Its easy to agree with the DomPost that the privatisation of Telecom was stupid because ideology dictated that there would be no regulation of the resulting profit-driven vertically integrated natural monopolist. But I would take some convincing that a buy-back makes sense at this point. Three things make me prefer using effective regulation in this case.
- Governments often do badly on these big deals, whether buying or selling. There is no transparency, a huge amount of value on the table in one deal, and I just don't have much confidence that "we" would come out the other end feeling good about the price.
- A nationalised Chorus would still be difficult to handle. The agency problems that regulation aims to tackle wouldn't go away. So we'd still need something like a regulator if we wanted to keep such a firm from running off the rails.
- We have a decent regulatory model already built. Now that Chorus is vertically split from the rest of Telecom, we could use the same style of building block regulation that has been developed (at great cost) for the energy networks over the last few years.