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Free market causing chaos again

I’ve read the Daily Torygraph most days now, for the last decade or so, ever since that fateful day I stopped draping myself in the Grauniad every morning, as is the wont of most perennially tax-subsidised students. And pretty much most of the time I’ve found it quite a good newspaper, especially with topics such as its Free Country campaign. On the whole it has also seemed unbiased in its straight news reporting.

But then this morning I find myself staring at a this particular headline, in the news section, covering the changes to the UK’s telephone directory inquiries system:

Callers face chaos and high bills as directory rivals replace 192

For non-UK readers, this concerns the number we always used to phone to get through to directory inquiries. British Telecom, a previously government-owned telecom monopoly since opened up to competition, provided a near-monopoly service on this number, from virtually all fixed lines. The article then carried on in the vein of its initial headline, with quotes such as:

Consumers face confusion and price increases rather than the savings they were promised when Oftel, the Government watchdog, ordered the market to be opened up in the belief that competition would cut prices.

Ok, as a proto-Rothbardian I will say that BT were there first on the 192 number, so they should keep this as their private property, rather than be forced to adopt 118 500. So this part of the change displeases me. But others might say BT gained the dispensation of this ‘special’ exchange number through their once being a government owned monopoly, under the old Post Office. So there are liberal arguments both ways.

But can a government ‘watchdog’ legitimately promise anything in a truly free market?

What I find really disappointing about the Telegraph’s piece is that it seems to imply the old Guardian maxim, quasi-public monopoly good, private free market bad, which I thought I’d escaped from all those years ago when I managed to rid myself of Polly Toynbee’s insidious effects on my blank slate brain, when switching to the Telegraph.

The price of freedom is change. And the price of change is choice. And the price of choice is sometimes getting it wrong, before you get it right. You can have the childlike security of only having one choice, to free yourself from making any decisions, but then you open yourself up to monopoly pricing and couldn’t-care-less service, as we used to have with 192. Or you can have a range of choices about which you the consumer have to make difficult decisions, before you hand over your money. Yes, I know, shocking, isn’t it? And until you learn the error of your ways, you might cock it up.

Yes, at first, with more than one number to phone there will be some consumer confusion, some sharp operators profiting from this initial confusion, and some inexperienced operators using flaky IT systems. But then the market will settle down, the sharp operators will be driven out because of their over-priced bad service, and the flaky IT systems will shape up in a process of sink-or-swim.

A whole market range of differently priced operator services will then adjust spontaneously to cater for a whole market range of differently needful consumers. Or if you can’t face all this ‘chaos and confusion’, in the meantime, just phone 118 500, to get the same old BT service. But if you fancy taking a chance with your life, go for something like Orange’s 118 000, which by all accounts from the Telegraph report, seems to me like the best of bunch. Or you could try a range of the other new providers.

The thoughts on Orange, of course, are just my opinion. Everyone else is now free to differ.

Which is fantastic!

Or even better, if you think you can do a better job, open up your own directory inquiries company, as you are now free to do. And make yourself millions serving the consumer better than anyone else, for less.

Which is even fantastic-er!

If we can’t get people to accept the almost insignificant non-life threatening risk of removing the monopoly on a directory inquiries service, how will we ever get them to accept the major perceived risk of changing a monopolised health or a monopolised education system? So please, if any secret libertarian at the Telegraph is reading this, can we drop the Free Market Babies Die in Street Horror! line? Pretty please, with a cherry on top.

16 comments to Free market causing chaos again

  • ed

    Well done on the commetary. It’s an accurate snapshot of a trend imo.

    I’ve had the impression the Telegraph has been in the process of Grauniadization for a while now. Sometimes I put it down to a desire to be more eclectic after 6 years of Blair. There are also signs of Tabloidization too, in the amount of picture space, ‘feature’ sections and headline size. Symptomatic of this are the relatively recent arrivals of Andrew Marr and Armando Ianucci, bothe left of centre columnists.

    Against that, there are still good articles and particularly editorials from time to time. It seems to be more and more of an effort for the Torygraph to produce these as time passes.

    I wrote an e-mail to them telling them my views a while ago and received no reply, my fears remaining unallayed.

    Ed

  • howard

    “..but then you open yourself up to monopoly pricing and couldn’t-care-less service, as we used to have with 192.”

    Without getting all philosophical about it, and in a spirit of fairness, my experience of the 192 service was always very good which is in contradiction to the reports I’ve read of some of the new 118 services.

    Confusing I know but perhaps, you’re letting your preconceptions colour your judgement.

  • E Young

    Who would more likely to be up-to-date with all the latest, ‘installed yesterday’ numbers?.

    I would assume it to be the installer of land lines, i.e. BT.

    All of the others are likely to be at least a few days behind in logging the latest numbers, and if past behaviour is anything to go by, BT will drag it’s collective feet in dispensing said info to other directory companies.

    Ergo, for a while, at least, BT will still provide the best service. Value for money may well be a different matter, depending larely on the cost of each enquiry.

  • Joe

    It beats me why they didn’t make all the new numbers begin with 192.

  • Andrew

    > It beats me why they didn’t make all the new numbers begin with 192.

    The good old EU. European standard for directory enquiries is numbers beginning with 118.

  • Andy Duncan

    Joe writes:

    It beats me why they didn’t make all the new numbers begin with 192.

    That would have been far too sensible! 🙂

    howard writes:

    Confusing I know but perhaps, you’re letting your preconceptions colour your judgement.

    Well you know how you’re supposed to get 2 numbers, for the 40 pence. Did you ever manage to get 2 numbers, before the operator cut you off?

    And it may be pure moonshine, but I remember when Directory Enquiries cost just one farthing, but double digit cost inflation seems to have bumped it up to 40p. Which may be Ok now, with competition, but was an outageous series of price rises, at the time, when they had the monopoly.

    E Young writes:

    Ergo, for a while, at least, BT will still provide the best service. Value for money may well be a different matter, depending larely on the cost of each enquiry.

    Yes, I know, it’s difficult all this turning a government owned monopoly into a competitive market. And in a way, who can blame BT for trying to maximise their profits? And why does the regulator continue to single them out for abuse?

    On Rothbard-World of course, BT would be able to refuse to carry other people’s calls, if they felt like it, though this would mean eventually they’d go out of business to people more accommodating, to the sort of companies which allow people to use their networks for things like Internet traffic. And where would we be without them?

    But given that we are where we are, where people can still use 118 500 to get to BT, if they wish to remain using BT, and from where we were before, more competition has got to be a better thing.

    My main beef is with The Torygraph. They do seem to be adopting more of an anti-free market tone, of late, and as most of the rest of the press is already anti-market, in one form of another, this is a disappointment.

  • Andy Duncan

    Andrew writes:

    European standard for directory enquiries is numbers beginning with 118.

    Aaaaaarrrrrgggggggghhhhhhhhhhhhhhh!!!!!! 🙂

    The bells, the bells….

    It’s probably got something to do with getting rid of happy hour in pubs, too 🙂

  • Tim

    Andy Duncan wrote:

    My main beef is with The Torygraph. They do seem to be adopting more of an anti-free market tone, of late, and as most of the rest of the press is already anti-market, in one form of another, this is a disappointment.

    You’re right, but isn’t the paper’s trend a reflection of the Party’s own tendencies? When all’s said and done, The Telegraph is a Tory-supporting paper. Iain Duncan Smith and his crew have evidently decided that Labour is electorally vulnerable on its left flank – depressingly, they’re probably correct, hence the promises about student grants and keeping the NHS. So as the Conservatives downplay the free market to reassure the masses, their mouthpiece follows suit. Shame, that, because it really is the best newspaper I’ve ever read.

  • Tony H

    The 118 number is bad enough (and yesterday I had a confusing letter from AXS attempting to explain its three new 118 numbers & pricing) but what about that TV advertising campaign to tell us the great 118 news? I mean, the one featuring the two idiots with 1970s hair-dos. Surely one of the most weird, ambiguous, baffling, expensive, irritating, wasteful campaigns waged on TV – ?

  • John H

    Andy Duncan wrote:
    I’ve had the impression the Telegraph has been in the process of Grauniadization for a while now

    Or if you think you can do better, open up your own newspaper and offer people a more idealogically pure read in the morning!

  • Paul Marks

    The company that lays the telephone cable (if cable is what is used) should be able to decide who (if anyone) uses the cable. Of course the property may not have being acquired justly in the first place, but that is true of all property (apart from farm land in Iceland). What happened in the mists of time does not give anyone to steal anything NOW.

    Forcing a company to let other enterprises use its property is exactly the sort of phony “marketism” that I dislike.

    It reminds me of the so called deregulation of electicity in some States of the U.S.

    This “deregulation” always seems to involve price controls and some companies being forced to let other companies use their property.

    This is not free enterpise – it is people taking the absurd perfect competition model in neoclassical economics books seriously.

  • Andy Duncan

    Tim writes:

    Iain Duncan Smith and his crew have evidently decided that Labour is electorally vulnerable on its left flank

    Harsh. But fair. (sounds of a part-time Tory supporter, blubbing)

    John H writes:

    Or if you think you can do better, open up your own newspaper and offer people a more idealogically pure read in the morning!

    Yowzah, baby. Love it! 🙂

    C’mon, give Mr De Havilland a chance, and a few more years. From little web sites, named after illicit backstreet publications, do newspapers grow. If the market should support “The Daily Samizdata” of course.

    Paul Marks writes:

    This is not free enterpise – it is people taking the absurd perfect competition model in neoclassical economics books seriously.

    Yes, I had to think about this too. Telecoms is really complicated. I’ve worked in telecoms for the last ten years, for Vodafone, Orange, and BT, right in the heart of their IT operations, and I’m still struggling on this one. Again, my main beef is with the Torygraph for adopting this anti-market attitude. The economics of recently-privatised telecoms I shall have to leave to better philosophers than I. It’s a right old banana.

  • Paul Marks is of course right, we must aways beware not to applaude when we are fobbed off with phoney ‘marketization’ schemes. The free market is good, right and just not because of some neo-classical cock and bull stories about efficiency or competition but because it is the only system compatible with preserving human liberty. Much of what passes for the free market is nothing of the sort. Only the genuine free market can maximise our welfare while preserving our liberty.

  • EU Delenda Est

    Andrew and Andy Duncan – Loathe as I am to disprove any grim theories about the EU, I do so with reluctance. But I live in France and the Directory Assistance service is 14. Police is 17 and Fire/Ambulance is 18.

  • A_t

    aren’t you all missing the point? The Telegraph piece is reportage, nothing more. It may be the case that, once the market settles down, the directory enquiry system ends up cheaper & easier to use, but at the moment, it *is* confusing; the numbers are harder to remember than before, & most people aren’t bothered about having a choice; they just want to know the phone number, and 192 seemed quite satisfactory. Further, it’s no cheaper as far as I can see, & the people now try & fool you into letting them connect you to the number you were after (for twice the normal rate, without informing you of this).

    Any value judgement as to the virtues, or lack thereof, of markets had no place in this piece, at least from the mouth of the journalist, although if this is a short-term effect, perhaps they could have found an analyst who could have explained it.

    What I don’t understand is, what would you have had them do differently? pretend it was actually going well & people weren’t confused?

  • I work in Telecoms and have been watching the 118 saga closely. Of course, 118 has been running in parallel with 192 for a long time and if people bothered to look at the flyers in their bill it wouldn’t have been too much of a surprise….

    I think the principle of liberalised DQ is fine. However, I think it should have been a shorter number, maybe 4 digits, giving scope for up to 100 suppliers rather than the theoretical 1000 118 can support (118000-118999). Keeping 192 for the Customer’s chosen favourite DQ (changable on request) might have been Ok as well!

    I know numbering specialists who can “bore for England” on the topic of the National Numbering Plan & how Oftel have managed to make such a Pig’s ear of it over the years.

    It took us only a couple of hours to make a routing decision for our Business 118- we just ask users to dial 118 and the systems route to our chosen supplier- one that is cheap, appears to use staff who know what a Woolworths is and don’t offer to connect the call for silly rates. We will keep an eye on the average call holding times and check for feedback to validate the choice as the market rationalises and the chaff fall by the wayside.

    What is interesting is that if you have service from another Telco rather than BT (Or Kingston in the Hull area) which 118 numbers you can access are entirely at the whim of the Telco. This is entirely proper in a free market, however the UK fixed phone network is somewhat distorted by the continuing quasi-monopoly of BT and the other big boys only investing in profitable stuff, i.e. mostly business customers.

    As to the Mobile market, is that a shining example of free market in action? No, because whilst there are four networks supposedly competing against each other, they are beholden to other carriers for the backbone & interconnect to the PSTN.

    There are emerging solutions of local community carriers for internet and the like which should be a good thing provided Oftel (or Ofcom, the new lumbering fledgling super-regulator) don’t bollox it up by regulating it into oblivion. There is an obvious libertarian role for Ofcom as far as radio spectrum goes- it is a limited commodity so they need to police it to the extent that carriers can do what they want with their allocation provided it doesn’t dump on others, i.e. cause interference.

    I don’t know what the answer is for Telecoms regulation- I’d like to see ISPs and carriers less encumbered by regulation but- and this is a big but- they need to be more transparent about what you are getting from them so that you can make sensible decisions about giving them your business.