Thursday, November 03, 2005


Cycling home this evening through the dark and bleak backstreets of South London, listening to stories of rioting in the suburbs of Paris and the degree to which national governments seem to be completely out of touch with the needs of their constituents, I started thinking about this Amsterdam development, and arrived at the following question: Isn't this project, and all the others we've seen recently (UTOPIA, Catalunya, Lafayette, the various French projects, and utility fiber in Scandinavia) actually a local/regional repudiation of the multi-100-billion euro privatization philosophy born of Thatcherism/Reaganism? This whole process (to which I owe my current employment, let's not beat around the bush), was supposed to stimulate competition, which in turn would deliver greater efficiency and better services. However, it looks as if some local and regional governments are coming to the conclusion that the market has failed to deliver what is needed in the time frame required, and are accordingly taking matters into their own hands.

This is particularly ironic in light of the fact that one key principle of the Reagan/Thatcher philosophy was devolution, or the passing of certain policy decisions/responsibilities from central government to the local/regional level - either (idealistically) because local people know best what they need, or (cynically) because it passes the buck more effectively. With projects such as these, however, devolution grows some teeth. The only problem is that these teeth may now be implanted firmly in the buttocks of privatized telcos (in Europe for the most part, read "only partly privatized telcos"), and those who bought into them via the privatization process. Besides the largely forgotten retail investors, no one has been more badly burnt over the past six years than the domestic institutions who bought into EuroTelco Privatization Inc./NV/Plc/AG/AB/SA/Spa, which makes the irony even richer that the previously unnamed third investor in Amsterdam is none other than ING (in line with what I suspected in my earlier post).

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