Joining the blackout

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BBC World Service only leads to Ping Pong

I found something I like about being in Auckland. As I was driving to work today I channel surfed in the hope of finding a decent National Radio FM signal.

To my surprise I came across the BBC World Service on 801 AM - great - I now have a choice between two commercial free newsgeek stations. I stopped listening to commercial radio a long time ago as I find saturation level advertising intrusive and annoying.

Tonight I camped at a pub in Onehunga to watch the cricket. On my way home, just after 11pm I put my radio back on the Beeb and found an interesting technology programme, Digital Planet. Today they looked at the growth of open source software, including discussion of a European Union Commission report that found that in 'almost all' cases long-term (business) costs could e reduced if businesses dropped proprietary software (such as Microslop) in favour of open source solutions. I am sure there is probably some right wing fruit loop somewhere in the world who thinks open source is a front for communism.

They also had a bit of discussion on how bloggers are holding big business to account, which certainly caught my attention :) Sadly I missed some of this item as I was unable to tune my home radio to the same frequency. But on going out to the car I ended up meeting one of my new neighbours who invited me to meet the flat and have a game of ping pong. Great to find the neighbours so friendly

Stella the cat is also very friendly, in fact I met her almost as soon as I arrived here :)

So if my car stereo had not randomly stumbled across BBC World Service this morning, I would not have met the neighbours, making it highly unlikely I would have finished the day with a midnight game of ping pong. Funny how things work out sometimes.

Telecom should never have been privatised

Yesterday the Dominion Post published an article from Chairman of the Business Roundtable, Rod McLeod, arguing against the need for further regulation of Telecom. Yet McLeod and the Dominion Post failed to mention a blatant and obvious conflict of interest - Rod McLeod is also a Director of Telecom (hat tip DPF)

McLeod concluded, without citing any real evidence, that "New Zealand has benefited hugely by moving from a state-owned telecommunications monopoly to a competitive (sic) private industry with relatively light-handed regulation. We should keep it that way."

Bullshit. The current fracas over broadband is a direct result of the sale of Telecom by the Labour Government in 1990. While the Business Roundtable claim to be 'free marketeers' McLeod article is just yet another example of how often they run to the defence of private monopolies.

Richard Prebble sold Telecom in 1990 for $NZ4,250 million. Last year Telecom made a $NZ 1.3 billion dollar profit in 2005 alone. Even without some of the more extreme "efficiency" drives (read job losses) Telecom could have made a significant contribution to public funds over the past 16 years if it had stayed in public hands.

It would be nice if some people who support the privatisation of Telecom would actually admit that also selling the local loop was a big mistake, and it is a mistake we are still paying for. The Government could have made free local calling a condition of access to the local loop, and told Telecom that if they wished to charge for local calls they could create their own network (oh the irony). After all, Telecom did not create the local loop, it was created by at least two generations of taxpayers.

One argument that is often used in support of privatisation, especially in "capital intensive" industries, is that sometimes the private sector can provide greater investment than a Government (stop giggling..) Telecom provides a very good example of how this is often not the case. As CAFCA pointed out in their submission on the Overseas Investment Bill in 2005, since privatisation, Telecom have regularly run down their assets at the same time they gifted whopping big dividends to their overseas shareholders.
"Telecom’s overseas owners have failed to live up to the promise of making new technology available to New Zealanders. The company closed off options rather than developed new ones. Its overseas owners have sacked thousands of employees and have extracted billions from New Zealand in profits and capital, while over-charging for services (such as broadband networking to the home) which will be the backbone of the economy in the future, virtually killing others (such as ISDN) in the past, failing to develop services which are commonplace overseas until forced to, and using every possible means to keep out the competitors who would not have been necessary had it been providing a decent service.

From 1995 to 2004 it paid out more than its net earnings in dividends (reported earnings of NZ$6,464 million and dividends paid out of NZ$6,698 million), for most of that time, its capital expenditure barely covering reported depreciation. It was running down its assets. More recently it has used its cash to invest (rather unsuccessfully) in Australia rather than develop the extensive new services needed in New Zealand."

(my emphasis)

CAFCA also quote economic commentator Brian Gaynor who described the privatisation as follows (“Testing years ahead for Telecom”, NZ Herald, 26/5/01):
"The Ameritech/Bell Atlantic/Fay, Richwhite, Gibbs, Farmer syndicate walked away from Telecom with a realised capital profit of $7.2 billion. In addition, the telecommunications group paid over $4.2 billion in dividends in the 1991 to 1998 period, more than half to the consortium members.… These are extraordinary figures for a company that is supposed to be at the cutting edge of new technological developments."

No wonder Sir Michael Fay sang 'Sailing Away' - it is the perfect theme tune for a pirate.

Perhaps if people starting talking seriously about the renationalisation of the local loop Telecom might suddenly start being more reasonable. Given the fact Telecom have been ripping New Zealanders off for years, $1 ought to be adequate compensation. When the Government bought the rail tracks it actually ended up costing them $2 because an official did not have a $1 coin in his pocket. If officials are ever in the position of buying back the local loop they should ensure they have correct change - Telecom don't deserve $2.

Tags: Privatisation, New Zealand, Internet, Corporates, Telecom

PS: Why does the Microsoft Outlook dictionary refuse to recognise 'renationalisation' as a word, and suggest 'denationalisation' as an alternative? More bloody corporate newspeak!

TV3 cites Wikipedia

TV3 News tonight had a story looking at legal recognition of "civil unions" in New Zealand and other parts of the world.

When listing some of the other places that have legalised either civil unions or same-sex marriage the reporter made a very interesting citation - "according to internet encyclopaedia Wikipedia".

Is this the first time TV news in NZ have cited Wikipedia as a source? Does anyone know of any other similar televised citations? I have no doubt reporters have used for stories in the past, so its quite nice for this to be acknowledged. Was this "slipped in" during the quiet summer break?

For my own writing I find Wikipedia a valuable source of "research leads" - that is I look at Wikipedia for the overview and then try to confirm the information from another source (I am generally looking for more detail anyway). Come to think of it, this is not too different to how most people would use a paper based encyclopaedia.

Internet banking and security issues

The Sunday Star Times and DPF report that a hacker accessed internet banking accounts by using keystroke spyware installed at an internet cafe.

While I do not doubt there are security issues with internet banking, I suspect a great deal of the anxiety is due to internet banking being an unfamiliar technology.

I do not believe that people, even those who are particularly security conscious, choose to use a form of payment on the basis of a rational assessment of the risks. I came to this conclusion while working behind a checkout counter during my student years. Many customers, especially those of the older generations, preferred writing cheques to using EFTPOS, and some even claimed that cheques were more secure. From witnessing over 100 transactions in a week it was obvious to me that EFTPOS was far more secure. Faking a signature on a check is relatively easy with preparation, especially if the forger can sign the check in front of the teller with apparent confidence.

Unlike DPF I do not think the two-part identification adopted by ASB and BankDirect is a great improvement in security. With this system a customer is sent a text message containing a specific second password to enter before money can be transferred. IMHO this just creates a greater incentive for people to take off with my cellphone. If they have taken the time to keylog my other password - nicking the cellphone is a cinch. Especially in an internet cafe, where spodders have their attention elsewhere (note I am not a thief, but a victim of this in London).

Whether it be conducted by cheque, EFTPOS, or handing over wads of cash, no method of banking is ever going to be 100% secure. Its always going to be a tradeoff between greater security and usability. If intenet banking is twisted up in security knots, people will stop using it, especially those who are less confident with computers.

For a few months my bank insisted that I change my password for access to internet banking every month. I was unable to recycle a set of passwords, I constantly had to think of new ones. This immediately stuck me as being counterproductive, as it increased the chances that people would write their passwords down. To make matters worse, I happened to be overseas one time my password expired, and the only way I could regain access was to ring the bank in New Zealand. Suffice to say I did not bother making a toll call from Europe, but it was highly inconvenient as it left me with no way of knowing how much money I had in my account before it was spent on German beer (yummy!) etc.

On the couple of occasions I was a victim of card fraud while in the UK, the ability to access a live statement of my account by internet banking allowed me to catch and identify the fraud within hours. IMHO it would be terrifying to find loads of fraud on the statement at the end of the month!

I personally like the system adopted by HSBC in the UK, whereby your pass number stays the same, but you are asked for three different letters of the passcode each day. For example if your password was 123456, on one day the system may ask you for the 3rd letter of your passcode(3), the 1st letter of your passcode(1) and the 6th letter of your passcode(6). While not entirely foolproof against keylogging (nothing is), a significant advantage with HSBCs system is that the full password is never revealed.

Perhaps restricting access to internet banking to a certain range of IP addresses could cut down the chances of fraud, especially as it would minimise the chances of overseas based crims accessing NZ internet banking accounts. If you were going overseas you could tell your bank to remove this restriction (like global roaming on cellphones) perhaps replacing this with an alternative type of verification for the time you were overseas.

Ultimately, the best solution may be an additional piece of hardware, such as a thumbprint reader or card swipe and pin. But I bet Bonny and Clyde already know how to make the heist on that one.