would be unpopular.

My central reason for objecting to road pricing is that the public clearly don’t want it. It was rejected as a proposal in both Manchester and Edinburgh. The Downing Street website was brought to it’s knees by nearly two million petition signatures, all against road pricing. So the views of the public at large are clear – we should pay for our roads by some other means. Trust in politicians is at an all time low so any move to destroy that trust further – by introducing measures known to be against the public will – will be met with even more of the kind of revolutionary vitriol we have already seen in relation to the MP expenses fiasco.

Politicians must, at least for the moment, resist the urge to try any further road pricing schemes. The outcome if they do not, will not be pleasant!

Public or private and does it matter?

I have been thinking a lot recently about what the continued low performance of the stock market and general economic downturn means for the age old Private vs Public ownership debate. Margaret Thatcher made great play of nationalising a large swathe of formerly public industry. From the early ninteties until around the turn of the new millenium this was, in most cases, looking to have been a shrewd move. The new private companies performed better and often provided great returns to share holders. Examples included BA, BT and British Gas. Whether customer service had markedly improved is open to question but certainly effciency savings had been made and management cost erradicated from the public purse.

However the performance of former nationalised industry needs re-examination. BA is in deep trouble, making losses, laying off staff. BT is more successful but is arguably only in that position because of their inbuilt monoploy over the copper wires that run around our country. British Gas enjoys one of the worst reputations for customer service of any large UK organisation. The jury is still out on whether large scale privatisation has been the success it may once have seemed.

In some ways BT, BA and the like matter less now than ever before and this is a good thing. They no longer enjoy anything like the monopoly power they once did. The public now have a degree of choice over who they fly with and who provides their phone. Privatisation has enabled competition and perhaps it is really this that is the true measure of success or failure. But there remain huge structural monopolies such as our privatised water and sewerage companies that can never easily or efficiently be forced. They have simply moved from being public geographic monopolies to private ones. A monopolist can set their own price and performance standards, so controlling the charges and efficacy of these industries needs to right at the top of our national agenda.

Public or private and does it matter?

I have been thinking a lot recently about what the continued low performance of the stock market and general economic downturn means for the age old Private vs Public ownership debate. Margaret Thatcher made great play of nationalising a large swathe of formerly public industry. From the early ninteties until around the turn of the new millenium this was, in most cases, looking to have been a shrewd move. The new private companies performed better and often provided great returns to share holders. Examples included BA, BT and British Gas. Whether customer service had markedly improved is open to question but certainly effciency savings had been made and management cost erradicated from the public purse.

However the performance of former nationalised industry needs re-examination. BA is in deep trouble, making losses, laying off staff. BT is more successful but is arguably only in that position because of their inbuilt monoploy over the copper wires that run around our country. British Gas enjoys one of the worst reputations for customer service of any large UK organisation. The jury is still out on whether large scale privatisation has been the success it may once have seemed.

In some ways BT, BA and the like matter less now than ever before and this is a good thing. They no longer enjoy anything like the monopoly power they once did. The public now have a degree of choice over who they fly with and who provides their phone. Privatisation has enabled competition and perhaps it is really this that is the true measure of success or failure. But there remain huge structural monopolies such as our privatised water and sewerage companies that can never easily or efficiently be forced. They have simply moved from being public geographic monopolies to private ones. A monopolist can set their own price and performance standards, so controlling the charges and efficacy of these industries needs to right at the top of our national agenda.

Digital Britain, Analogue report writer?

Well well. It’s finally here, the Digital Britain Report.

http://news.bbc.co.uk/1/hi/technology/8102756.stm

It is not really particularly riveting reading. We get gems like “The Internet is a truly global network connecting almost two billion users
worldwide.”… You could knock me down with a feather. It’s global is it, this internet thing?

On a more serious note, the report seems to have been written from some kind of dream world where things aren’t as they are, but as we would like them to be, if only for a bit of clever government policy. That’s just not reality. There is a commitment to do more on rural broadband by taxing existing users 50p. Fair enough but that won’t raise much revenue at all, so it won’t help much. Equally there is no real discussion about the true nature of intellectual property, just bold statements like “The Government believes piracy of intellectual property for profit is theft and will be pursued as such through the criminal law”. Great, I wish the government good luck getting inside encrypted bit torrent files to figure out exactly who is sharing what. A law that is unpoliceable (or at least getting that way with the way technology is going) is not worth the paper it’s written on.

I do welcome discussion on the future of DAB Digital Radio which has not exactly been a success in the UK so far. Many stations have pulled out and the report places the responsibility at the door of the BBC to extend the reach and diversity of programming. The implication is that the prices of the radios will need to come down more quickly than they have up to now. I hope some of the aspirations of the report in this area do come to fruition because DAB could be so much more than it is at present.

Overall the Digital Britain report takes many pages to arrive at some fairly bland and predictable conclusions.

Bottling the Royal Mail

Looks like Gordon Brown may be about to ditch the idea of selling part of the Royal Mail into private hands. This is an interesting development and should be monitored closely because it may be the defining moment where Brown finally gives up any notion of following Blair’s modernisation agenda.

In private hands or public, the Royal Mail is a sick, sick patient in dire need of change, updating and re-invigorating. I am sure there is many a Labour supporter ready to make the case that Royal Mail has been starved of funding for too long to cope, but I would beg to differ. Funding crisis or no, my experience of Royal Mail staff has been almost uniformly low quality. From post men who think it is fine to litter the roads and pavements with rubber bands, to sorting offices with the sort of operating practices and opening hours I would associate with a business running in the 1930s. Something drastic needs to happen to the Royal Mail to bring it into line with modern thinking and technology. Private sector forces might bring exactly the right kind of rigour, so long there is flexibility to retrain or exit some of the staff currently stopping the organisation performing more adequately. If Gordon Brown bottles this one we will know he is finished intellectually as well as electorally.

Goodbye Jacqui

This short blog posting is just a quick one to remark on the impending departure of our Home Secretary, Jacqui Smith. In a small way I  do feel sorry for her. Compared against Moat Cleaning and House Flipping, the sums involved in the rental of questionnable films seem small. But it has been enough to do for her job. My personal view is that Mrs Smith would have got a better hearing from the media had she been a better Home Secretary. But one cannot ignore her utter failure to get a real grip of the issues of the day. Her continued support for ID card schemes is directly at loggerheads with that of the majority of the public. At a time when the UK needs tough decisions to bring finances back on track, this multi-billion pound white elephant continues to look like pure extravangant waste. Similarly the white washing of the heavy handed police approach to the G8 summit has not gone unnoticed.

Good bye Jacqui. I  am not sure you will be much missed. Hopefully our next Home Secretary will try to achieve a more of a fine grained approach to the balance between civil liberties and government desire to control.

The death of writing as we know it

I have been thinking a lot recently about what the emergence of devices like the Amazon Kindle and Sony E book reader might mean for the future of publishing You may not agree yet, but these are significant devices. The first commercially viable mechanism for reading long form publications, outside of PC and laptop screens (which are not really portable like a real book). For hundreds of years, since Caxton’s workshop, the printing press has created and propagated our ability to communicate far beyond the geographically and temporally limited spheres of our existence. The printing press has become synonymous with freedom, openness and a desire to share our thoughts, opinions and dreams beyond our immediate reality. I have never met a single person who has ever spoken against the existence of print media. It is universally regarded as “a good thing”. And it is at real threat.

Coming down the track any year now is the demise of the printing press. I realise that the death of print has been predicted before. But now, as never before, can we see the exact murder weapon and precise method of mort. Amazon’s Kindle provides a paperback size device, with huge battery life, able to simulate very reasonably the experience of reading a novel. Lightweight and capable of storing over 100 books at any one go, the Kindle is still expensive (£300+ in the US). When you read a book on the kindle you are reading a publication that has never touched print.

Amazon charge for the Kindle and for the E-books downloaded to it and for the moment this seems excellent for the future of print media. A way to sell books without the paper waste, perfectly control the distribution channel and reduce sales cost all at the same time. So one might think that authors should take heart, safe in the knowledge that their profession is secure from the march of technology.

The problem is that e-books are so easily copyable. Just as with music, films and software, words are just bits and bytes to a computer. Computers are built to copy bits and bytes as fast as possible. So my concern is how authors will get paid once books are wholly electronic. Already, e-books like the Harry Potter series are traded for free on internet file sharing sites. The number of files on these sites continues to grow exponentially. At the moment I should not imagine that there is much revenue lost to this because so few people own a Kindle or similar device capable of displaying these kinds of books for comfortable reading. But the day is coming when that will change. Files will be traded with the same degree of freedom and lack of care for copyright as MP3 files are traded today. Want to read a book?.. Go and get one for free from any one of a number of file sharing web sites. So I come back to the same question. How can the author make money?

I am of two minds about whether the future difficulty of making good money from writing books is going to be a problem. On the one side I feel that (as with music) there are some rather bloated authors out there (Tom Clancy, Wilbur Smith etc) for whom grinding new books out seems to be just about getting paid. If the revenue dries up, they will most likely stop and I am not sure the greater sum of world art will be any the poorer. However I am concerned that fledgling start-up authors will have much less incentive to begin writing. The economic imperative is an important one. At least with musicians, there is the prospect of getting paid via concert ticket sales. How could a writer get paid if not through selling books? Here are my ideas :

- Patronage – Wealthy sponsors pay authors to ply their trade.

- Sell signed printed “unique” copies of books

- Conduct lecturing or book reading tours

Anyone got any other ideas?.. Because I don’t actually think the above ones add up to very much at all and I would hate to see such a vital part of our culture disappear.

The keys to the medicine chest and the safe

The greater the clarity about how MPs of all political hues have spent taxpayers’ money on themselves is, of course, valuable. For the first time, we can see the individuals who talk more about saving public money than live that reality themselves. But I am a touch nervous that in the furore of accusations and counter-accusations about the rightful expenditure of public money, the media and the more pious amongst politicians have become a little short-sighted.

There is another area of public sector provision where less translucency would bring on valuable debate : that of GP surgeries. To the best of my knowledge many GP surgeries are run as a closed shop in terms of financial information open to public scrutiny. Questions are unanswered – such as which GPs and partnerships have claimed what expenses for what items from the PCT? How much ‘profit’ has any one surgery made in a year, and what has happened to that money? Is there value in the commissioned services provided by GPs to their communities?

I came across the this issue recently in my work as a Borough Councillor, trying to explore what income and outgoings might motivate a GP surgery to act in a certain way (in this case a planning permission case). At every turn I was blocked in my quest to get information. Most GPs are certainly paid a greater salary than MPs, and some, despite working in the envelope of a ‘private’ practice are still funded by monies channelled from the Treasury; therefore full accountability for expenses and allowances claimed from the NHS purse should be paramount. Without that information, the public has no option but to trust GPs with the keys to the safe as well as the medicine chest.