On 30/10/17 23:28, Mick wrote: > The regulator does not hold the budget, central government departments do and > the regulator cannot (or will not) control abnormal profits privatised > utilities are making year after year. However, the regulator will engage > enthusiastically in the a theatre of regular reviews of market conditions, in > an attempt to convince consumers and tax payers the most gratuitous abuse of > power is kept in check.
Quite often that's the government's fault too ... The reason British Telecom made obscene profits for YEARS after they privatised was because they inherited terrible infrastructure that cost a lot of money just to keep going. And the reason it cost so much was that every time the General Post Office tried to put money aside to replace said infrastructure, the Government (the sole shareholder) declared a large dividend and took it away. The alternative was for the GPO to borrow, but every time they did that the Treasury said "that money is part of Government Borrowing. We're committed to reducing government borrowing so you're not allowed to borrow". So BT made gazillions because a brand new exchange, with a ten year warranty, probably cost about two years' maintenance of the exchange it replaced. And because BT were quite visibly cutting prices (not by much!) but the new infrastructure was reducing costs so much faster, their profits soared. Cheers, Wol
