The Opposition must be realing a bit in its pursuit of NBN matters. Their determinatio to pursue the Government over the processes for the NBN has led to two reports, one from a Senate committee and one from the ANAO.
The first report was from the Senate Standing Committee on Finance and Public Administration on Independent Arbitration of Public Interest Immunity Claims. This report ultimately arose from the demand from the Senate that the Government provide to it the report of the NBN expert panel. The government claims public interest immunity from providing it. The independent and Green senators, with coalition support, initiated this inquiry to determine whether the Government should have to undergo some sort of independent process to judge that claim.
The committee, chaired by a Liberal has recommended against that course of action. That should lead to the coalition backing down on its demand for the assessment report.
There might be more joy in the report of the Australian National Audit Office into the NBN process.
Most importantly the ANAO puts paid to any suggestion there is some cover up in not releasing the Expert Panel report, noting at para 25 "The conclusions and recommendations in the Panel’s Evaluation Report are supported by appropriate evidence. The Panel’s published observations of the process generally represent the reasons for the non selection of a national proponent, as well as provide some advice to the Government on policy options for going forward."
The report continues at para 28 to say, "Despite the RFP process’s complexity and short timeframe, the Panel and the department conducted the formal process well, within the parameters of the Government’s broadband policy and in accordance with the CPGs."
Some other parts of this report I find particularly enlightening though.
The first is from para 13 - "The Government’s approach was to pursue a process that maximised competitive tension between potential proponents and promoted innovation to achieve the best outcome and best use of up to $4.7 billion in government funding." I do not understand how anyone could think that "competitive tension" was the right objective. The major protagonists - Telstra and the G9 or FANOC - would have needed to become customers of the winner. That is not a logical model.
The report spends a great deal of time on the issue of "regulatory flexibility." At para 29 they note "requesting proponents to outline their preferred regulatory environment for their NBN was unusual for an RFP process and made a complex commercial transaction considerably more complicated."
The difficulty for the coalition in pursuing either of these is that the idea of competition for the right to build the network was the coalition's when in Government, as was the idea of "regulatory flexibility". Indeed the coaition just started to run a tender for the regulatory regime before the election was called.
So, back to square one. Tny Smith can call them Chaos Conroy and Reckless Rudd to his heart's content, but at the moment the record shows their only failing was to continue some processes Helen Coonan started.
Thursday, February 04, 2010
Property rights and the law
One of the important strands of economic theory has been the "law and economics" movement. It has two strands - one that comes from economics as part of institutional economics, the other comes from the law and rationalises the development of common law as an economic process.
The first of these is especially associated with the work of Douglas North and finds it greatest expression in strands of development economics that says you can't get development until you get processes in place to define and protect property rights.
The second is most associated with Richard Posner who argues the common law reflects a process of choice to support economic efficiency. It is a case partially well made in analysing the development of the common law of trespass (or tort) and contract.
But it all falls apart a bit in the real world, and especially in relation to the role of the state. In particular the state takes on the role of the enforcer in relation to actual property possession, but only provides the arena for the enforcement of the property rights inherent in contract.
The new world of a Digital Economy has placed some constraints on this model. The decision today in Roadshow v iiNet highlights one of these. The law has created a concept of copyright but it is largely up to the holder to enforce their rights. In the action the court found that there had been infringement, but that iiNet had not, as claimed, authorised it.
The question left for the rights holders is very much one of what use is the (property) right if I have no means to enforce it. It is really, really hard for them to do so. In physical property we don't leave it to the individual to enforce their own right, we have a police force and public prosecutor. Without them there would not be effective enforcement of the property right in physical property.
On the flip side one issue that plagues e-commerce is fraud. Fraud is a crime, and hence does fall into the purview of police and public prosecutors. But it is difficult to investigate and prosecute, and many firms find the enforcement inadequate.
Our system has only two models, private enforcement or public enforcement through government agents. Is there a case for a different model, of a "club" good in enforcement?
The first of these is especially associated with the work of Douglas North and finds it greatest expression in strands of development economics that says you can't get development until you get processes in place to define and protect property rights.
The second is most associated with Richard Posner who argues the common law reflects a process of choice to support economic efficiency. It is a case partially well made in analysing the development of the common law of trespass (or tort) and contract.
But it all falls apart a bit in the real world, and especially in relation to the role of the state. In particular the state takes on the role of the enforcer in relation to actual property possession, but only provides the arena for the enforcement of the property rights inherent in contract.
The new world of a Digital Economy has placed some constraints on this model. The decision today in Roadshow v iiNet highlights one of these. The law has created a concept of copyright but it is largely up to the holder to enforce their rights. In the action the court found that there had been infringement, but that iiNet had not, as claimed, authorised it.
The question left for the rights holders is very much one of what use is the (property) right if I have no means to enforce it. It is really, really hard for them to do so. In physical property we don't leave it to the individual to enforce their own right, we have a police force and public prosecutor. Without them there would not be effective enforcement of the property right in physical property.
On the flip side one issue that plagues e-commerce is fraud. Fraud is a crime, and hence does fall into the purview of police and public prosecutors. But it is difficult to investigate and prosecute, and many firms find the enforcement inadequate.
Our system has only two models, private enforcement or public enforcement through government agents. Is there a case for a different model, of a "club" good in enforcement?
Wednesday, February 03, 2010
Abbott-stinance and Monckton-ing
Breakfast Politics linked the Oz's story on Tony abbott's climate change policy with the words No cap, no compo & little abstinence in Abbott's climate plan.
It made me think of Tony's approach in another matter that was important to his faith wherein he also couldn't practice abstinence, in that case leading to the story of the child who wasn't. Is there a pattern forming?
This suggests a new word "Abbottstinance" which is when you profess that you will give up something, but never actually do!
Meanwhile why is it the opposition can't get their heads around the difference between putting a price on carbon and a tax? And exactly how does Tony now attack any part of the deficit when in his words he is opposing a tax and just wants to spend money on climate change.
There is about a 10% chance he could be successsful with a Bush-esque strategy - talk fiscal conservatism but only pracctice profligacy.
How the Government responds to Abbott will define the outcome. What they have to avoid is treating Abbott like some kind of lunatic. Parodying your opponent doesn't work, just look at Barnaby Joyce's ongoing popularity. The coalition didn't ever target the madness that was Latham - they just gave him space to do it.
This brings me to the justified criticism today by Andrew Bolt of the way what he calls the "warmists" have dealt with Lord Monckton. He focuses on some of the gang tackle approaches and in particular writers who use his (disease based) appearance as a point.
It took Paul Sheehan in the SMH on Monday to point out the idiocy of the claim that Monckton describes himself as a Nobel Prize winner. He actually claims this as sarcasm about the fact the whole IPCC won the Nobel Peace Prize. (Which I've previously described as a farce.)
I know how hard it can be to argue with a personwho won't accept the premise of your argument. But that is not an excuse for degenerating into mocking the person. Worse, mocking will backfire.
So my other new word is "Moncktoning" which is to lose and argument by trying to mock your opponent rather than engage with them.
It made me think of Tony's approach in another matter that was important to his faith wherein he also couldn't practice abstinence, in that case leading to the story of the child who wasn't. Is there a pattern forming?
This suggests a new word "Abbottstinance" which is when you profess that you will give up something, but never actually do!
Meanwhile why is it the opposition can't get their heads around the difference between putting a price on carbon and a tax? And exactly how does Tony now attack any part of the deficit when in his words he is opposing a tax and just wants to spend money on climate change.
There is about a 10% chance he could be successsful with a Bush-esque strategy - talk fiscal conservatism but only pracctice profligacy.
How the Government responds to Abbott will define the outcome. What they have to avoid is treating Abbott like some kind of lunatic. Parodying your opponent doesn't work, just look at Barnaby Joyce's ongoing popularity. The coalition didn't ever target the madness that was Latham - they just gave him space to do it.
This brings me to the justified criticism today by Andrew Bolt of the way what he calls the "warmists" have dealt with Lord Monckton. He focuses on some of the gang tackle approaches and in particular writers who use his (disease based) appearance as a point.
It took Paul Sheehan in the SMH on Monday to point out the idiocy of the claim that Monckton describes himself as a Nobel Prize winner. He actually claims this as sarcasm about the fact the whole IPCC won the Nobel Peace Prize. (Which I've previously described as a farce.)
I know how hard it can be to argue with a personwho won't accept the premise of your argument. But that is not an excuse for degenerating into mocking the person. Worse, mocking will backfire.
So my other new word is "Moncktoning" which is to lose and argument by trying to mock your opponent rather than engage with them.
Tuesday, February 02, 2010
On democracy
I have had cause recently to blog about the difference between a republic and a democracy, at least in the eyes of the early US political theorists.
At the same time I could write about the number of books that make an assumption that political democracy was meant to be only a pathway to economic democracy (as an example Paul Fot's The Vote). It is in this context that the reaction to democracy can be understood - not that letting people have a vote per se was a bad idea but that once you gave the poor a vote wouldn't they just vote for economic redistribution.
Two items on Business Spectator today take the old fashioned concern for the perils of democracy too far. First Robert Gottliebson ponders the question of democracy devoring itself. Under this thesis Government's are evidently making "populist decisions" that risk our economic well-being.
The evidence offered isn't extensive. It included "The other day I was talking with the chief of a major global company who ranks the rise of international populism as the greatest challenge he faces." The two areas of argument offered for Australia are Industrial Relations laws that "take us back 25 years" and "considering a resources rent tax". The former is an assertion about consequences not yet proven, in fact you would be hard pressed to find many real business people as opposed to commentators actually worried. The second is only a worry if the state taxes supposed to be removed aren't. Which really you could have said about the GST in 1998.
He then suggests we are attacking banks, but it is only because we "villify" them over their interest rate hikes. A better response than to suggest that democracy is a problem might just be to defend the banks like I did.
The perfectly rational response in the US of limitting the economic activities of banks and questioning awarding bonuses to loss making execs is regarded as populist rather than, as I see it, merely rational. If the move against the banks was as merely populist as suggested, and so easy to pull off, wouldn't Obama have done it BEFORE the Senate by-election, not after?
The real giveaway is the para;
A couple of decades ago politicians realised that they had to be careful when putting the business community offside to please voters. It is still early days, but the signs are there that the lessons of the past have been forgotten.
That is just bull dust. Government learnt it had to make sure it did not suppress economic activity. Getting people "offside" ain't the issue.
Karen Maley got more philosophical on the topic of the illusion of leadership. Kevin Rudd and Barack Obama are both supposedly "long on rhetoric, and short on tough policy initiatives".
Geez I don't know. Was reaching into the fiscal bag and driving up a deficit that you as Goverment have to deal with an EASY option? Was any of the decisions, be it to intervene and save a bank, or to not and let one go down anything other than "tough".
In case anyone missed it Obama inherited a Federal budget deficit of extraordinary proportiions because Bush was trying to "defund the left" by leaving nothing left to be spent. So is Obama prioposing to increase some taxes to correct the budget defioit anything other than a tough decision? It sure isn't rhetoric.
The argument in Australia comes down to this;
The big gains in productivity growth that we witnessed in the 1990s were a direct result of the huge economic reforms undertaken by the Hawke/Keating government. Initiatives such as pulling down the tariff barriers, floating the dollar, deregulating the financial system and privatizing inefficient government monopolies lay the ground-work for huge improvements in productivity. In contrast, the Rudd government’s commitment to lift spending on infrastructure and education involves a good deal of rhetoric. And very few tough decisions.
Firstly micro-economic reform is a bit like creating growth by lowering interest rates. You get to a point where you can't go any further - you can't have a negative interest rate.
I think the one reform we could pursue would be to start breaking up some of the inefficient private sector monopolies and oligopolies, but the BCA that used to be the champion of micro-economic reform is now the oligopolists club where "free market" means the right to maintain market power.
Hmm, now if you can't get magic efficiency benefits by creating more market where can you. Oh how about improving human capital (by education) and social capital (infrastructure).
It remains a fact that the Howard Government's biggest reforms in transport infrastructure was to take on the unions to improve crane rates at container terminals. We became more efficient at processing imports. But not a cent was spent on building infrastructure to service exports.
Give me Rudd's "rhetoric" over that kind of action any day!
Meanwhile can we get over the obsession with "leadership", "tough decisions" and the dislike of "populism". The reactionaries mightn't have noticed but democracy works, but only while you believe in it!
At the same time I could write about the number of books that make an assumption that political democracy was meant to be only a pathway to economic democracy (as an example Paul Fot's The Vote). It is in this context that the reaction to democracy can be understood - not that letting people have a vote per se was a bad idea but that once you gave the poor a vote wouldn't they just vote for economic redistribution.
Two items on Business Spectator today take the old fashioned concern for the perils of democracy too far. First Robert Gottliebson ponders the question of democracy devoring itself. Under this thesis Government's are evidently making "populist decisions" that risk our economic well-being.
The evidence offered isn't extensive. It included "The other day I was talking with the chief of a major global company who ranks the rise of international populism as the greatest challenge he faces." The two areas of argument offered for Australia are Industrial Relations laws that "take us back 25 years" and "considering a resources rent tax". The former is an assertion about consequences not yet proven, in fact you would be hard pressed to find many real business people as opposed to commentators actually worried. The second is only a worry if the state taxes supposed to be removed aren't. Which really you could have said about the GST in 1998.
He then suggests we are attacking banks, but it is only because we "villify" them over their interest rate hikes. A better response than to suggest that democracy is a problem might just be to defend the banks like I did.
The perfectly rational response in the US of limitting the economic activities of banks and questioning awarding bonuses to loss making execs is regarded as populist rather than, as I see it, merely rational. If the move against the banks was as merely populist as suggested, and so easy to pull off, wouldn't Obama have done it BEFORE the Senate by-election, not after?
The real giveaway is the para;
A couple of decades ago politicians realised that they had to be careful when putting the business community offside to please voters. It is still early days, but the signs are there that the lessons of the past have been forgotten.
That is just bull dust. Government learnt it had to make sure it did not suppress economic activity. Getting people "offside" ain't the issue.
Karen Maley got more philosophical on the topic of the illusion of leadership. Kevin Rudd and Barack Obama are both supposedly "long on rhetoric, and short on tough policy initiatives".
Geez I don't know. Was reaching into the fiscal bag and driving up a deficit that you as Goverment have to deal with an EASY option? Was any of the decisions, be it to intervene and save a bank, or to not and let one go down anything other than "tough".
In case anyone missed it Obama inherited a Federal budget deficit of extraordinary proportiions because Bush was trying to "defund the left" by leaving nothing left to be spent. So is Obama prioposing to increase some taxes to correct the budget defioit anything other than a tough decision? It sure isn't rhetoric.
The argument in Australia comes down to this;
The big gains in productivity growth that we witnessed in the 1990s were a direct result of the huge economic reforms undertaken by the Hawke/Keating government. Initiatives such as pulling down the tariff barriers, floating the dollar, deregulating the financial system and privatizing inefficient government monopolies lay the ground-work for huge improvements in productivity. In contrast, the Rudd government’s commitment to lift spending on infrastructure and education involves a good deal of rhetoric. And very few tough decisions.
Firstly micro-economic reform is a bit like creating growth by lowering interest rates. You get to a point where you can't go any further - you can't have a negative interest rate.
I think the one reform we could pursue would be to start breaking up some of the inefficient private sector monopolies and oligopolies, but the BCA that used to be the champion of micro-economic reform is now the oligopolists club where "free market" means the right to maintain market power.
Hmm, now if you can't get magic efficiency benefits by creating more market where can you. Oh how about improving human capital (by education) and social capital (infrastructure).
It remains a fact that the Howard Government's biggest reforms in transport infrastructure was to take on the unions to improve crane rates at container terminals. We became more efficient at processing imports. But not a cent was spent on building infrastructure to service exports.
Give me Rudd's "rhetoric" over that kind of action any day!
Meanwhile can we get over the obsession with "leadership", "tough decisions" and the dislike of "populism". The reactionaries mightn't have noticed but democracy works, but only while you believe in it!
Competition Law types
An item today on itNews says that Amazon has decided to "give in" to demands from a publisher (McMillan) about the prices to be charged for e-books.
This doesn't see to be about the wholesale arrangement betwee them, just the retail prices to be charged.
I can now buy e-books in Australia for a Kindle.
All you competition law types out there - is this a breach of the law prohibitting resale price maintenance?
This doesn't see to be about the wholesale arrangement betwee them, just the retail prices to be charged.
I can now buy e-books in Australia for a Kindle.
All you competition law types out there - is this a breach of the law prohibitting resale price maintenance?
Challenges
I was discussing with an old friend the other day the history of disputes at the University of Sydney. I'd brought up the quote from Paul Feyerabend (whose work gave this blog its name) that Sydney had one Opera House, one harbour bridge and two philosophy departments. (The article was I think reprinted in Science in a Free Society)
He was referring to the very famous "split" between Traditional and Modern and General Philosophy in the 1970s. We went on to detail other splits, including between theoretical and other chemists that resulted in a wall being built to separate staff, between Pure and pplied Mathematics creating two (artificial) departments, a split in English, and another that I can't recall now.
But the other famous one was the split in Economics, with the founding of the Department of Political Economy. This was another part of the cause for Marxist teaching, but also an early critique of the idea that "orthodox" economics could be called a fairytale.
That perhaps explains why a Sydney University Economics graduate has been quoted as saying;
I have never been as excited about economics as some of my colleagues; you know, I find economics is not for nothing known as the dismal science.
The speaker was apparently Tony Abbott according to a report on Niki Savva's new book.
Perhaps the young Tony should have tried the Political Economy course, then he might have a different view.
But the challenge to understand economics is perhaps small compared to the challenges of forecasting demand for just one product, broadband. The Age today has a story about the challenge being faced in Tasmania to get interest in the NBN. The network is being rolled out in rural parts of Tasmania that are not what we would call vibrant.
But these challenges are the same for the whole shooting match. As I recently wrote to the industry newsletter Communicatins Day (paraphrased).
The NBN is a necessary, but not sufficient, condition for productivity improvement.
Some have morphed the discussion about productivity into a discussion of decentralization and its cousin telework. Not only is productivity largely unrelated to workplace location, I remain concerned about the ongoing faith that widespread broadband availability is by its very nature a decentralizing influence.
The history of communication technologies is actually the reverse. Studies of the geographic impact of the telephone (see The social impact of the telephone by Ithiel de Sola Pool) in the US show that it was a cause of the development of larger cities and towns. The Australian experience with telephone penetration is that once the phone was ubiquitous organisations (notably banks) closed their service outlets and communicated with customers by phone. In general, if the technology allows you to conduct your business from anywhere, your choice of where is more likely to be where there are more people not less. As telemedicine becomes more practical, more specialists will leave country towns, not the reverse.
The assumption that the “long commute” is wasteful is also largely wrong. At least those on the train are usually engaged in some activity, even if only listening to music. That’s called relaxation, and we need it.
Where the ability to telecommute does come into its own though is in the ability to improve participation rates. It is a good way to effectively get a few extra hours of work from someone – be that unpaid overtime or the part-time at home participation of new parents.
That said, greater availability and use of broadband can result in further productivity improvements. To do so, however, businesses and individuals need to understand the opportunities even better than they do today, and we need to get to near ubiquitous penetration levels before most will be realized. The example used earlier of banks is telling, they did not invest in call centres at all until phone penetration (including with DTMF signaling) reached close to 100%. Similarly ten years ago businesses would say “why would I need a website” – which was a good question when only a small percentage of potential customers could or would access it.
To realize the productivity impacts we need a much better conversation about the productivity effects than we have had to date. Unfortunately, I don’t think large scale telecommuting is one of them.
This tirade was trying to address a number of things. Firstly that the benefits of the NBN will depend on ubiquity, and that telework and a magical decentralisation are over-hyped.
What I left out was a criticism of the insistence on talking about education and health. Even in the article about Tasmania cited the mayor said "I know the high school and the hospital are quite keen to have it." If it was about connecting hospitals and schools you ould build a totally different network.
The challenge of the NB is getting people to understand what its impacts will be. I'm very afraid that we'll get about half-way through and still have people saying "what is it for" before we get to the ubiquity necessary for a transformation.
He was referring to the very famous "split" between Traditional and Modern and General Philosophy in the 1970s. We went on to detail other splits, including between theoretical and other chemists that resulted in a wall being built to separate staff, between Pure and pplied Mathematics creating two (artificial) departments, a split in English, and another that I can't recall now.
But the other famous one was the split in Economics, with the founding of the Department of Political Economy. This was another part of the cause for Marxist teaching, but also an early critique of the idea that "orthodox" economics could be called a fairytale.
That perhaps explains why a Sydney University Economics graduate has been quoted as saying;
I have never been as excited about economics as some of my colleagues; you know, I find economics is not for nothing known as the dismal science.
The speaker was apparently Tony Abbott according to a report on Niki Savva's new book.
Perhaps the young Tony should have tried the Political Economy course, then he might have a different view.
But the challenge to understand economics is perhaps small compared to the challenges of forecasting demand for just one product, broadband. The Age today has a story about the challenge being faced in Tasmania to get interest in the NBN. The network is being rolled out in rural parts of Tasmania that are not what we would call vibrant.
But these challenges are the same for the whole shooting match. As I recently wrote to the industry newsletter Communicatins Day (paraphrased).
The NBN is a necessary, but not sufficient, condition for productivity improvement.
Some have morphed the discussion about productivity into a discussion of decentralization and its cousin telework. Not only is productivity largely unrelated to workplace location, I remain concerned about the ongoing faith that widespread broadband availability is by its very nature a decentralizing influence.
The history of communication technologies is actually the reverse. Studies of the geographic impact of the telephone (see The social impact of the telephone by Ithiel de Sola Pool) in the US show that it was a cause of the development of larger cities and towns. The Australian experience with telephone penetration is that once the phone was ubiquitous organisations (notably banks) closed their service outlets and communicated with customers by phone. In general, if the technology allows you to conduct your business from anywhere, your choice of where is more likely to be where there are more people not less. As telemedicine becomes more practical, more specialists will leave country towns, not the reverse.
The assumption that the “long commute” is wasteful is also largely wrong. At least those on the train are usually engaged in some activity, even if only listening to music. That’s called relaxation, and we need it.
Where the ability to telecommute does come into its own though is in the ability to improve participation rates. It is a good way to effectively get a few extra hours of work from someone – be that unpaid overtime or the part-time at home participation of new parents.
That said, greater availability and use of broadband can result in further productivity improvements. To do so, however, businesses and individuals need to understand the opportunities even better than they do today, and we need to get to near ubiquitous penetration levels before most will be realized. The example used earlier of banks is telling, they did not invest in call centres at all until phone penetration (including with DTMF signaling) reached close to 100%. Similarly ten years ago businesses would say “why would I need a website” – which was a good question when only a small percentage of potential customers could or would access it.
To realize the productivity impacts we need a much better conversation about the productivity effects than we have had to date. Unfortunately, I don’t think large scale telecommuting is one of them.
This tirade was trying to address a number of things. Firstly that the benefits of the NBN will depend on ubiquity, and that telework and a magical decentralisation are over-hyped.
What I left out was a criticism of the insistence on talking about education and health. Even in the article about Tasmania cited the mayor said "I know the high school and the hospital are quite keen to have it." If it was about connecting hospitals and schools you ould build a totally different network.
The challenge of the NB is getting people to understand what its impacts will be. I'm very afraid that we'll get about half-way through and still have people saying "what is it for" before we get to the ubiquity necessary for a transformation.
Monday, February 01, 2010
Competition in banking
I remain fascinated by the ongoing discussion about the level of competition in retail banking in Australia. The latest comment by Karen Maley I think correctly notes that it would be an error for Australia Post to get into banking. She is right to note that we don't need Government funds tied up roviding the capital necessary for Aussie Post to get into lending, and nor do they have a distribution network that cries out as being ready to take on another product.
The argument for the need for greater competition is based on the assumption that the four banks can only increase lending rates faster than the official cash rate increases because of a lack of competition. This is patent nonsense, because the cash rate is only one of the factors that will influence a banks costs of lendng. The risk profile I'm prepared to accept as a lender is another, as is the overall position of the global availability of credit.
Yes the banks haven't increased rates at imes other than the RBA rises, but that's largely because the decision to increase rates isn't free of transaction costs. Apart from all the collateral changes and system changes, every rate rise will result in a high number of transactions with customers over requests for changed repayment terms, and inquiriers about early termination, or new lenders if the rise is elsewhere.
Therefore it is logical to vary rates at the same time as RBA rate changes especially if they are expected to be soon.
The decision by one bank not to go beyond the RBA rise may be due to a decision to squeeze margin to gain share, or it may simply be by achieving offsetting savings by, for example, restricting lending to "safer" propositions.
I want to remind all these commentators that the competition from mortgage originators in the 80s and especially 90s was the source of our current mess. These were the guys for whom the securitised debt instruments were created. These were the things that after derivative was added to derivative everyone became unable to accurately price (that is, assess risk).
(If you are into complexity theory it truly was wonderous. The collateralised securities were assumed to spread risk, because house prices had only ever gone down in the past in isolated pockets. What they didn't account for was themselves. The new products, by diversifying risk, increased the appetite of lenders to take risks. The availability of finance however also increased the demand, and hence price, for housing. As a consequence lending to anyone seemed like a good idea - after all the lending risk was diversified and the asset value of the securities were increasing. These were the NINJA loans (No income, no job, no (other) assets).)
If people really want a good old fashioned socialist kind of banking, the alternative is co-operative banking not government banking. We used to have a very vibrant Credit Union sector in Australia. It got a bad name through some building society failures but improved dramatically once there was uniform national regulation. Three things killed (they aren't completyely dead) the credit unions. The first was the arrival of the originators - a lower cost model that we now know wasn't sustainable. The second as the removal of the income tax concession granted to credit unions as "not for profit" co-operatives, that was a bad (Labor) government decision. The third was the inability of the credit union sector to make more of the co-operation between them to reduce their own costs.
I personally am far happier with four banks than I am with two supermarket chains. Apart from incentives for co-operatives the only other policy needed is one to limit the banks to just banking. The disaster in the US also had its genesis in letting DTIs get involved in activities that notionally didn't depend on the balance sheet, but in the end did.
The argument for the need for greater competition is based on the assumption that the four banks can only increase lending rates faster than the official cash rate increases because of a lack of competition. This is patent nonsense, because the cash rate is only one of the factors that will influence a banks costs of lendng. The risk profile I'm prepared to accept as a lender is another, as is the overall position of the global availability of credit.
Yes the banks haven't increased rates at imes other than the RBA rises, but that's largely because the decision to increase rates isn't free of transaction costs. Apart from all the collateral changes and system changes, every rate rise will result in a high number of transactions with customers over requests for changed repayment terms, and inquiriers about early termination, or new lenders if the rise is elsewhere.
Therefore it is logical to vary rates at the same time as RBA rate changes especially if they are expected to be soon.
The decision by one bank not to go beyond the RBA rise may be due to a decision to squeeze margin to gain share, or it may simply be by achieving offsetting savings by, for example, restricting lending to "safer" propositions.
I want to remind all these commentators that the competition from mortgage originators in the 80s and especially 90s was the source of our current mess. These were the guys for whom the securitised debt instruments were created. These were the things that after derivative was added to derivative everyone became unable to accurately price (that is, assess risk).
(If you are into complexity theory it truly was wonderous. The collateralised securities were assumed to spread risk, because house prices had only ever gone down in the past in isolated pockets. What they didn't account for was themselves. The new products, by diversifying risk, increased the appetite of lenders to take risks. The availability of finance however also increased the demand, and hence price, for housing. As a consequence lending to anyone seemed like a good idea - after all the lending risk was diversified and the asset value of the securities were increasing. These were the NINJA loans (No income, no job, no (other) assets).)
If people really want a good old fashioned socialist kind of banking, the alternative is co-operative banking not government banking. We used to have a very vibrant Credit Union sector in Australia. It got a bad name through some building society failures but improved dramatically once there was uniform national regulation. Three things killed (they aren't completyely dead) the credit unions. The first was the arrival of the originators - a lower cost model that we now know wasn't sustainable. The second as the removal of the income tax concession granted to credit unions as "not for profit" co-operatives, that was a bad (Labor) government decision. The third was the inability of the credit union sector to make more of the co-operation between them to reduce their own costs.
I personally am far happier with four banks than I am with two supermarket chains. Apart from incentives for co-operatives the only other policy needed is one to limit the banks to just banking. The disaster in the US also had its genesis in letting DTIs get involved in activities that notionally didn't depend on the balance sheet, but in the end did.
Policy and advertising
We all know that getting a communication to the entire population and getting them to act on it is a challenge. That's why we should not be surprised about reports that the public hasn't got the message on switch-off yet.
It is, however, worthwhile asking why these adds are still non-specific about switch off dates and instead direct viewers to a website. I think technically the ads started before the dates were set - but by definition a television ad is being broadcast on one of the analogue services being switched off. Why, therefore, is there a generic ad around Australia rather than market specific ones?
There is no particular value in scaring metropolitan markets when the simulcast period end date is 30 June 2013 for Brisbane and Perth, and 31 December 2013 for Sydney, Melbourne and Adelaide. It could be argued that the ad is really about promoting the labelling scheme, not about switchover. But don't get me started on the labelling scheme that is really misleading because any TV ever made would get the Digital Capable sticker. If they were engaged in "trade or commrce" I'd be complaining to the ACCC.
And as for the rest of the campaign, I am at a complete loss to understand why you would advertise on radio. Surely every one you want to address is a TV household?
Ahhh the wonders of Government. Where else can you get to spend $48M on an advertising campaign over three years?
It is, however, worthwhile asking why these adds are still non-specific about switch off dates and instead direct viewers to a website. I think technically the ads started before the dates were set - but by definition a television ad is being broadcast on one of the analogue services being switched off. Why, therefore, is there a generic ad around Australia rather than market specific ones?
There is no particular value in scaring metropolitan markets when the simulcast period end date is 30 June 2013 for Brisbane and Perth, and 31 December 2013 for Sydney, Melbourne and Adelaide. It could be argued that the ad is really about promoting the labelling scheme, not about switchover. But don't get me started on the labelling scheme that is really misleading because any TV ever made would get the Digital Capable sticker. If they were engaged in "trade or commrce" I'd be complaining to the ACCC.
And as for the rest of the campaign, I am at a complete loss to understand why you would advertise on radio. Surely every one you want to address is a TV household?
Ahhh the wonders of Government. Where else can you get to spend $48M on an advertising campaign over three years?
Free plug for Crikey
One of the nice things about Crikey is the Video of the Day. Very often they are a nice witty item - usually of course from You Tube.
I'm going to share with you Friday's offering and today's.
Hans-up everyone who is sick of the fact that television news is obsessed with the video report. It's like something can't be news without the pictures. Which is why our "foreign" news is overloaded with stories about crime in the US - there is lots of footage.
My favourite was a story once where the newsreade said "Today Mr X said "Y"", then cut to video of Mr X saying Y.
Anyhow that's a long intro to this video which is your instruction guide to making a TV news story;
I'll follow that with a piece from President Obama meeting with Republican Congressmen. Funny how much this is like a scene from The West Wing.
I'm going to share with you Friday's offering and today's.
Hans-up everyone who is sick of the fact that television news is obsessed with the video report. It's like something can't be news without the pictures. Which is why our "foreign" news is overloaded with stories about crime in the US - there is lots of footage.
My favourite was a story once where the newsreade said "Today Mr X said "Y"", then cut to video of Mr X saying Y.
Anyhow that's a long intro to this video which is your instruction guide to making a TV news story;
I'll follow that with a piece from President Obama meeting with Republican Congressmen. Funny how much this is like a scene from The West Wing.
Meritocracy and Tea Party
On the back of all the news about the MySchool website David Burchell writing in the Oz has decided to have a vague over-all go at the idea of meritocracy.
An out-take provides a touch of the flavour of this piece;
The state system is struggling, and state comprehensives in unfashionable areas struggle most because their pupils' families are struggling too. And yet the social segregation between them and the other schools systems - public and private alike - grows a little with each pass-ing year. At my kids' school there are still legions of boys who believe that nimble hands and a knack for repairing broken things will send you on a solid path through life as a citizen, a wage-earner and a paterfamilias. Yet, as we know, without some vital piece of paper they are likely to be doomed to our contemporary social netherworld, the disability-pension list.
Breathtakingly he asserts the principle that the problem with selective schools is that they increase the gap to the comprehensive schools, without a scintilla of evidence that the absence of the brightest does anything other than affect the average. Will the presence of brighter kids in the comprehensive school increase the educational achievement of the remainder? Does it give them something to aspire to? Or does it make them feel even worse about their pedestrian performance?
But in the same breath he argues that we should recognise that book learning isn't everything and that "repairing broken things" is equally valid. And I ca assure the earnest author that there really are a host of real world things out there between a "piece of paper" and being consigned to the disability pension (and why disability rather than unemployment, what part of bias is it to assume the disabled aren't actually disabled).
The conclusion is equally inept. He writes, in part;
And yet the crying need of our schools sector has nothing to do with the interminable cold war between the public and private sectors as such. We need more schools with a wider range of social backgrounds among their pupils, and a wider range of role models on which potentially able pupils can draw. We need our state schools to become more independent - both in hiring and firing, and in developing and priding themselves on their school's ethos.
... In the end it's not school systems as such but the life-prospects of our young citizens on we should be focused.
And if this task, so simple in conception, seems at present impossibly difficult in execution - this is chiefly because it is confronted by that implacable combination of high-minded philosophy and low self-interest that drives so many of our highest goals and poorest achievements.
Okay so he declares his hand, the bright kids have to go to the comprehensive school to be role models for the not so bright. But how does this it with the idea that being bright shouldn't be seen as the only goal.
And the really bad news is that if you do come up with a state school system without selective schools, so everyone is coralled into the local school, and you then give these schools greater autonomy - or independence from the system - the most likely consequence is to amplify the effects of the socio-economic circumstances of the whole neighbourhood.
It remains the challenge for everyone who wants to use education as some kind of "leveller" that family circumstance makes a huge difference, and that kids from households in which "book learning" is already valued do more book learning.
Ask oneself deeper questions like the ones that emerge from the latest horror story from the UK of a couple of under-age (pre-teen) thugs.
But this does not mean that one needs to go the route of the "Tea Party" movement in the US. This is a weird mob, that had some role in the surprise result in Massachusetts, and subject of an article in the New Yorker. One member is quoted as saying the object to the government subsidising "the loser's mortgages". This is a group at the other extreme, that their priviledge is theirs and not to be messed with.
It is fascinating to see these people and what they think is the defence of freedom. At least at the time he wrote The Road to Surfdom, Hayek noted that while it was important to have freedom because no central planner could do a better job than the market in allocating resources to match preferences, he also counselled against hubris amongst those who weee well off. Hayek would be horrified to hear;
I work hard for what I have and I will share it with who I want to. Government cannot force me to be charitable.
As he noted the fact that one person was well of was as much about luck as it was about effort. The luck could be luck in obtaining abilities, or just in the coin falling the right way on a risk. Let's face it, selection processes in recruitment are not the perfectly scientific selection on merit they are made out to be, and the individual applicant has no control over who else decides to apply. In fact, I think Hayek might argue "if you chose not to be charitable, do not be surprised that Government steps in and decides to be charitable in your place."
An nteresting feature of the Tea Party is its self-organising nature. This confounds critics, as one Tea Party pundit says "If you listen to the Democrats, they’re completely convinced somebody’s in charge of all this." But it also reflects our need to better understand how social values evolve and are re-inforced. That's part of the story about those UK delinquents, and it is possibly the only story that might justify forcing everyone into the same "local school". It is just that the "network effect" could work either way - just like Gresham's law that "bad money drives out good" the negative values can overwhelm the good.
In fact there is a whole host of study on these effects in a whole host of fields that I don't want to go into now. But I will return to them. And when I do I'll return to Phillip Bobbit and Terror and Consent and making sense of the modern world. In making sense of the modern world we need to better understand that the technology of computation and communication that helped win the long war has fundamentally changed the dynamics of networks. Stuff gets communicated faster, global attitudes (and economic markets) can shift faster.
And then we have to realise that we really can't justify our presence in a program supposed to be about libertation and democracy in Afghanistan, if the price of doing so is to maintain a patriarchy.
An out-take provides a touch of the flavour of this piece;
The state system is struggling, and state comprehensives in unfashionable areas struggle most because their pupils' families are struggling too. And yet the social segregation between them and the other schools systems - public and private alike - grows a little with each pass-ing year. At my kids' school there are still legions of boys who believe that nimble hands and a knack for repairing broken things will send you on a solid path through life as a citizen, a wage-earner and a paterfamilias. Yet, as we know, without some vital piece of paper they are likely to be doomed to our contemporary social netherworld, the disability-pension list.
Breathtakingly he asserts the principle that the problem with selective schools is that they increase the gap to the comprehensive schools, without a scintilla of evidence that the absence of the brightest does anything other than affect the average. Will the presence of brighter kids in the comprehensive school increase the educational achievement of the remainder? Does it give them something to aspire to? Or does it make them feel even worse about their pedestrian performance?
But in the same breath he argues that we should recognise that book learning isn't everything and that "repairing broken things" is equally valid. And I ca assure the earnest author that there really are a host of real world things out there between a "piece of paper" and being consigned to the disability pension (and why disability rather than unemployment, what part of bias is it to assume the disabled aren't actually disabled).
The conclusion is equally inept. He writes, in part;
And yet the crying need of our schools sector has nothing to do with the interminable cold war between the public and private sectors as such. We need more schools with a wider range of social backgrounds among their pupils, and a wider range of role models on which potentially able pupils can draw. We need our state schools to become more independent - both in hiring and firing, and in developing and priding themselves on their school's ethos.
... In the end it's not school systems as such but the life-prospects of our young citizens on we should be focused.
And if this task, so simple in conception, seems at present impossibly difficult in execution - this is chiefly because it is confronted by that implacable combination of high-minded philosophy and low self-interest that drives so many of our highest goals and poorest achievements.
Okay so he declares his hand, the bright kids have to go to the comprehensive school to be role models for the not so bright. But how does this it with the idea that being bright shouldn't be seen as the only goal.
And the really bad news is that if you do come up with a state school system without selective schools, so everyone is coralled into the local school, and you then give these schools greater autonomy - or independence from the system - the most likely consequence is to amplify the effects of the socio-economic circumstances of the whole neighbourhood.
It remains the challenge for everyone who wants to use education as some kind of "leveller" that family circumstance makes a huge difference, and that kids from households in which "book learning" is already valued do more book learning.
Ask oneself deeper questions like the ones that emerge from the latest horror story from the UK of a couple of under-age (pre-teen) thugs.
But this does not mean that one needs to go the route of the "Tea Party" movement in the US. This is a weird mob, that had some role in the surprise result in Massachusetts, and subject of an article in the New Yorker. One member is quoted as saying the object to the government subsidising "the loser's mortgages". This is a group at the other extreme, that their priviledge is theirs and not to be messed with.
It is fascinating to see these people and what they think is the defence of freedom. At least at the time he wrote The Road to Surfdom, Hayek noted that while it was important to have freedom because no central planner could do a better job than the market in allocating resources to match preferences, he also counselled against hubris amongst those who weee well off. Hayek would be horrified to hear;
I work hard for what I have and I will share it with who I want to. Government cannot force me to be charitable.
As he noted the fact that one person was well of was as much about luck as it was about effort. The luck could be luck in obtaining abilities, or just in the coin falling the right way on a risk. Let's face it, selection processes in recruitment are not the perfectly scientific selection on merit they are made out to be, and the individual applicant has no control over who else decides to apply. In fact, I think Hayek might argue "if you chose not to be charitable, do not be surprised that Government steps in and decides to be charitable in your place."
An nteresting feature of the Tea Party is its self-organising nature. This confounds critics, as one Tea Party pundit says "If you listen to the Democrats, they’re completely convinced somebody’s in charge of all this." But it also reflects our need to better understand how social values evolve and are re-inforced. That's part of the story about those UK delinquents, and it is possibly the only story that might justify forcing everyone into the same "local school". It is just that the "network effect" could work either way - just like Gresham's law that "bad money drives out good" the negative values can overwhelm the good.
In fact there is a whole host of study on these effects in a whole host of fields that I don't want to go into now. But I will return to them. And when I do I'll return to Phillip Bobbit and Terror and Consent and making sense of the modern world. In making sense of the modern world we need to better understand that the technology of computation and communication that helped win the long war has fundamentally changed the dynamics of networks. Stuff gets communicated faster, global attitudes (and economic markets) can shift faster.
And then we have to realise that we really can't justify our presence in a program supposed to be about libertation and democracy in Afghanistan, if the price of doing so is to maintain a patriarchy.
Welcome Back Breakfast Politics!
Gerard Henderson in his Media Watch Dog has noted that a number of media types have returned from their WEB. He notes that it seems to only be media people who get "Well Earned Breaks" - while the rest of us take vacations (or holidays - but they usually extend beyond the religious festivities and are shared by people of all, and indeed no, faith).
One back today is Breakfast Politics which is an easily digested precis of all the political news, and a blogger's dream! Christine Wallace who composes it took a particularly long WEB - basically the same as the pollies. I suspect she may have been busy finishing a thesis though.
And there is a lot to read today, mostly about the new political year, and what a friend calls reporting politics as either a "horse race or celebrity." The question the media asks is not what Tony Abbott stands for but whether he can sell himself. (This is a segue to a posy about "metrics" that I need to make). Or, its the"celebrity" piece of Tony, Paris Hilton-esque, photographed in his swimmers.
But I want to ignore all that and just note two pieces of "'der' journalism". This is my term for when a newspaper reports something as if it is breathtaking news that isn't.
The first is a report of research by Choice that suggests that consumers don't get much out of supermarket loyalty programs. It notes, as if this is news, that "schemes used by Coles and Woolworths offered less than a $1 return from every $100 spent". So let's be clear, they are telling us the loyalty schemes don't amount to a 1% discount. Did we know that? Well, yes because the terms and conditions are pretty clear.
The pity is that that is no reason to avoid them as a shopper. You see, if you are the only shopper not on the scheme you are the only person not getting the discount. Now the purpose of the loyalty scheme isn't to reduce profit, so the "benefit" of the scheme must be funded by the other shoppers. So as the only person on the scheme you would be funding everyone else. Of course, if EVERYONE joins the scheme, no one is funding it - but then again in the long run no one is paying the list price either. The you get to what could be called the "jewellery store syndrome" where everything is always on sale below a barely existant list price.
The second story suggests that medical training "fails to prepare" new doctors. It goes on to suggest that medical supervisors find interns skills "fall below expectations" and that surveys of final-year medical graduates show that only about a third think they know adequately how to treat wounds and calculate medicine dosages. Hello! The reason we require the new grad to go spend two years in a hospital under close supervision is because you simple can't learn all this stuff from book learning with a few practicums. Even once you get through that now you need a further two year training program to be a GP.
Possibly more worrying s the fact that a third of final-year students might be over cocky about how much they do know. (And equally worrying is the delusion of the medical supervisors that they were any better prepared than the current crop when they emerged from University.) Medicine isn't simple. The only way to better prepare the final year graduates would be to lock them in University longer. Far, far better that they get out and learn on the job under close supervision.
There are other interesting stories this morning - let's see if I can link other completely different stories in another semi-coherent blog post.
One back today is Breakfast Politics which is an easily digested precis of all the political news, and a blogger's dream! Christine Wallace who composes it took a particularly long WEB - basically the same as the pollies. I suspect she may have been busy finishing a thesis though.
And there is a lot to read today, mostly about the new political year, and what a friend calls reporting politics as either a "horse race or celebrity." The question the media asks is not what Tony Abbott stands for but whether he can sell himself. (This is a segue to a posy about "metrics" that I need to make). Or, its the"celebrity" piece of Tony, Paris Hilton-esque, photographed in his swimmers.
But I want to ignore all that and just note two pieces of "'der' journalism". This is my term for when a newspaper reports something as if it is breathtaking news that isn't.
The first is a report of research by Choice that suggests that consumers don't get much out of supermarket loyalty programs. It notes, as if this is news, that "schemes used by Coles and Woolworths offered less than a $1 return from every $100 spent". So let's be clear, they are telling us the loyalty schemes don't amount to a 1% discount. Did we know that? Well, yes because the terms and conditions are pretty clear.
The pity is that that is no reason to avoid them as a shopper. You see, if you are the only shopper not on the scheme you are the only person not getting the discount. Now the purpose of the loyalty scheme isn't to reduce profit, so the "benefit" of the scheme must be funded by the other shoppers. So as the only person on the scheme you would be funding everyone else. Of course, if EVERYONE joins the scheme, no one is funding it - but then again in the long run no one is paying the list price either. The you get to what could be called the "jewellery store syndrome" where everything is always on sale below a barely existant list price.
The second story suggests that medical training "fails to prepare" new doctors. It goes on to suggest that medical supervisors find interns skills "fall below expectations" and that surveys of final-year medical graduates show that only about a third think they know adequately how to treat wounds and calculate medicine dosages. Hello! The reason we require the new grad to go spend two years in a hospital under close supervision is because you simple can't learn all this stuff from book learning with a few practicums. Even once you get through that now you need a further two year training program to be a GP.
Possibly more worrying s the fact that a third of final-year students might be over cocky about how much they do know. (And equally worrying is the delusion of the medical supervisors that they were any better prepared than the current crop when they emerged from University.) Medicine isn't simple. The only way to better prepare the final year graduates would be to lock them in University longer. Far, far better that they get out and learn on the job under close supervision.
There are other interesting stories this morning - let's see if I can link other completely different stories in another semi-coherent blog post.
Friday, January 29, 2010
Lab126 versus Jobs
One of the interesting features of the "facebook for grown-ups" that is LinkedIn is the feature that tells you a bit about the people who have viewed your profile in recent days.
These are often pretty straight-forward and often align with people who have subsequently sent an invitation to connect, some can be related to something where you know you would have appeared in someone's search field (often because of this blog). Today I'm stumped though because my profile had been reviewed by someone from Lab126 which is not only AN amazon.com company, it is the company that makes the Kindle.
Pretty spooky stuff the day after the launch of the Apple iPad. (Actually more spooky was the number of people at Lab126 who are in the third level of my LinkedIn network.) But it gives me an excuse to talk about the e-reader/netbook/tablet market.
I've only briefly handled a Kindle, I own an Iliad by iRex and like the rest of us have just seen the iPad in the video (I also don't own an iPhone ... yet). The really big differences can be summarised as;
1. A purpose specific device versus a multi-purpose device.
The Kindle is just a reader like an iPod is just a music player. The difference in the memory can also be significant, but not really if you realise the iPad memory will be contended for other things. The devices also have different battery (or charge) life - and that also reflects this distinction.
2. A connected device versus a stand alone device.
Despite the fact the iPad looks like an iPhone on steriods, it probably is better thought of as a multi-function iPod Touch. The "whispernet" solution of content distribution on the Kindle should not be underestimated, especially for subscription periodical content. Even book buying on the road is much easier in this "connectionless" mode. Sure the iPad has kinds of wireless connectivity, but it is the global push model of the Kindle that is cool - and the fact they pulled it off by piggybacking on existing roaming agreements rather than running around the world making separate carrier deals.
3. e-ink versus LCD.
The screen difference is huge. Computer types will rave over the benefit of a colour full motion screen , but serious readers know that e-ink is the only way to go for books. This isn't just an aesthetic thing it really is about eye tiredness and the range of environments you want to read in.
4. The eco-system.
The Kindle eco system is built around the existing power of one book distribution model, while the iPad is off seeking to recreate its iTunes store success. While they've signed partners there is a long way to go, and ultimately for publishers the decision is digital or not - many will likely serve both markets. But we shouldn't forget that there is already a KindleAp for the iPhone and hence the iPad.
Conclusion
I don't think we are anywhere near the conclusion of all this yet. I haven't even mentioned the HP Slate which Steve Ballmer was showing running the Kindle Ap at CES. This runs Windows 7 which means it has got the same touch screen capabilities as the iPad but as noted in this three way comparison there are a lot of problems in getting a desktop OS to perform in a tablet.
It remains interesting as the battle sometimes gets described as a Redmond vs Apple battle, forgetting that one is basically a software house whereas the other is a combined hardware and software. It is a false comparison just as in the Nanny TV show they kept incorrectly comparing a mere producer in Mr Sheffield to a composer in Lloyd Webber. In fact, the geek set who has a dislike of Microsoft should at least acknowledge that it is a separated software house that works with many hardware makers, and when it comes to selling software you don't have to do it through their store!
What still intrigues me is that as we move to tablets people seem to be making a choice between e-ink and LCD. These devices have a front and a back. There is no reason why one can't be made with a selectable screen depending on the task. And Sony does have in their e-reader collection a colour version of e-ink.
The issue then becomes size - the one thing that the Kindle really has going for it. Being single purpose it is slim and light, what you need for being propped up anywhere and reading.
My money is on a tablet running a Windows 8 with dual screens, ten times the memory of the iPad and some version of 4G connectivity. Salivate on that.
Note: The Apple iPad reminds one of the story about Ita Buttrose having to explain to Kerry Packer why, when launching a sister magazine to the Women's Weekly, they should not call it Women's Monthly. Instead they called it Cleo!
These are often pretty straight-forward and often align with people who have subsequently sent an invitation to connect, some can be related to something where you know you would have appeared in someone's search field (often because of this blog). Today I'm stumped though because my profile had been reviewed by someone from Lab126 which is not only AN amazon.com company, it is the company that makes the Kindle.
Pretty spooky stuff the day after the launch of the Apple iPad. (Actually more spooky was the number of people at Lab126 who are in the third level of my LinkedIn network.) But it gives me an excuse to talk about the e-reader/netbook/tablet market.
I've only briefly handled a Kindle, I own an Iliad by iRex and like the rest of us have just seen the iPad in the video (I also don't own an iPhone ... yet). The really big differences can be summarised as;
1. A purpose specific device versus a multi-purpose device.
The Kindle is just a reader like an iPod is just a music player. The difference in the memory can also be significant, but not really if you realise the iPad memory will be contended for other things. The devices also have different battery (or charge) life - and that also reflects this distinction.
2. A connected device versus a stand alone device.
Despite the fact the iPad looks like an iPhone on steriods, it probably is better thought of as a multi-function iPod Touch. The "whispernet" solution of content distribution on the Kindle should not be underestimated, especially for subscription periodical content. Even book buying on the road is much easier in this "connectionless" mode. Sure the iPad has kinds of wireless connectivity, but it is the global push model of the Kindle that is cool - and the fact they pulled it off by piggybacking on existing roaming agreements rather than running around the world making separate carrier deals.
3. e-ink versus LCD.
The screen difference is huge. Computer types will rave over the benefit of a colour full motion screen , but serious readers know that e-ink is the only way to go for books. This isn't just an aesthetic thing it really is about eye tiredness and the range of environments you want to read in.
4. The eco-system.
The Kindle eco system is built around the existing power of one book distribution model, while the iPad is off seeking to recreate its iTunes store success. While they've signed partners there is a long way to go, and ultimately for publishers the decision is digital or not - many will likely serve both markets. But we shouldn't forget that there is already a KindleAp for the iPhone and hence the iPad.
Conclusion
I don't think we are anywhere near the conclusion of all this yet. I haven't even mentioned the HP Slate which Steve Ballmer was showing running the Kindle Ap at CES. This runs Windows 7 which means it has got the same touch screen capabilities as the iPad but as noted in this three way comparison there are a lot of problems in getting a desktop OS to perform in a tablet.
It remains interesting as the battle sometimes gets described as a Redmond vs Apple battle, forgetting that one is basically a software house whereas the other is a combined hardware and software. It is a false comparison just as in the Nanny TV show they kept incorrectly comparing a mere producer in Mr Sheffield to a composer in Lloyd Webber. In fact, the geek set who has a dislike of Microsoft should at least acknowledge that it is a separated software house that works with many hardware makers, and when it comes to selling software you don't have to do it through their store!
What still intrigues me is that as we move to tablets people seem to be making a choice between e-ink and LCD. These devices have a front and a back. There is no reason why one can't be made with a selectable screen depending on the task. And Sony does have in their e-reader collection a colour version of e-ink.
The issue then becomes size - the one thing that the Kindle really has going for it. Being single purpose it is slim and light, what you need for being propped up anywhere and reading.
My money is on a tablet running a Windows 8 with dual screens, ten times the memory of the iPad and some version of 4G connectivity. Salivate on that.
Note: The Apple iPad reminds one of the story about Ita Buttrose having to explain to Kerry Packer why, when launching a sister magazine to the Women's Weekly, they should not call it Women's Monthly. Instead they called it Cleo!
Thursday, January 28, 2010
Lindsay Tanner on scientists
Writing in the SMH today Lindsay Tanner has asked for a "scientist to inspire a generation".
Lindsay was referring to Professor Julius Sumner Miller as an earlier incarnation, and he referred to the shows he did for the ABC called Why Is It So?. I actually had the experience of appearing on a later version of that show called The Professor and the Enquiring Minds on Channel 7.
I was, if I say, rather impressive, because I answered all the challenges put to us by the Professor. About two-thirds of the way through my second show the Professor said "I'll get you Havyatt".
I'll now confess my little secret. Before I went on the show I visited the old AGPS bookshop - then at 309 Pitt St I think - and bought all four volumes of the books the ABC had published on the original show. I read them, understood them ,and more importantly remembered them. There was nothing Miller did on the second show he hadn't done on the first!
But the point of Lindsay's item was to talk about the need to find a way to excite kids about science. It was the Science Foundation for Physics at the University of Sydney that originally brought Sumner Miller out, which is the same group that tends for the modern variant, Dr Karl. Lindsay seems to pass over the ABC show Sleek Geeks in his ruminating.
For me, as a person with a first degree in Physics and Maths from the aforementioned University of Sydney, the issue isn't about the lack of "inspiration". That said I do get heartily sick of the gross over-representation of a narrow slice of scientists in national recognition and reward, this being people from "medical" science.
In my own journey through science I always enjoyed the primary school science wherein we learnt about real things. That and the bit of mucking around I did with a friend in which we made a really great smoke bomb by mixing pool chlorine and linseed oil (and two other ingredients I can't remember) in a tin can - the friend is now a Professor of Chemistry at the self-same Sydney U.
High school science was also fun when we "did stuff". I still remember in year 9 or 10 learning about pulleys, and actually doing experiments to show that what was meant to happen did. It was senior high scholl where we were the first lot in NSW to try to new experimental syllabus in 1974 that things got interesting. The Messell textbooks wre dropped and we did interesting things in mechanics where we cllided things and mapped their vectors.
These were, however, mostly experimental verifications of the content we were being taught. From what I can figure out from what my daughters learnt the sylabus has progressed from this to its illogical conclusion. Rather than doing the experiment as verification of content, the "content" has become the scientific method.
While another friend and I had so raced through the year 11 syllabus (OK so we did the whole year in the first of three terms) and we then set about our own experiments (one of my design to determine the effect of friction on the earlier pulley factors and one of his design of transmitting sound by reflecting a laser off a vibrating mirror) I was stunned to find when my ow kids were doing physics that "design and do your own experiment" had become part of the curriculum.
For my money it isn't about having an "inspiration" like Dr Karl or JSM - it is about making the subject substantial. Real content about deep theory - not the current blend of showing how its relevant (the chemistry strand on "corrosion") or on getting kids to do experiments that are meaningless.
Science is also harder now because the days where an "amateur" set up could show stuff are long gone. To do fundamental research you need a Hadron Collider, to do astronomy you need a Square Kilometre Array. Where there is a lot more hope is probably i giving kids better access to computers and the skills to use advanced modelling and maths tools on them. This is probably the step function change needed to revitalise interest.
Mind you, every time I read an item like this I keep wondering whether I shouldn't go teach for a while.
Note 1: I'm trying to find out if Seven still has tapes of the show.
Note 2: I know that seven of my school year started Science at Sydney University (compared to the seventeen doing medicine at one or other Uni - at least three of us could have entered medicine if we'd wanted to). One didn't graduate I think. Of the others I was the only one not to do Hounours (a long story). One of those five had to change his degree to be Arts so he could do double Honours in Pure Maths and Philosophy before his PhD at Harvard, one did his PhD in physiology and is now in Singapore doing interesting stem cell things, and three did honours in chemistry, one being the aforementioned Professor, and another who is now a professional bridge player. Both the third chemist and the PhD in Maths ultimately made their careers in IT.
Lindsay was referring to Professor Julius Sumner Miller as an earlier incarnation, and he referred to the shows he did for the ABC called Why Is It So?. I actually had the experience of appearing on a later version of that show called The Professor and the Enquiring Minds on Channel 7.
I was, if I say, rather impressive, because I answered all the challenges put to us by the Professor. About two-thirds of the way through my second show the Professor said "I'll get you Havyatt".
I'll now confess my little secret. Before I went on the show I visited the old AGPS bookshop - then at 309 Pitt St I think - and bought all four volumes of the books the ABC had published on the original show. I read them, understood them ,and more importantly remembered them. There was nothing Miller did on the second show he hadn't done on the first!
But the point of Lindsay's item was to talk about the need to find a way to excite kids about science. It was the Science Foundation for Physics at the University of Sydney that originally brought Sumner Miller out, which is the same group that tends for the modern variant, Dr Karl. Lindsay seems to pass over the ABC show Sleek Geeks in his ruminating.
For me, as a person with a first degree in Physics and Maths from the aforementioned University of Sydney, the issue isn't about the lack of "inspiration". That said I do get heartily sick of the gross over-representation of a narrow slice of scientists in national recognition and reward, this being people from "medical" science.
In my own journey through science I always enjoyed the primary school science wherein we learnt about real things. That and the bit of mucking around I did with a friend in which we made a really great smoke bomb by mixing pool chlorine and linseed oil (and two other ingredients I can't remember) in a tin can - the friend is now a Professor of Chemistry at the self-same Sydney U.
High school science was also fun when we "did stuff". I still remember in year 9 or 10 learning about pulleys, and actually doing experiments to show that what was meant to happen did. It was senior high scholl where we were the first lot in NSW to try to new experimental syllabus in 1974 that things got interesting. The Messell textbooks wre dropped and we did interesting things in mechanics where we cllided things and mapped their vectors.
These were, however, mostly experimental verifications of the content we were being taught. From what I can figure out from what my daughters learnt the sylabus has progressed from this to its illogical conclusion. Rather than doing the experiment as verification of content, the "content" has become the scientific method.
While another friend and I had so raced through the year 11 syllabus (OK so we did the whole year in the first of three terms) and we then set about our own experiments (one of my design to determine the effect of friction on the earlier pulley factors and one of his design of transmitting sound by reflecting a laser off a vibrating mirror) I was stunned to find when my ow kids were doing physics that "design and do your own experiment" had become part of the curriculum.
For my money it isn't about having an "inspiration" like Dr Karl or JSM - it is about making the subject substantial. Real content about deep theory - not the current blend of showing how its relevant (the chemistry strand on "corrosion") or on getting kids to do experiments that are meaningless.
Science is also harder now because the days where an "amateur" set up could show stuff are long gone. To do fundamental research you need a Hadron Collider, to do astronomy you need a Square Kilometre Array. Where there is a lot more hope is probably i giving kids better access to computers and the skills to use advanced modelling and maths tools on them. This is probably the step function change needed to revitalise interest.
Mind you, every time I read an item like this I keep wondering whether I shouldn't go teach for a while.
Note 1: I'm trying to find out if Seven still has tapes of the show.
Note 2: I know that seven of my school year started Science at Sydney University (compared to the seventeen doing medicine at one or other Uni - at least three of us could have entered medicine if we'd wanted to). One didn't graduate I think. Of the others I was the only one not to do Hounours (a long story). One of those five had to change his degree to be Arts so he could do double Honours in Pure Maths and Philosophy before his PhD at Harvard, one did his PhD in physiology and is now in Singapore doing interesting stem cell things, and three did honours in chemistry, one being the aforementioned Professor, and another who is now a professional bridge player. Both the third chemist and the PhD in Maths ultimately made their careers in IT.
Wednesday, January 27, 2010
Graduates in Science from Sydney University
Apart from Vic N, are there any other graduates in science from SU who read this blog? If so could they get in touch directly with me, I need a favour.
The hottest 100 and the long tail (with a note on George Gilder)
OK so the Triple J Hottest 100 has been decided for another year.
Managed to listen to most of it - simulcast with the tennis!
My own selections either did very well, or very badly. Here's how they went;
BLUEJUICE - Broken Leg, 5
DAN SULTAN - Letter, no rank
DRUMS, THE - Let's Go Surfing, no rank
GOSSIP, THE - Heavy Cross, 16
LILY ALLEN - Not Fair, 8
LISA MITCHELL - Coin Laundry, 7
OFFICIAL SECRETS ACT - The Girl From The BBC, no rank
SALLY SELTMANN - Harmony To My Heartbeat, no rank
Don't ask me about the logic of my choices - my biggest problem is that by the end of the year I can't remember well enough what I liked.
What I'd love to see is the actual votes. It becomes significant if you believe in Chris Anderson's Long Tail theory, because the long tail idea is that there is a lot of content out there that traditional distribution models "cut off". In the theory new media becomes self-funding through all the new stuff. A good example he gives is of the gross take of movies and his suggestion that if only there were more cinema screens the distributio would follow the "power law" distribution of long tail theory, whereas in reality it follows a "log-normal" distrubtion. The difference in these is shown on a "Zipf plot" (a log-log plot of scalar by rank) - the lowerlaw is linear, the log-normal starts linear then drops off).
I'd love to know the data for iTunes!
But maybe the Hottest 100 voting data would make an interesting alternative. Does anyone know if I can get the voting data?
As an aside - some of you might have heard "Havyatt's Law" - which is "what Intel giveth, Microsoft taketh away". I owe its original formulation to George Gilder, who wrote two books Microcosm and Telecosm. Anderson on his blog has a story about a Wired interview. I think one Gilder quote summarises it nicely;
Over the last 30 years, we've seen transistors (or switching power) move from being expensive, crafted vacuum tubes to being virtually free. So today, the prime rule of thrift in business is "waste transistors." We "waste" them to correct our spelling, to play solitaire, to do anything. As a matter of fact, you've got to waste transistors in order to succeed in business these days.
My thesis is that bandwidth is going to be virtually free in the next era in the same way that transistors are in this era. It doesn't mean there won't be expensive technologies associated with the exploitation of bandwidth - just as there are expensive computers employing transistors; but it does mean that people will have to use this bandwidth, they'll have to waste bandwidth rather than economize on bandwidth. The wasters of bandwidth will win rather than the people who are developing exquisite new compression tools and all these other devices designed to exploit some limited bandwidth.
This interview, by the way, dates from 1993!
Managed to listen to most of it - simulcast with the tennis!
My own selections either did very well, or very badly. Here's how they went;
BLUEJUICE - Broken Leg, 5
DAN SULTAN - Letter, no rank
DRUMS, THE - Let's Go Surfing, no rank
GOSSIP, THE - Heavy Cross, 16
LILY ALLEN - Not Fair, 8
LISA MITCHELL - Coin Laundry, 7
OFFICIAL SECRETS ACT - The Girl From The BBC, no rank
SALLY SELTMANN - Harmony To My Heartbeat, no rank
Don't ask me about the logic of my choices - my biggest problem is that by the end of the year I can't remember well enough what I liked.
What I'd love to see is the actual votes. It becomes significant if you believe in Chris Anderson's Long Tail theory, because the long tail idea is that there is a lot of content out there that traditional distribution models "cut off". In the theory new media becomes self-funding through all the new stuff. A good example he gives is of the gross take of movies and his suggestion that if only there were more cinema screens the distributio would follow the "power law" distribution of long tail theory, whereas in reality it follows a "log-normal" distrubtion. The difference in these is shown on a "Zipf plot" (a log-log plot of scalar by rank) - the lowerlaw is linear, the log-normal starts linear then drops off).
I'd love to know the data for iTunes!
But maybe the Hottest 100 voting data would make an interesting alternative. Does anyone know if I can get the voting data?
As an aside - some of you might have heard "Havyatt's Law" - which is "what Intel giveth, Microsoft taketh away". I owe its original formulation to George Gilder, who wrote two books Microcosm and Telecosm. Anderson on his blog has a story about a Wired interview. I think one Gilder quote summarises it nicely;
Over the last 30 years, we've seen transistors (or switching power) move from being expensive, crafted vacuum tubes to being virtually free. So today, the prime rule of thrift in business is "waste transistors." We "waste" them to correct our spelling, to play solitaire, to do anything. As a matter of fact, you've got to waste transistors in order to succeed in business these days.
My thesis is that bandwidth is going to be virtually free in the next era in the same way that transistors are in this era. It doesn't mean there won't be expensive technologies associated with the exploitation of bandwidth - just as there are expensive computers employing transistors; but it does mean that people will have to use this bandwidth, they'll have to waste bandwidth rather than economize on bandwidth. The wasters of bandwidth will win rather than the people who are developing exquisite new compression tools and all these other devices designed to exploit some limited bandwidth.
This interview, by the way, dates from 1993!
Television
Two things occurred this week to make me ruminate on television. The first was the announcement that the ABC will be launching a fourth channel that will be a news channel, the second was yet another in the long running cases of a sports broadcast being dropped for the news.
Let's talk about the ABC 24/7 news channel first. The ABC is apparently using their High Definition channel for the service - which puts paid a bit to ideas that we were all hanging out to see our favourite TV in HD. They also said "The channel will commence with no additional funds from the Government for content. Significant changes the ABC has made to news and television production processes, taking advantage of new technology, will allow the broadcaster to reinvest in new programming."
That also makes sense - you can create a 24/7 news channel by repeating lots of stuff!
Meanwhile SkyNews has complained that this is a breach of the ABC charter, on the grounds that the charter is for the ABC to provide services that "commercial broadcasters are unwilling or unable to provide." Actually they err here, because the charter doesn't say that. It only says they need to take account of the commercial services before deciding if there is a need for a service.
The real question becomes whether a broadcasting service on pay TV can be considered the same thing as "commercial broadcast." Section 14 of the Broadcasting Services Act says a broadcasting service is a commercial service if it provides "programs that, when considered in the context of the service being provided, appear to be intended to appeal to the general public", and it provides programs "(i) are able to be received by commonly available equipment; and (ii) are made available free to the general public."
It might come as a shock to SkyNews - but they are NOT a commercial broadcast service! Hence a 24/7news service isn't currently provided by a commercial broadcaster, notwithstanding that both Nine and Seven (which are commercial broadcasters) are investors.
Poor Seven has copped a bit of flack over the ongoing problem of sports events that run over time. In this case it was a match at the Australian Open between Sam Stosur and Serena Williams that started late and hence had only just got going at standard news broadcast time. This match mind you was not the only for which Seven cut to the News.
Two letters in the SMH criticised the decision. One suggested it was sexist, as it was a women's match, the other wondered why they couldn't move the sports to 7Two.
The sexist line also was echoed by the Sports Minister who today criticised the overall percentage of coverage of women's sport and the trivialisation of coverage that focussed on fashion (without a word about how much male sport coverage is full of equal irrelevancy about the sportsman as anything other than sportsman - did I hear Tiger Woods mentined?)
Richard Hinds writing in the SMH suggests;
It follows that if the network which has paid for the privilege of broadcasting the event loses faith in the product, as Seven did when deciding to abandon the heavily promoted Serena Williams-Samantha Stosur match on Monday to cross to the news and Today Tonight, Australian tennis has a significant problem.
The problem with that trite analysis is that Seven's News draws an audience of 1.5 million, the tennis something like 800,000. What are the 750,000 people who want to watch Seven's news supposed to do? Nine does EXACTLY the same thing when test cricket ticks past 6 pm.
These are rational programming decisions, and not a problem inherent in the sports themselves.
The suggestion by Shona Kirchen in her letter to the SMH about the potential use of the multi-channel is a good one. But the facts are that sports that are on the anti-siphoning list, that is, that are important enough that the government wants them available "free to air" aren't allowed to be shown on the multi-cast channels. Go figure!
You'd think that at least the rules could allow for the sport to shift to the multi-cast channel on the condition that the event runs past its "scheduled" finish time. To ensure "scheduled" finish times aren't manipulated you could have a simple rule about what percentage is shown on the primary channel.
But you see, this is just another part of the politics that plays out between pay TV and free to air TV.
As for the sports minister's suggestion that coverage of sport is sexist, the figure she uses is the proportion of time used to cover women's sport in the sport coverage in news and current affairs programs. That was 9% for all, and only 11% for the ABC with its charter. This unfortunately isn't a figure on live sports coverage. That would, I suspect, be even more weighted.
There are many causes of this, and in part it remains audience demand. Though as I know from some theatre engagement a responsibility of the presenter is "audience development" - educating the audience on new things. The Minister's only conclusion is;
Surely in 2010 we as sports lovers can send a message that we appreciate women’s sport and abilities irrespective of the darnned frocklett. With only 9% of coverage on women’s sport I reckon we can do better - and I for one want to know more of what we’re missing.
I can think of a few more things. They would include greater promotion on the ABC of the women's sport it does have on its schedule. Some encouragement for the ABC in increasing the share for women's sport. Possibly a government sponsored program for additional media training for women in sport (though I'd note that increasingly it is the females who are making media careerrs out of the former sportspeople).
Let's talk about the ABC 24/7 news channel first. The ABC is apparently using their High Definition channel for the service - which puts paid a bit to ideas that we were all hanging out to see our favourite TV in HD. They also said "The channel will commence with no additional funds from the Government for content. Significant changes the ABC has made to news and television production processes, taking advantage of new technology, will allow the broadcaster to reinvest in new programming."
That also makes sense - you can create a 24/7 news channel by repeating lots of stuff!
Meanwhile SkyNews has complained that this is a breach of the ABC charter, on the grounds that the charter is for the ABC to provide services that "commercial broadcasters are unwilling or unable to provide." Actually they err here, because the charter doesn't say that. It only says they need to take account of the commercial services before deciding if there is a need for a service.
The real question becomes whether a broadcasting service on pay TV can be considered the same thing as "commercial broadcast." Section 14 of the Broadcasting Services Act says a broadcasting service is a commercial service if it provides "programs that, when considered in the context of the service being provided, appear to be intended to appeal to the general public", and it provides programs "(i) are able to be received by commonly available equipment; and (ii) are made available free to the general public."
It might come as a shock to SkyNews - but they are NOT a commercial broadcast service! Hence a 24/7news service isn't currently provided by a commercial broadcaster, notwithstanding that both Nine and Seven (which are commercial broadcasters) are investors.
Poor Seven has copped a bit of flack over the ongoing problem of sports events that run over time. In this case it was a match at the Australian Open between Sam Stosur and Serena Williams that started late and hence had only just got going at standard news broadcast time. This match mind you was not the only for which Seven cut to the News.
Two letters in the SMH criticised the decision. One suggested it was sexist, as it was a women's match, the other wondered why they couldn't move the sports to 7Two.
The sexist line also was echoed by the Sports Minister who today criticised the overall percentage of coverage of women's sport and the trivialisation of coverage that focussed on fashion (without a word about how much male sport coverage is full of equal irrelevancy about the sportsman as anything other than sportsman - did I hear Tiger Woods mentined?)
Richard Hinds writing in the SMH suggests;
It follows that if the network which has paid for the privilege of broadcasting the event loses faith in the product, as Seven did when deciding to abandon the heavily promoted Serena Williams-Samantha Stosur match on Monday to cross to the news and Today Tonight, Australian tennis has a significant problem.
The problem with that trite analysis is that Seven's News draws an audience of 1.5 million, the tennis something like 800,000. What are the 750,000 people who want to watch Seven's news supposed to do? Nine does EXACTLY the same thing when test cricket ticks past 6 pm.
These are rational programming decisions, and not a problem inherent in the sports themselves.
The suggestion by Shona Kirchen in her letter to the SMH about the potential use of the multi-channel is a good one. But the facts are that sports that are on the anti-siphoning list, that is, that are important enough that the government wants them available "free to air" aren't allowed to be shown on the multi-cast channels. Go figure!
You'd think that at least the rules could allow for the sport to shift to the multi-cast channel on the condition that the event runs past its "scheduled" finish time. To ensure "scheduled" finish times aren't manipulated you could have a simple rule about what percentage is shown on the primary channel.
But you see, this is just another part of the politics that plays out between pay TV and free to air TV.
As for the sports minister's suggestion that coverage of sport is sexist, the figure she uses is the proportion of time used to cover women's sport in the sport coverage in news and current affairs programs. That was 9% for all, and only 11% for the ABC with its charter. This unfortunately isn't a figure on live sports coverage. That would, I suspect, be even more weighted.
There are many causes of this, and in part it remains audience demand. Though as I know from some theatre engagement a responsibility of the presenter is "audience development" - educating the audience on new things. The Minister's only conclusion is;
Surely in 2010 we as sports lovers can send a message that we appreciate women’s sport and abilities irrespective of the darnned frocklett. With only 9% of coverage on women’s sport I reckon we can do better - and I for one want to know more of what we’re missing.
I can think of a few more things. They would include greater promotion on the ABC of the women's sport it does have on its schedule. Some encouragement for the ABC in increasing the share for women's sport. Possibly a government sponsored program for additional media training for women in sport (though I'd note that increasingly it is the females who are making media careerrs out of the former sportspeople).
Monday, January 25, 2010
Competition
EU regulators are reportedly considering the question of whether the relationship between Yahoo and Microsoft is a "good thing" as a competitive balance to Google.
I'm sorry, but I don't think people get it yet. You'd think after a book called Tipping Point became popular people might understand markets with bandwagon or network effects better.
Making the number two bigger is highly unlikely to have any impact on the number one. If it does it will be at the expense of giving Microsoft something it can leverage up.
The competition solution in the immediate term is just the same as it was at the start of the twentieth century. Regulators need access to, and to use, the ability to apply for divestiture orders.
I'm sorry, but I don't think people get it yet. You'd think after a book called Tipping Point became popular people might understand markets with bandwagon or network effects better.
Making the number two bigger is highly unlikely to have any impact on the number one. If it does it will be at the expense of giving Microsoft something it can leverage up.
The competition solution in the immediate term is just the same as it was at the start of the twentieth century. Regulators need access to, and to use, the ability to apply for divestiture orders.
Retail prices of telecommunications services
A couple of things provide a reason for a blog post on telco service prices.
The first is a comment by Alan Asher that Australian telco customers are being abused by SMS pricing. He was commenting on a report that;
Australians are paying the highest prices in the world for text messages, which cost the mobile networks practically nothing but earn them millions in profit each year, industry experts say. Australians are expected to send 20 billion texts this year, more than 20 per cent higher than last year. While the cost of mobile phone calls has declined in the past five years, the standard flat rate for a text message at Telstra and Optus has remained unchanged at 25 cents. At Vodafone, a text is 28 cents.
This makes the fundamental error of trying to report on the price of a component that is only ever bought as part of a bundle.
The same error was made by the ACCC. In releasing their discussion paper for a current review of Telstra's retail price controls the ACCC has also referred to (at Pp14-15)a paper they commissioned on the regulation of fixed-to-mobile calls (F2M).
In doing so they repeat the same error as the one above on SMS. They note the failure of F2M prices to decline as fast as mobile termination (MTAS) prices, but don't mention that National Long distance prices over the same time have continued to fall even though the PSTN OTA prices haven't.
Both criticisms need to recognise that operators have one pool of fixed costs and a relatively smaller pool of variable costs to recover in relationships that by necessity involve buying a bundle of accesses. Operators are not required to apply an eqally proportional mark-up of those fixed costs in proportion to the variable costs, and indeed there is a good theory that suggests that would not be welfare maximising.
Meanwhile, however, Alan Asher in Communications Day on Friday has surmised "we’re predicting a highly active year in terms of enforcement, as ACMA and the ACCC battle it out to ensure they don’t end up named and shamed in ACCAN’s ’sleepiest regulator’ contest!"
As a suggestion he might like to urge the ACCC bring action against those telco plans that talk of "$X worth of calls for only $Y". The value of the calls is what I actually pay for them.
Meanwhile, of course, the report we started this with has got confused by the same thing. No one is really charging 25 or 28 cents for SMS, because you get a certain number included in our "cap". They need to keep the headline single SMS price high to inflate the "value" of the cap.
We don't need any retail price controls, we just need clarity in advertising, and perhaps a concept called a RECAP in the book Nudge.
The first is a comment by Alan Asher that Australian telco customers are being abused by SMS pricing. He was commenting on a report that;
Australians are paying the highest prices in the world for text messages, which cost the mobile networks practically nothing but earn them millions in profit each year, industry experts say. Australians are expected to send 20 billion texts this year, more than 20 per cent higher than last year. While the cost of mobile phone calls has declined in the past five years, the standard flat rate for a text message at Telstra and Optus has remained unchanged at 25 cents. At Vodafone, a text is 28 cents.
This makes the fundamental error of trying to report on the price of a component that is only ever bought as part of a bundle.
The same error was made by the ACCC. In releasing their discussion paper for a current review of Telstra's retail price controls the ACCC has also referred to (at Pp14-15)a paper they commissioned on the regulation of fixed-to-mobile calls (F2M).
In doing so they repeat the same error as the one above on SMS. They note the failure of F2M prices to decline as fast as mobile termination (MTAS) prices, but don't mention that National Long distance prices over the same time have continued to fall even though the PSTN OTA prices haven't.
Both criticisms need to recognise that operators have one pool of fixed costs and a relatively smaller pool of variable costs to recover in relationships that by necessity involve buying a bundle of accesses. Operators are not required to apply an eqally proportional mark-up of those fixed costs in proportion to the variable costs, and indeed there is a good theory that suggests that would not be welfare maximising.
Meanwhile, however, Alan Asher in Communications Day on Friday has surmised "we’re predicting a highly active year in terms of enforcement, as ACMA and the ACCC battle it out to ensure they don’t end up named and shamed in ACCAN’s ’sleepiest regulator’ contest!"
As a suggestion he might like to urge the ACCC bring action against those telco plans that talk of "$X worth of calls for only $Y". The value of the calls is what I actually pay for them.
Meanwhile, of course, the report we started this with has got confused by the same thing. No one is really charging 25 or 28 cents for SMS, because you get a certain number included in our "cap". They need to keep the headline single SMS price high to inflate the "value" of the cap.
We don't need any retail price controls, we just need clarity in advertising, and perhaps a concept called a RECAP in the book Nudge.
Friday, January 22, 2010
Access to public sector information
One of the topics in the Australian Gvernment's agenda on the Digital Economy has been about providing access to public sector information.
My understanding is that this issue was a particular interest of former advisor Tim Watts, who had been a great follower of Tom Watson MP. Today Watson has blogged with pride about the launch of data.gov.uk..
I haven't spent the time looking at this in detail yet, but it certainly looks like an interesting site. One feature is the ability for users to make suggestions about data needs. Onecaught my eye suggesting "Give consumers the opportunity to quickly see the cost of crude oil and fuel cost. Data on oil companies profits per day or per annum. Highlight how much Tax goes to governments."
It is interesting in the context of the Australian Government's failed "FuelWatch" proposal and the endless exercises the ACCC goes through gathering data and reporting the price cycle. But nowhere do they make the underlying data available.
I find this of minor interest because I had a letter published in the AFR many years ago on petrol prices. In that letter I pointed out that the the price of a litre of petrol depended on both the variable cost of oil and the relatively fixed cost of refining and distribution. It would be nice to be able to access all the data the ACCC gathrs on oil and fuel prices to do some better analysis of this. Put that another way, why are we dependent upon the econometric study conducted by the ACCC with neither the data nor methodology being public, only the conclusions.
The Government's Gov 2.0 taskforce concluded that;
Information collected by or for the public sector — is a national resource which should be managed for public purposes. That means that we should reverse the current presumption that it is secret unless there are good reasons for release and presume instead that it should be freely available for anyone to use and transform unless there are compelling privacy, confidentially or security considerations. .
Unfortunately the report did not go as far as what is occurring in the UK. The focus was mostly on the copyright status and the self-reporting by agencies of making data information available.
As I've already noted privately to Government we still have some way to go. One of the portfolio agencies under Digital Economy, the ACMA, publishes information as *.pdf files that are locked from being able to cut and paste from. This includes documents that are made up of mostly numerical data!
Perhaps the officers in the Australian Government should watch out for the forthcoming item in Prospect magazine about which the magazine claims;
Prospect has uncovered the story behind Tim Berners-Lee's work deep inside British government, and his remarkable success at busting open a closed, data-hugging state. ... The story we uncovered will be on the cover of Prospect magazine’s next issue (out on Thursday 28th January). It is a tale of star power, serendipity, vision, persistence and an almost unprecedented convergence of all levels of government. It is the best sort of policy story: one where the policy works, the good guys win, and public interest is served.
Sounds almost better than the Millenuium novels (of which more on another day, perhaps).
My understanding is that this issue was a particular interest of former advisor Tim Watts, who had been a great follower of Tom Watson MP. Today Watson has blogged with pride about the launch of data.gov.uk..
I haven't spent the time looking at this in detail yet, but it certainly looks like an interesting site. One feature is the ability for users to make suggestions about data needs. Onecaught my eye suggesting "Give consumers the opportunity to quickly see the cost of crude oil and fuel cost. Data on oil companies profits per day or per annum. Highlight how much Tax goes to governments."
It is interesting in the context of the Australian Government's failed "FuelWatch" proposal and the endless exercises the ACCC goes through gathering data and reporting the price cycle. But nowhere do they make the underlying data available.
I find this of minor interest because I had a letter published in the AFR many years ago on petrol prices. In that letter I pointed out that the the price of a litre of petrol depended on both the variable cost of oil and the relatively fixed cost of refining and distribution. It would be nice to be able to access all the data the ACCC gathrs on oil and fuel prices to do some better analysis of this. Put that another way, why are we dependent upon the econometric study conducted by the ACCC with neither the data nor methodology being public, only the conclusions.
The Government's Gov 2.0 taskforce concluded that;
Information collected by or for the public sector — is a national resource which should be managed for public purposes. That means that we should reverse the current presumption that it is secret unless there are good reasons for release and presume instead that it should be freely available for anyone to use and transform unless there are compelling privacy, confidentially or security considerations. .
Unfortunately the report did not go as far as what is occurring in the UK. The focus was mostly on the copyright status and the self-reporting by agencies of making data information available.
As I've already noted privately to Government we still have some way to go. One of the portfolio agencies under Digital Economy, the ACMA, publishes information as *.pdf files that are locked from being able to cut and paste from. This includes documents that are made up of mostly numerical data!
Perhaps the officers in the Australian Government should watch out for the forthcoming item in Prospect magazine about which the magazine claims;
Prospect has uncovered the story behind Tim Berners-Lee's work deep inside British government, and his remarkable success at busting open a closed, data-hugging state. ... The story we uncovered will be on the cover of Prospect magazine’s next issue (out on Thursday 28th January). It is a tale of star power, serendipity, vision, persistence and an almost unprecedented convergence of all levels of government. It is the best sort of policy story: one where the policy works, the good guys win, and public interest is served.
Sounds almost better than the Millenuium novels (of which more on another day, perhaps).
Things one might regret
We all do things we might regret. Sometimes that can be because you embarrass your family members.
For example, both my daughters were horrified when I went to the audience of Q&A - they were more worried about hearing my distinctive laugh tha my dumb question. As it transpires I had friends who told me they'd heard me in the audience before they saw me!
Anyhow that's a long lead in to the fact that I've never done anything to match the contribution of the new enator for Ma.
Watch the original and weep, and feel for both Scott Brown and his daughters!
For example, both my daughters were horrified when I went to the audience of Q&A - they were more worried about hearing my distinctive laugh tha my dumb question. As it transpires I had friends who told me they'd heard me in the audience before they saw me!
Anyhow that's a long lead in to the fact that I've never done anything to match the contribution of the new enator for Ma.
Watch the original and weep, and feel for both Scott Brown and his daughters!
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