Governments in the Telco Business: Prudental Investors or Bureaucratic Intruders?

Abstract

Governments around the world are attempting to 'invest' in infrastructure for the perceived 'future needs' of their nations. Locally New Zealand and Australian governments have spent the past thirty years corporatising and privatising formerly government-owned incumbents and liberalising the telecommunications markets by removing regulatory barriers to competition and inducing private sector entry via mechanisms such as access regulation and local loop unbundling. Now government-funded National Broadband Networks are now being rolled out to cope with these future challenges real or imagined. What motivates these government investments that appear to be turning the industry ownership clock back 30 years? What are they likely to achieve? And why can't the market deliver such outcomes? Indeed what are the desirable outcomes?