From: summer@mullian.ee.mu.OZ.AU (Mark Summerfield)
Subject: Re: Cream skimming considered beneficial
Organization: Computer Science, University of Melbourne, Australia
Distribution: aus
Date: Sun, 13 Dec 1992 23:54:48 GMT

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

>Because it's a highly emotionally loaded term. The conotation is negative.
>If anyone is to blame for the "cream skimming" it's the Government which
>introduced competition. But if Telecom had been as wonderful as everyone
>is now saying (;-) there wouldn't have been a need to introduce competition.
>So let's blame Telecom for being silly enough to create the climate for their
>own demise.

The following is the abstract from a paper by Kenneth Davidson, Economics
Editor for _The Age_, and a member of the Press Gallery, Parliament House,
Canberra.  If you want to find the full paper, it is entitled "Competition
in Telecommunications - Causes and Consequences", and was published in
the proceedings of IEEE TENCON '92, Melbourne, 11-13 November 1992.

"The present structure of Australian Telecommunications is the creature of
an ideology (economic rationalism) whose high priests (Canberra 'econocrats')
were aided by a vacuous government which wanted to be seen as a vigorous
proponent of 'micro-econmic' reform, and fearless opponent of the vested
interests holding back telecommunications reform (Telecom and the ATEA).
The need to hide the looming $1,000 million Aussat fiasco in the second
telecommunications carrier license ensured that Canberra would avoid any
public examination of the real options for future development of the network
and the telecommunications industry.  The new structure will provide no
long term benefits for households attached to the network, and undermines
the development of an Australian world-class telecommunications equipment/
service industry.  The need to provide a sweetener to increase the value
of Aussat in the form of a Pay-TV license will have the effect of
undermining the profitability of free-to-air TV and the ability of the
commercial broadcasting industry to produce quality programming."

A fairly strong view (quite well supported in his actual presentation,
although the published paper is a little brief).  The point is, though,
that it is far from obvious that Telecom is either "silly", or responsible
for its own "demise".  Not that there will be any demise -- Telecom is
a far better company than its opponents give it credit for, and will
perform well.  Those of us who are arguing against the reforms do so
not out of a particular loyalty to Telecom (although there may be some
element of that), but in particular out of a belief that the old system
was *better*, both socially *and* economically, for Australia.  Telecom
can, and will, look after itself, and nothing in this discussion will
alter the changes that have already been made.  What *is* important is
what we believe, how well we understand and can support those beliefs,
and the ideas each of us take out into the world with us each day.
Some of us may one day be in a position to implement out beliefs, and
some perhaps already are -- I suppose each one of us does in our own
small way.

Mark.
          --------------------------------------------------------
              Mark Summerfield,  Photonics Research Laboratory
Department of Electrical and Electronic Engineering, University of Melbourne  
                ACSnet[AARN/Internet]: summer@ee.mu.oz[.au] 
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