11.26.06
Doing justice to O’Brien
The conventional wisdom says that Denis O’Brien Is a tax-avoiding, politician-bribing, overweight, over-rich bastard with dodgy hair. So when 12 ordinary citizens awarded him €750,000 in damages against the Mirror Group last Thursday, I was absolutely flabbergasted. I never thought he’d get a fair hearing.
By awarding such a large sum of money to a billionaire with a big wad stashed under his mattress, the jury sent a clear message. It wanted to punish a newspaper for printing blatantly defamatory lies and then refusing to apologise. A newspaper that was keeping its fingers crossed that the Joe Soaps on the jury would be sufficiently poisoned by a decade-long nightmare during which O’Brien’s reputation has been almost destroyed.
Fortunately, I was wrong. There are Irish people who believe that just because you’re rich doesn’t mean you’re a crook.
Media caterwauling over the size of the award is in full swing, but the jury’s logic was flawless. To make an impact, the award had to hurt. The Mirror admitted that its original story — claiming O’Brien had bribed Ray Burke to the tune of €30,000 in order to get the licence for 98FM — was wrong. But that didn’t stop its senior counsel dragging the businessman through a litany of unproven allegations that have consumed so much time and about € 100m in costs at the Moriarty tribunal.
Far from damaging him further, all it demonstrated to the jury was that the Mirror hadn’t learnt its lesson. A graceful apology would have been cheaper than using O’Brien as a punch bag.
Everyone brings their own agenda to the O’Brien story. Mine is straightforward: in 1994 O’Brien gave me a job with Esat Telecom. Working for Denis was a crazy experience: his management style swung from tantrum-throwing rows to party-throwing love-ins.
One day you were about to be fired for not addressing a letter correctly, the next he was sending a doctor and a flask of chicken soup round to your house because he’d heard you were sick. It was nerve-wracking, fantastic craic, and a superb education in business management.
With banks threatening to pull the plug, aggressive sales targets to be met, and civil servants to keep happy, it was a high- pressured and crazy environment.
Eventually I couldn’t stick the pressure any more, and when the mobile phone licence was won, I went to work for Esat Digifone, in which O’Brien had no executive role. So no, I didn’t get to cash in.
Instead, I may have to pay the costs in relation to evidence I was required to give to the tribunal. But I don’t begrudge a penny to those who did become millionaires out of Esat when BT bought the business. They worked hard and it paid off.
It’s depressing that some people remain convinced that O’Brien is rich because he was “handed” a licence at the knock-down price of IR£15m. Either he bribed Michael Lowry, the then communications minister, to get it, or he got lucky. I admit I am biased, but I am absolutely convinced Esat won that licence fair and square.
To the “got lucky” brigade I say: many entrepreneurs got rich in the dotcom fever of the 1990s; not many have repeated their success. O’Brien has built companies in both the radio and telecommunications industries all around the world. You can’t dismiss repeated success as luck.
Others complain that having been “given” a licence to print money, O’Brien hot-footed it to Portugal to avoid capital gains tax when he sold off Esat, but this country has lots of tax exiles — Tony O’Reilly, Michael Smurfit and JP McManus among them.
Every accountant in Ireland will advise their clients to get involved in schemes to avoid tax. But only O’Brien seems to be singled out for abuse.
Personally, I think he should pay tax here, but you can’t blame him for feeling disloyal to an exchequer that is funding the inquisition at Dublin Castle. The final bill for that exercise will be a multiple of O’Brien’s tax liability.
As for winning the licence on the basis of a bribe, for that to be true would require a conspiracy worthy of an Oliver Stone movie. Two dozen civil servants have given sworn testimony that Lowry had absolutely nothing to do with the decision to award
Esat Digifone the mobile-phone licence. Michael Andersen, a consultant used by the department, has said that not only was Esat’s bid the best in the competition, it was the best he’d ever seen. Yet the conspiracy theorists insist on propagating bizarre scenarios in which Lowry was of assistance to Esat.
A favourite story goes that the original plan to auction off the mobile-phone licence was going to be disastrous because Esat couldn’t afford the expected price of IR£40m-IR£50m.
A few weeks before the bids were due in, the terms of the competition were changed. Only a fee of IR£15m had to be paid, which gave Esat a chance to compete with big international players such as AT&T, which was also after the licence.
So did Lowry cap the fee in order to help Esat? No. The European Union had just ruled in relation to a row about competition for a second mobile-phone licence in Italy. The EU said it wasn’t fair that the winner had to pay an enormous fee, decided by auction, for its licence, while the incumbent state operator had a free licence. In the interests of fair competition, the state operator would have to pay the same fee as the new entrant.
You can imagine the cursing in Telecom Eireann when that ruling came in. It meant that if the winner of the second mobile- phone licence in Ireland had to pay IR£50m, then Telecom’s mobile wing, Eircell, would have to pay IR£50m too. So the competition was changed from an auction to a capped fee. But that wasn’t to help Esat, it was to help Telecom Eireann.
However, the story that Lowry capped the fee to help O’Brien is sexier and easier to understand than some boring explanation to do with EU competition law, so that’s the one you’ll read about.
I asked O’Brien recently why he continued the legal battle to clear his name. “You’ve all that money; would you not just go home and forget about it?” He didn’t hesitate: “No,” he said. “You have to fight them. You can’t let them get away with this.”
Now that a High Court jury has vindicated him, I have no doubt O’Brien will be spurred on in his fight.
But I fear the court of public opinion will not give him a victory as clear-cut as the one he won last week.
Update: this column was called “courageous” and “excellent” on Marian Finucane’s show this morning. Listen here and fast forward to 1hr22. 
Darren Mac an PhrÃora said,
November 26, 2006 at 7:42 pm
“Update: this column was called “courageous” and “excellent” on Marian Finucane’s show this morning. Listen here and fast forward to 1hr22.”
Well done!!! I don’t know him so I don’t find the story particularly interesting- unless of course he wants to give Gael-Taca some money!!!!
Of course all victories over the thrashy tabloids are great. The good thing about this victory was that he got a lot of money. Usually tabloids allow money for court-losses so that they can write their vile.
He should use money to set up a new paper- a tabloid that is not thrashy!!!
Darren Mac an PhrÃora said,
November 26, 2006 at 7:52 pm
“But I fear the court of public opinion will not give him a victory as clear-cut as the one he won last week.£
Most people don’t know who he is. For those that do, they will judge him holistically in how he given money back to society ie. through charities etc.
If I had as much money as him I would not be able to spend it and would give most of it to charities, and Gael-Taca and Gaelscoileanna et. al.
He should seriously set up a tabloid paper.
Stephen Neill said,
November 26, 2006 at 9:16 pm
“Update: this column was called “courageous” and “excellent” on Marian Finucane’s show this morning.
Well deserved praise Sarah – One of the greatest flaws in the Irish character is the inability to appreciate the skill and wisdom of the true entrepeneur who sees an opportunity and takes it. The begrudgery gene seems to be disproportionately dispersed in this land of ours. Personally I find the likes of O’Brien and O’Leary inspirational. I have never met Dennis O’Brien but I have had the opportunity to talk to Michael O’Leary at length and I just love the way that he and others like him cut through the various self imposed neuroses that stop us fulfilling our full potential. I can even put a religious slant on this and suggest that if we have God given gifts we should use them and resist the attempts of others who try to thwart us out of their own jealousy and insecurity. I am not suggesting that either Dennis or Michael would see it in these terms but I think regardless we need to get over our issues with others success and perhaps take a leaf from their books and reach for new heights in our own lives. It is people like this that can let us believe that we CAN when all around us we are surrounded by those who say we CANNOT!
Stephen
john of dublin said,
November 27, 2006 at 1:31 am
Well written Sarah.
tom said,
November 27, 2006 at 12:28 pm
sent a doctor and chicken soup around when he heard you were ill. ie made sure to satisfy himself that you really were ill and not malingering.
tom said,
November 27, 2006 at 12:33 pm
“One of the greatest flaws in the Irish character is the inability to appreciate the skill and wisdom of the true entrepeneur who sees an opportunity and takes it.”
If anything the reverse is true. The very wealthy are treated with far too much respect in Ireland and there is an embarrassing tendency to applaud those who have no obvious admirable qualities and have done very little other than make large amounts of money.
And before we get carried away let’s just remind ourselves that ‘entrepreneur’ Denis O’Brien made his money in state-controlled markets free from the pressures of real competition.
Paul said,
November 27, 2006 at 1:32 pm
Well done Sarah, a well written piece — can you promise though that this will be one of your last piece/post/comment relating to Dennis O’Brien.. please please..
Sarah said,
November 27, 2006 at 3:39 pm
yes Paul. last post for a while:-)
Tom, that’s just shite about competition. Radio is extremely competitive and the fixed line telecoms business was ruthless. The mobile industry did go a bit oligarchic after a few years but say in the Caribbean, Digicell just wiped Cable and Wireless off the map.
NOW Gerry, I’d like some grovelling on the auction front. In the column I have explained why there was no auction for the GSM licence and as for those 3G auctions. HA! The auctions that sparked the collapse of the telecoms industry and the tens of thousands of layoffs that ensued?And still no networks? What a disaster that was.
tom said,
November 27, 2006 at 3:52 pm
Radio is not “extremely competitive”. It just isn’t. You need a license to compete, and licenses are awarded and regulated by the Government, which has no interest in over-supplying the market. Denis O’Brien seems to excel in making money out of regulated businesses dependent on the award of licenses. Read into that what you will.
And why on earth would Gerry apologise for his comments about the 3G auction in the UK? He was exactly right. The Government auctioned the licenses and gained BILLIONS of pounds for the taxpayer. If senior executives in private companies overpaid for them that is their problem.
The Government acts for the people, and if they are doing their job they extract maximum value from whatever assets they are selling. It might be worth asking why in Ireland particularly this doesn’t happen (the Shell / Rossport deal being only the latest example). Of course there always seems to be a special reason why some concession or other went for less than the market rate, but I would suggest that Occams razor might come in handy here, particularly given what we know about irish political culture.
As for “still no networks” – I think I can survive without Pimp My Ride on my mobile phone, or whatever essential service it is that 3G networks provide.
Sarah said,
November 27, 2006 at 3:56 pm
tom , 98FM and 104 tore strips out of each other. It doesn’t matter if they have licences or not, they are competing with all the other radio stations, of which there are many. Do you think RTE thinks its not competing when it sees its market share being stripped away weekly by the local radio stations. Radio is one of the most competitive markets there is!
Gerry quoted the 3G licences in comparison with the 2G licences….and I explained in the column why we couldn’t have an auction.
The governments did get windfalls from the 3G auctions BUT they then lost millions in tax revenue when all the workers were made redundant. Consumers lose too because
a) that money is going to be recouped by the operators in higher prices
b) the services don’t improve.
Its not just about collecting a cheque.
fmk said,
November 27, 2006 at 4:15 pm
“The Government acts for the people, and if they are doing their job they extract maximum value from whatever assets they are selling.”
the objectives of the uk auction were as follows:
i Utilise the available spectrum with optimum efficiency;
ii Promote effective and sustainable competition for the provision of
third-generation services; and
iii Subject to the overall objectives above, design an auction that is best
judged to realise the full economic value to customers, industry and the
taxpayer of the spectrum.
according to the NAO report into the auction, “The Government’s overall aim was to secure the long-term economic benefits of 3G services for UK consumers and the national economy. The first and second objectives of the auction, to promote efficient use of the spectrum, and to promote effective and sustainable competition, were of particular importance to achieving this aim.”
extracting maximum value was not an objective. on the contrary, the NAO report has this to say of the third objective: “This objective was worded so as to make it clear that the interests of the industry and consumers should be taken into account, rather than to mean simply maximising the proceeds for the taxpayer.”
six years on, with the benefit of hindsight, how anyone can defend the auction process astounds me.
tom said,
November 27, 2006 at 5:26 pm
Raised 22 billion pounds, 3G services up and running, mobile phone charges comparable to those in the Irish market. What’s the problem?
As for the idea that if only the Government gave business more freebies they wouldn’t make people redundant and would deliver services cheaper – please tell me nobody is quite that naive.
fmk said,
November 27, 2006 at 6:41 pm
1) raised 22 billion in the uk – i’m repeating myself with this, but it doesn’t seem to be getting throught to you, so here goes one more time: how much was lost because bidders did not act rationally, as the economists expected them to, and instead acted irrationally, as humans do? tax revenues have been forgone. research and development has been curtailed. jobs have been lost. and the damned service is barely there, even six years into the 20-year licence cycle.
2) 3g services up and running – this is six years on. 3g take up is about 6% in europe, less than 3% in the us. up, yes. running? no.
3) comparing mobile charges to ireland and trying to suggest that is something good really is dumb. we have the highest revenue per user figure in europe, more attributable to high costs than high use. the fact that costs are so high clearly suggests that the consumer – even the non 3g consumer – is the one paying for the money the uk exchequer pocketed in 2000.
as for government giving business freebies – i for one have not and never would argue for that. what i am trying to point out is that the auction process resulted in too much money being paid for the licences. why? because economists thought businesses would act rationally and businesses just do not act rationally (to demonstrate how irrational business can be – we saw telecoms companies bidding high and then pulling out, forcing up the price their rivals would have to pay for the licence, something somehow not foreseen by the economists d’oh?). ultimately, that 22 billion “won” by the exchequer in the uk has to be paid back by consumers. the companies won’t simply right off the amount as a sunk cost.
you seem to think it was a case of robin hood, the government robbing the rich businesses and passing the money back to the poor citizentry. it wasn’t. (and the poor citizeny hardly even saw the money anyway, as it was used to pay off debt, not fund services).
even based on the stated objectives, the auction process was a failure. the long term interests of industry and consumer ended up playing second fiddle to how much the government could make in the short term.
tom said,
November 27, 2006 at 11:23 pm
“how much was lost because bidders did not act rationally, as the economists expected them to, and instead acted irrationally, as humans do? tax revenues have been forgone. research and development has been curtailed. jobs have been lost.”
I don’t know. Do you?
By definition, even if they recouped the entire 22 billion through increased charges solely to UK customers, that would simply represent a transfer of 22 billion from consumers of mobile phone operators who hold a 3G license to taxpayers. What’s the problem with that? Nobody is holding a gun to anyone’s head here. You don’t HAVE to use that mobile operator.
Job losses sounds very unlikely – are there any concrete examples of this?
Why should I care about 3G adoption in the US?
Pete said,
November 28, 2006 at 12:32 am
Based on my insider knowledge (I worked for Marconi at the time), it was definately the phenomenon of 3G license auctions that triggered the collapse of the telecoms industry, and without them the 3G networks would have been up and running long ago. The 22 billion or whatever wasn’t free money, it was almost the entire capital, assets, and borrowing capacity of a major industry.
Although auctioning the licenses was a mistake by politicians, I don’t blame them for wreaking my industry and making me redundant. No, the blame lies with the senior management of the telecoms industry. They are paid big bucks to take good business decisions, and hocking the company to pay so much for a license that it cannot possibly ever show a profit is clearly not a good decision. Also, spending so much on a license that you can’t afford to actually build a 3G network is clearly not a good decision.
I’d be interested to know if the banks who loaned the money to buy the licenses lost out? The more I learn about how banks operate, the less I understand.
Conor Lenihan said,
November 28, 2006 at 4:34 am
There are two arguments against auctioning bandwidth:
1. Selling state assets at market value to companies is wrong because then they ‘pass on’ the high costs to the consumer.
This is impossible. Businesses always set their prices at the maximum the market can bear. Even if you gave each of the licence holders a billion quid back tomorrow, none of them would lower prices. The floor for prices is the marginal cost of providing the service. The debts are sunk costs. If the company cannot service its debts it will go bust and its assets will be sold on debt free to a new operator while the shareholders and banks scream blue murder.
2. Debt servicing costs will reduce the ability of the company to roll out sexy services to consumers.
The bidders were all transnational companies. Several had obtained 3g licences elsewhere at next to no cost and had other revenue streams. Funding the rollout came from group revenue. If any of the 5 licence holders rolled out too slowly they would lose customers to the faster movers.
Rollout did not occur faster in countries where licences were not auctioned. eg Spain. The real reason that we are not all making video phone calls now is because nobody want to. They misjudged consumer demand.
But it was imperative for the phone companies to peddle these myths as they had so much to gain if the licences were not auctioned.
The mobile phone industry has not collapsed from a consumer point of view. The service just got cheaper. The state got a windfall. Margins slipped and the shareholders got raped. woo hoo!
We sold our 2g licence for a few 500 euro lunches and a fifteen million pound tip and were rewarded with some of the highest mobile phone call costs in europe for several years afterwards. Eircom could well have afforded to pay market price for their licence. After all, they have now assumed 4billion of debt and seem to be plodding along nicely.
To be fair to Fine Gael, I think it is quite possible that they took some small donations and then awarded the licence independently and that they capped the licence fee out of a deranged belief that eircom couldn’t afford to pay fair value and needed a sub.
Sarah said,
November 28, 2006 at 10:41 am
not bad points Conor but you are forgetting that the government OWNED Telecom Eireann at the time. In some respects they might as well have charged £1 for the licence because with TE having to pay the same, there would be a net effect on the Exchequer of zero.
I am STILL waiting on Tom, Leon and Gerry to ACKNOWLEDGE that the 2g licence couldn’t be auctioned.
tom said,
November 28, 2006 at 11:16 am
Why couldn’t it be auctioned?
Sarah said,
November 28, 2006 at 11:34 am
BECAUSE EIRCELL WOULD HAVE TO PAY THE SAME PRICE!!! AND THE GOVERNMENT OWNED EIRCELL SO WHAT WAS THE BLOODY POINT IN TAKING 50M OF DIGIFONE AND USING IT TO PAY THEMSELVES TO PAY THE EIRCELL FEE AND JUST MAKE THE ACCOUNTS IN EIRCELL HARDER TO BALANCE. JEEEEEEEEEEEZ.
Leon said,
November 28, 2006 at 11:37 am
I don’t understand the point you are making regarding TE. If TE and the satae are treated as the same thing then the question of TE being forced to pay for the license is just a bookkeeping issue. The state transfers 150 million to TE on tuesday and TE transfers it back on wednesday. As I say I don’t understand the point you are making.
One of the reasons we have relatuveky little 3G is technical, it is only now that the technology is coming on stream in a reliable way. Nokia’s 3G doesn’t work for example. Nortel aren’t in the 3G business.
If businesses choose to act irrationally that is their business. (Ha Ha) What societal benefit do the Koreans and Japanese have that we don’t here? Who cares if we have 3G?
Finally there is a utility to ensuring that auctions of state assets are like Caesars wife.
I would however like to thank Sarah for reminding that I hated the rainbow much more than I hate the current government and also for proving the old FF adage that tehya re all at it.
By Christ the Blueshirts give some value.
tom said,
November 28, 2006 at 12:03 pm
“WHAT WAS THE BLOODY POINT IN TAKING 50M OF DIGIFONE AND USING IT TO PAY THEMSELVES TO PAY THE EIRCELL FEE AND JUST MAKE THE ACCOUNTS IN EIRCELL HARDER TO BALANCE”
1) To raise money from third parties
2) To ensure honesty in the bidding process
Sarah said,
November 28, 2006 at 12:13 pm
this is my last comment on this.
The state owned Eircell. The civil servants wanted to protect Eircell. If Eircell had to pay 50m then it would reduce their ability to invest in their own network and compete with Digifone. Eircell didn’t want to pay the money. Therefore the civil servants did want them to pay the money. Therefore they agreed to cap the fee.
Furthermore, why does paying the highest price automatically ensure honesty? Additionally, why does paying the highest price automatically mean that that group could roll out the network most efficiently? There are other considerations apart from price. For example, Digifone’s bid contained the papers which showed that something like 140 masts were in the planning process. The other bidders hadn’t invested in this. So if they got the licence, they would have delivered the network up to a year later than Digifone. At that stage the national network was a mess and a huge priority was to deliver a network not just engage in a revenue collection exercise.
Tom, maybe you just haven’t got a fucking clue?
Honest Ulsterman said,
November 28, 2006 at 12:25 pm
Why would Barry Moloney lie?
Honest Ulsterman said,
November 28, 2006 at 12:28 pm
Why did Denis O’Brien buy a house in Portugal from a friend of his but never take posession of i?. If it was for his parents why dd they never go there?
This is how the money was paid to Lowry.
Honest Ulsterman said,
November 28, 2006 at 12:58 pm
If Mr O’Brien ‘seems to excel in making money out of regulated businesses dependent on the award of licenses’ so what? However a simple auction process is at least transparent and we know the criteria.
Further if the ESAT network was so developed why was the bizarre deal with Nora Owen necessary?
As I say the Blueshirts give some value.
fmk said,
November 28, 2006 at 12:59 pm
tom – the job losses can be quantified. the research and develepoment forgone can be estimated. the missed revenues can be guessed. so while you clearly haven’t got a clue, don’t assume everyone is as ignorant as you.
as i have tried to explain this in previous comments and clearly failed i’ll type in slowly this time int he hope it will get through to you – the 22 billion raised in the uk was recoverable from *all* the oeprations of the phone companies. landlines, mobile, texting, roaming, and – when they finally introduced it – 3g. so everyone using a phone is paying for it. furthermore, the cost was also passed back to the handset manufacturers, meaning the phones themselves would remain expensive.
now you’re right, you don’t have to use a phone. but tell me this – is it right for a governement to, in effect, tax those if its citizens who do use a phone, to tax them to the tune of 22billion? because, at the end of the day, a tax on the phone using citizenry is what it was.
why should you care about 3g take up in the us – why should you care about anything tom? just go back to your little corner and keep saying “i’m alright, sod you” and you’ll be fine.
conor – the question is what is the state’s objective in selling the assets? is it selling the family silver cause grandfather has run up massive gambling debts and so needs to get in the most money it can quickly? or is it trying to ensure that those assets have a beneficial long term contribution to make to the economy? and why sell the assets in the first place, if industry is clearly as evil as so many of the commentors here (yourself, apparently, included) seem to think? why not let the government exploit the mobile spectrum itself, instead of bringing in those dreaded evil corporations with their dreaded evil corporationy ways?
as for sunk costs – it’s a wonderful concept, and try as you will to forget the past, you just can’t ever let it go, and so you have to recoup those costs. someone will always remind you of what your share price was at the height of the boom. and if all of you are as fucked as the other, then none of you has an incentive to lower your costs to the consumer, now do you? meaning you can keep your costs as high as the consumer will bear them for as long as it will take you to recoup your investment.
sarah – you are a silly little thing, now aren’t you? of course auctioning enforeces honesty! sure who’d go to the bother of telling any of the other bidder what the current highest bid was just so as they could lob in a new bid with a couple of quid extra on it? sure that doesn’t happen even in oliver stone movies, let alone the real world, now does it? had the blue shirts had the good sense to do this when they were flogging that 2g licence and o’brien had still managed to make the highest bid, there wouldn’t be a soul out there slagging the man off. the transperency of the process would be enough keep his name clean and shut the bregudgers up.
tom said,
November 28, 2006 at 1:03 pm
“Furthermore, why does paying the highest price automatically ensure honesty? Additionally, why does paying the highest price automatically mean that that group could roll out the network most efficiently?”
Selecting based on the highest price removes a dependence on decisions and judgement calls – which in turn are easily influenced by whatever business or personal relationship those making the judgements have with the various bidders.
A decent analogy is the points system in Ireland. It is tough for the students and it has it’s disadvantages, but it is definitely FAIR. You either get the points or you don’t, and you can’t get into a college because your dad went there or you appear to be “the right sort of chap” in an interview, like you can in the UK.
Selecting on price can also help ensure that the network is rolled out efficiently. If you are being asked to invest serious amounts of money in the license, you would be expected to have a pretty solid business plan. After all – the bidder is assuming the risk. If you are hoping to get the license cheap, on the back of promises and fine words, the Government is taking the risk.
Honest Ulsterman said,
November 28, 2006 at 1:03 pm
Some say that Barry Moloney lied to stop ESAT Telecom being floated that makes no sense.
Why did Michael Lowry have 145,000 in a channel islands account?
Leon said,
November 28, 2006 at 1:15 pm
Given that the Irish Mobile suystem is owned by transnational companies what motivation does the republic of Ireland have to avoid an auction. the cost is borne by ALL Vodafone or O2 customers in Ireland, the UK, Japan, wherever.
fmk the problem isn’t that your point is opaaque it is that you are stupid. You are stupid enough to believe that the company keeps costs as high as the customer will bear ONLY for as long as it takes to recover the investment.
fmk said,
November 28, 2006 at 1:27 pm
leon – the companies keep prices as high as they can for as long as they can. they only lower them when one of them breaks rank. if they’re all trying to recoup a massive investment in the licence, then they are unlikely to break rank. give them an opportunity to break rank sooner, and you might actually see some real price competition. hamstring them for as long as you can and you might as well have a monopoly.
tom said,
November 28, 2006 at 1:42 pm
“the job losses can be quantified. the research and develepoment forgone can be estimated. the missed revenues can be guessed. so while you clearly haven’t got a clue, don’t assume everyone is as ignorant as you.”
can you do that then, or point me to some research that has?
fmk said,
November 28, 2006 at 1:51 pm
is there a point tom? you clearly have your mind stuck in one groove and i feel i’ve wasted more then enough energy on this issue already.
tom said,
November 28, 2006 at 2:07 pm
that’ll be a no then.
Leon said,
November 28, 2006 at 2:07 pm
fmk, you have made a series of assertions which you are unable to stand over:
“tom – the job losses can be quantified. the research and develepoment forgone can be estimated. the missed revenues can be guessed. so while you clearly haven’t got a clue, don’t assume everyone is as ignorant as you.”
Please do so- as compared with the revenues received by the British State from the auction. Or did you make the above up?
gerry said,
November 28, 2006 at 4:29 pm
FMK – I was just looking at some figures – let’s say the average tax take for a person is 10,000 p.a. in the UK (avg industrial wage in 2003 was STG19000 so I am being generous. and let’s take a 4 year time period. To lose in tax revenue the equivalent of 22BN from redundanices in the telecom sector would require 550,000 (22000,000,000/40000) redundancies. I don’t remember it being that bad. It would also assume that none of these people were subsequently rehired in that period.
so I think we can forget the lost income tax revenue argument and move on to the cost to the consumer in charges being inflated over a longer period of time than required or that they would directly have to pay for this STG22BN through increased prices
a glance here:
http://www.ofcom.org.uk/research/cm/cmpdf/telecom_apndx.pdf
shows that none of this is true. The UK is in the lower bracket or lowest cost
to consumer of all types compared with France Germany, Italy or Sweden.
Why is Sweden interesting? Sweden had no auction. So the Swedes pay as much with no revenue boost to the exchequer. From a Barclay’s report on the area (go to page 3) http://www.business.barclays.co.uk/BBB/A/Content/Files/Telecommunications_and_Technology.pdf
“Increased competition, lower costs and the maturing of new technology have resulted in a steady decline in prices” – so again completely contradicts your supposition.
I can’t find anything on decline in R+D spending since 2000 in mobile operators although I am sure it is but how true significant relative to the 22BN?
Essentially FMK you have come to the table with some barmy notions about auctions being a bad thing for reasons you are clearly wrong on but with a gut instinct that a net transfer to a gov is necessarily a bad thing. The money you seem to think is better left with corporations who will do their best to bring out amazing products at incredibly low prices. The only thing you’ve been right on is that tom is stupid, but not for any of the the reasons
you suppose.
fmk said,
November 28, 2006 at 5:42 pm
gerry / leon / tom – if numbers will convince you of anything (which i doubt), i’ll be back with them when i have time to collate them for you. ok?
Leon said,
November 28, 2006 at 5:51 pm
Thank you fmk, I would also like you to consider the relevance of a free rider effect where transnational companies are concerned.
tom said,
November 28, 2006 at 6:24 pm
Exactly Leon.
A smart government takes all the money knowing that any possible negative effects will be felt by everyone and every country.
On the other hand I suppose a truly smart Government minister feathers his nest by deciding to hold a beauty paegant that happens to be won by a man who keeps buying him houses and making party ‘donations’.
Leon said,
November 28, 2006 at 6:39 pm
Aah no Tom we just don’t understand these things can be quantified and fmk will set us straight.
Incidentally Sarah given that Mr O’Brien was appointed to the court of directorsd of the Bank of Ireland it is difficult to see how his reputation has been adversely affected.
I would also say that if the licensing process was problematic and Mr O’Brien influenced it through skillful lobbying surely that rebounds to his credit. If my skill is making money from regulated industries why would I get involved in non regulated industries?
Sarah said,
November 28, 2006 at 6:41 pm
Honestulsterman is an asshole.I’m taking down his comments.
tom said,
November 28, 2006 at 8:31 pm
fmk:
http://www.google.com
enjoy your evening, see you tomorrow.
laura said,
November 29, 2006 at 1:32 am
I’m so in love with ESAT Digifone, that, I still have a brightly coloured umbrellaed ESAT digifone SIM in my mobile. It would be cost effective for me to change price plans, subscription plans, companies even, but that would involve getting an O2 Sim or moving to vodafone (used to be eircell) or meteor (is now the new eircell).
I refuse to move to a company that at any stage had anything to do with eircom. Denis O’Brien is the man who took on Eircom. i don’t care if he bribed Lowry for the licence and got mega rich. He offered an alternative. One, I still can’t give up.
Conor Lenihan said,
November 29, 2006 at 2:15 am
Hey fmk I’ve got a business plan for you
1. purchase sweet shop
2. purchase ferrari
3. raise sweet prices to cover the cost of your ferrari
are you in?
Darren Mac an PhrÃora said,
November 29, 2006 at 2:24 am
Pat Rabbites comments yesterday show that the good souls of FG will never be accepted by the elecorate as coalition partners with Labour under Rabbitte.
Why is FG not a bigger party?
Lorenzo said,
December 1, 2006 at 6:56 pm
A little belatedly I know but I must say I subscribed to the dodgy/lucky/tax avoiding view of DOB but after reading the few articles and particularly the comments here over the past while, I have changed my mind about him, and considerably for the better.
The goings on with Lowery still needs to be more transparently explained however. All the blocking manoeuvers to restrict investigation into some of the transactions make him look like he has something to hide. I can understand why someone would not want further prying into their affairs and I’d imagine a certain level of paranoia may be justified but it is counterproductive.
Obviously, the hair style is still dodgy though.