From: summer@mullian.ee.mu.OZ.AU (Mark Summerfield)
Subject: Cream skimming considered beneficial?
Organization: Computer Science, University of Melbourne, Australia
Distribution: aus
Date: Thu, 10 Dec 1992 21:50:09 GMT

chris@suite.sw.oz.au (Chris Maltby) writes:

>There's no dount that both these companies are in business to make
>profits, as is AOTC (but not the government). So it's exceedingly rude
>to label them as "cream skimmers" - that's business.

I personally find if very hard to accept that certain services *have* to
be subject to the "ethics" (NOT!) of "normal business practice".  Examples
of such services are provision of power (electricity & gas), communications
and "essential" transport (we could probably quibble all year about what
constitutes "essential", but I think that a metropolitan public transport
system is, and that a business class commercial airline service isn't,
and that there's a large grey area in between!).

>If what is really meant is that AOTC is somehow more warm and furry

There's nothing especially "warm and furry" about Telecom, however my
personal experience is that, on average, Telecom shows a greater social 
consciousness in the way it conducts its business than, say, IBM...

>because it cross-subsidises its loss making businesses then you need
>a crash course in capitalism. It's just stupid to do this, or perhaps
>it has an owner who doesn't care about business objectives much.

By "business objectives" you seem to mean only the bottom line.  Does
the end always justify the means, within the bounds of the law?  In the
airlines area, to what extent is it acceptable, for example, to
compromise Australia's exemplarary safety record in order to provide
cheaper fares and be "competitive"?  I realise that the argument exists
that an airline with a poor safety record will lose business, however
the U.S. example clearly demonstrates that the public are prepared
to trade off security against cost.  There is probably a niche for
an airline which has a slightly worse reputation, but which is cheaper
(look at the international airlines if you don't believe this).

This kind of compromise is "normal business practice" -- people will
buy inferior consumer products if they are cheaper.  It's the "you
get what you pay for" argument.  You buy the Goldstar TV instead of
the Blaupunkt, or the CDC CD player instead of the Sony.  The question
is, should this kind of practice even be *allowed* in certain areas
of commerce?  Sometimes it is human lives and livelihoods at stake --
how do you account for this on the bottom line?

>One of the great benefits I think Optus (and Compass) will do in
>Australia is bring the hidden cross subsidies in our transport and
>communications industries out into the open where we can examine the
>cost/benefit ratios...

Personally, I am hoping that I don't live to see the day that Australian
people are penalised because they live in remote areas, and they want,
or need, to communicate with other human beings.  For this situation
to arise in the late 20th, or 21st century would demonstrate the ability
of greed to triumph over people's humanity.  I can see nothing wrong with
using the profits from intercity trunk lines and mobile services to
cross-subsidise the affordable provision of telecommunications to
remote areas.  The current situation *proves*, beyond any doubt, that
it is entirely possible to provide an efficient, affordable service
to everybody in the country, *despite* the enormous distances involved.
I hope that competition doesn't change this.

With the fanatacism of religious zealots, the economic rationalists are
imposing changes upon a system which was functioning perfectly well.
What ever happened to "if it ain't broke, don't fix it"?  Where are
the guarantees that the new system is "better"?  It seems to me to
be a massive experiment, and it can't be undone if it fails.  And, if
it has to happen, why is it happening in such a way that so many of
the benefits are being handed to multinational companies at the expense
of Australian companies, at a time when Australia can least afford it?

Mark.
          --------------------------------------------------------
              Mark Summerfield,  Photonics Research Laboratory
Department of Electrical and Electronic Engineering, University of Melbourne  
                ACSnet[AARN/Internet]: summer@ee.mu.oz[.au] 
          --------------------------------------------------------
   "This terminal is no more. It has ceased to be. It's expired and gone
    to meet its maker. This is a late terminal. It's a stiff. Bereft of
     life, it rests in peace. If you hadn't nailed it to the bench, it
      would be pushing up the daisies. It's run down the curtain and
            joined the choir invisible. This is an X-Terminal!"