How SBC (AT&T) Pillaged South Africa's Economy 270
Kifoth writes "For 8 years, SBC and Telekom Malaysia controlled South Africa's only telecommunications company, Telkom. Telkom had a government granted monopoly in order for it to connect the large parts of South Africa that had been neglected under apartheid. Instead of helping, SBC abused their position and raised Telkom's prices to be among the highest in the world. The billions they made here ultimately went to fund their AT&T merger. From the article: 'SBC, described as "congenitally litigious", is said to have played a major role in the failure of South Africa's telecoms policy to develop a competitive telephone service. Under SBC's control Telkom not only failed to meet its roll-out obligations but behaved "as a tax on industry and a drag on economic growth."'"
All Monopoly = Bad (Score:3, Interesting)
Re:All Monopoly = Bad (Score:2, Interesting)
as if (Score:1, Interesting)
I know Verizon's coverage is excellent, but can anyone attest to their business practices?
Re:Then Blame the SA Government (Score:3, Interesting)
Re:Hmm... (Score:4, Interesting)
Let me explain this to you...the poor don't bankroll politicians campaigns, the rich do.
Golden Rule
Most politicians in most countries are quite corrupt.
I am sure south africa is no exception to this.
The world needs a way to monitor the affairs of their politicians,
because for example here in the states, they often spend more to
get into office than they will receive as a paycheck the entire
time they are in office.
The math doesn't add up.....until....you account for under the table
gifts to them, their children, thei offshore accounts, numbered accounts
in switzerland, etc etc.
As Open Source is good for code, the world needs Open Government,
where those who serve are well paid and jack assery like this
I am about to mention is considered a crime, and sent to court accordingly:
http://www.tispa.org/node/14 [tispa.org]
$200 billion rip off right here in the USA.
The telecoms have a history of total theft, and nothing short
of destroying them totally and putting Co-ops in their place
has any chance of succeeding against this carpet baggers
of the new generation.
The WorldCom's , the global crossings, the Bells, Adelphia,
it just goes on and on.
It needs to be a regulated utility, and when it is foudn they
ripped us off "intentionally" they need their asses fined into oblivion.
Re:As a South African ... (Score:4, Interesting)
Re:government monopolies != market libertarianism (Score:3, Interesting)
What do you expect would happen when the government jails anyone who tries to compete? Yes, it is the government's fault.
Why? The government-granted monopoly was bought by a free market of greed and corruption. I'm being told that it's just the government's fault for being anti-consumer. The corporation being anti-consumer is just part of the formula for being pro-consumer. This contradiction runs to the core of their doublespeak.
I've been trying to make your exact point that free market libertarianism is incompatible with monopoly business structures as being unethical, but that's not the message the libertarians are telling me. It's just always the government's fault to them when the libertarian formula breaks down (as it often does). Even though it's the predicted end of unrestrained capitalism, it's the government's fault it was not restrained. I just want to know from the libertarians just what is allowed to be limited by the government. I know the philosophy is to limit "harm", but how is lack of communication (as in this case) truly a harm in their ideology? Are we allowed as a democracy to weigh it based on the situation? Are de-facto monopolies outlawable? To most FML's, the answer I get is often no. Maybe not with these guys, I don't know yet. Perhaps one of them will want to espouse a consistent philosophy in a comment.
And oddly enough, to the "free-market" libertarians, I'm "stupid" for thinking differently than they do. When I call an insult that I'm stupid as "naive", I'm then moderated as flamebait. Where are the mods on the clearly insulting posts? If the FML's had a point, they'd stick to the discussion and not try to attack my intelligence with petty insults. Since responding to the insults is worth down-modding, I'll probably not bother responding to posts with petty insults anymore.
Re:Hmm... (Score:4, Interesting)
What you described in not a truly Free Market, as in Pure Competition. You are showing that a regionally sanctioned Monopoly is still a Monopoly just not over the entire country.
It's analogous to each US State having their own single controller over basic services. You will find people proclaiming that there is no Monopoly. They list 50 different companies, yet will quickly change subject when they are challenged on the fact that a real Capitalist system would demand/require that all 50 competitors have equal access to all 50 states.
When that happens, and fails then I'll be willing to work on a more advanced open system that has safeguards from a government point-of-view.
Since we don't have any sort of real Capitalist system in the world we should stop the age old war of Capitalism vs. Socialism.
I'm personally sick of the fact that I've got only 1 cable company to choose from [Comcast] and only 2 major Satellite companies [DirecTV and DISH] to choose from where I get my digital media.
I'll not be impressed until there are at least 10 competitors in the region to fight for my money.
This goes for the auto industry, telecom industry, and any other industry that isn't the regulated like one's local PUD.
I've got one major telco to work with that isn't a cable provider: QWEST.
Ma Bell was broken up into 12 Regional Monopolies.
Reagan blew it and that's no surprise.
Ma Bell should have been broken up into 12 companies independently competing with each other and other new vendors across the U.S. Unfortunately, they decided to subdivide the backbone of the existing hard trunk by region and didn't invest into making a generic backbone with vendors running their own services to the trunk to then work across the entire backbone.
Services should separate the vendor, not the total fiber layed.
People would rather talk about being a Capitalist Republic instead of demanding one.
Re:As a South African ... (Score:2, Interesting)
SBC isn't *pure* evil (Score:2, Interesting)
In fact, it did South Africa a couple of favours. When it took up shareholding Telkom was a bureaucratic nightmare. Its technology was 18th century. I grew up with manual exchange telephones - the type where you wind a handle to reach an operator. And this up to the mid-90s.
Today we have a sophisticated ATM network with multiple national redundancy. Telkom has mature product offerings. The intelligent network initiated under SBC managers is a thing of beauty. Also, the company has a fantastic legal department
Oh, there are many things wrong, and I have called for the heads of government ministers (and Jim Meyers, funnily enough) myself. The last mile is a mess, because Telkom wouldn't spend on it.
But SBC did some good. Did South Africa overpay for that? Absolutely. But it's not like we received nothing in return.
Re:Actually, since you mention Adam Smith (Score:3, Interesting)
Wow, very informative!
You're right; with my education (Environmental Engineering), I didn't know much about Adam Smith bwyond the "invisible hand" reference. It looks like he would have gotten along much better in modern-day Canada than the USA.
Since the discussion is a day old, let's go off topic a bit.
Since you mention infrastructure, there is a school of thought proposed by Paul Hawken, Amory Lovins, and others, that roads and other automotive-related infrastructure should not be funded through income taxes. The idea behind the current funding system is that everyone benefits from roads, so everyone should pay for them. Don't tell Dubya, though; that sounds pretty socialist. :)
Hawken et al's alternative is to fund this infrastructure from taxes at the pump. That way, those who decide not to drive, or who drive more fuel-efficient cars--or even those who live close to work--won't pay as much as those who drive Hummers 50 miles from the 'burbs every day. The system will give people some control over how much they fund infrastructure. It will encourage people to live closer to work, and encourage car companies to produce more fuel-efficient cars.
Of course, the problem with converting an existing system is that the government would find excuses to add the gas tax while not lowering income taxes. But the Hawken idea goes further: eliminate all taxes on income and labor. Such taxes make labor artificially expensive, while subsidies make resources artificially cheap. Tax the stuff, not the labor, and industries would shift to more labor-intensive, less resource-intensive processes. In other words, more recycling of existing stuff, less extraction of virgin materials.
A lot of people don't see the need for such a shift yet, but it's coming. We are consuming natural resources much faster than they can be replaced. Old-school economists deny that a resource shortage exists because prices are so low. But part of the reason for the low prices is that resource-based industries are heavily subsidized--even the fact that roads are funded through income taxes amounts to a subsidy of the oil industry because it gives the same level of service to those who cause more wear on the system by driving larger vehicles.
The world economy has racked up huge recurring bills, and is gleefully paying them with its debit card, blissfully unaware that its bank balance is so low, giving no thought to what will happen when the account is empty. And there is no such thing as a credit card for natural resources.
Re:Actually, since you mention Adam Smith (Score:3, Interesting)
While the more frugal of citizens might see a reduced impact on their wallet, more than likely any savings would be quickly eaten up by increased costs on the products they purchase.
Unless they buy only from local suppliers, who normally are already more expensive due to their inability to deal in the same volume as national suppliers.
Of course, since the vast majority of the tax base in most locations is not from the citizens but from the corporations that work there, this might have a positive economic effect on the area, up to the point where it becomes infeasible for an outside company to compete with the local ones and we suddenly revert to pre-interstate level commerce where the majority of the products you and I take for granted today are simply not available for purchase as we don't live in an area that can produce them.
Or at least, that's how I see it playing out.
Re:Actually, since you mention Adam Smith (Score:3, Interesting)
That's why I went into what Adam Smith says, rather than whether he's right and wrong. I'm a bit more Keynesian in my personal views of it, but again I'm not an economist, so take it as no better or worse than a taxi driver ranting about what the government should do.
That said, hmm, being in Europe, more exactly Germany, we already pay a tax at the pump, though it doesn't completely replace other kinds of taxes.
Superficially, the main change that can be noticed, is that here small cars and Diesel cars (even after tax, Diesel is cheaper than Gasoline) are a _lot_ more popular. It's no shame even for a relatively well-to-do IT guy to be seen in a small fuel-eficient car, though a lot still go for the sports car image. Though even there, you can buy all the way to sports cars and executive cars with Diesel engines. But, anyway, you still see plenty of small cars on the streets, and SUVs never got too popular.
Another difference here, although I couldn't say whether it's the policy or fuel prices, is that public transportation is ubiquitous, and a lot of people take the bus or light rail instead of driving their own car.
Also, all neighbourhoods are built with the assumption that you must be able to (A) walk, and (B) get access to some kind of public transportation.
There's also a lot less of a cultural drive to move to some sparse suburb. In fact, quite the contrary, a lot of my well paid coleagues actually prefer to live in the middle of a populated city. Some even commute so they can live in an even denser place. Of course, that's not just fuel prices, but also a matter of (A) a lot lower criminality, and practically no inner-city crime problem (if you're going to get mugged, unlikely as it is, it's no different in the inner city) and (B) land costs. We have a lot less free land down here, and there are even whole areas (e.g., the NRW) which are almost a contiguous metropolis.
Of course, even in those factors, it's more complex than just the taxes. A lot of other policy decisions influence it indirectly, to various degrees. E.g., the better social security and more reasonable GINI index than the USA mean that a lot less people face a choice along the lines of "mug someone or starve".
Another thing I notice is that shops are a lot more distributed inside the city, instead of being concentrated in some super-mall that you have to drive to. From most places you can just walk to the next place where you can get the groceries. I'm sure the fuel prices played _some_ role there, but it's also a matter of policies and lobbying. In France, for example, they seem a lot more fond of malls outside the city, although they pay the tax at the pump too.
Whether other more subtle changes exist... I wouldn't know, and I'm not qualified enough to judge.
So basically all this was just a very verbose and roundabout way of saying "beats me."