From: djewell@rhea.trl.OZ.AU (David Jewell - Radio and Satellite Networks)
Subject: Re: Optus v AOTC.  The Facts. (was Re: Cream-Skimming)
Organization: Telecom Research Labs. Melbourne, Vic, Australia
Distribution: aus
Date: Tue, 15 Dec 1992 22:10:12 GMT

In article <6959@otc.otca.oz> brendan@otc.otca.oz (Brendan Jones) writes:
>> So the government has guaranteed a large slice of the pie for Optus.
>
>Not really.  They've just made it easier for them to reach a 30% market
>penetration.  The hope is that this will more rapidly introduce the benefits
>of competition (lower call charges, more responsive customer service, more
>innovative telecommunications products) compared to other deregulation
>attempts overseas (eg UK).

Interesting little FACT though that seems to be constantly overlooked by
most pro-competition types is that the MOST efficient Telcos in the 
world are monopolies, eg: Sweden.

>
>> I wish I could start a business under these conditions.
>
>You're not starting a business against the third largest enterprise in the
>country, with immensely powerful resources at its disposal and a cash flow
>that matches the GDP of small nations, and that *also* held a monopoly.

You forgot to add though that all of this "immensely powerful resource" palls 
into insignificance when compared with the resources of Bell South and Cable
& Wireless, the Optus owners.
Ever tried setting up a steel industry? Do you think that the government
would help with the same "level playing field" and 30% rule if you decided
to compete with BHP? Businesses are successfully set up against monopolies
(in particular areas) all the time without government guarantees of a slice
of the pie. That is if the monopoly is inefficient. Of course the more 
efficient the monopoly then the harder it is to compete with and the more 
government aid the new competitor has to have.
Belgrave, Victoria, used to have a couple of small supermarkets until
Safeway moved in with lower prices. Now Belgrave only has Safeway and
the prices there are much higher than elsewhere. Safeway now has a
monoploy in Belgrave and is using that monopoly to subsidize other stores
such as Ferntree Gully where there is still some other supermarkets. That's
competition, with the ultimate goal of getting a monopoly. If you
support competition then how can you also support government interference
in that competition. Let Telecom do what is necessary to compete, just
like you (and the government) let Safeway compete.

>> The foreign owners can't lose and we in Australia will be paying them.
>
>Yes they can.  They can fail to reach the 30% market threshold and yet still
>have invested huge sums in their network.  Telecom may prove to be a fierce
>competitor and slash Optus' projected revenues.  I'd call that losing.
 
The only way they will not reach the 30% target is if we Australians support
the Australian company (Telecom) and force the government to clearly show
that this 'competition' is based on dogma and not 'benefits to the country'.
Otherwise the rules will be constantly changed in favour of Optus. For example.
Optus offer a discount on the  route from Geelong to Melbourne, a high traffic
STD route. Telecom is NOT PERMITTED to match this competitive rate on this
route because the rules say that it must offer the same rate on all routes
of a similar distance. Optus does not have to. Is this fair competition???

>Brendan Jones  | ACSnet:  brendan@otc.otca.oz.au               | This space

Thanks
DJ...