Blog: The problems of unhealthy competition

For years I have been mulling over the issues associated with nationalised companies being sold off and going into public hands - but with none of the publicly-generated income being removed.

The same goes for those organisations which use a dominant position (read monopoly) to dive into other areas and stifle competition.

Two big names spring to mind: BT and Sky.

BT has for years been living on the fact that it has historical, and not inconsequential, revenues from me and you, either directly or indirectly. The line rental you pay goes directly to BT. Nice business if you can get it.

It’s not particularly this that I have a major issue with, although being Yorkshire born and bred, I don’t think this is exactly value for money for the consumer. No, what I take issue with is when a huge organisation, such as BT, then uses their position to compete in markets they were never supposed to enter, and even worse, uses my money to compete against...me!

BT is competing in a number of different areas against small businesses and individuals who directly fund them to do so because of the monopoly position they have.

Take BT Vision. Is this not publicly funded broadcasting - but in disguise? Do we not pay the BBC through our licence fees to provide us with a national broadcast network? Is it fair that BT, funded by me and you, uses this to then compete against the BBC et al?

From BT Vision to Dabs to a whole host of other markets, there are organisations that use their dominant position to compete in otherwise ‘open’ markets.

If BT want or need to do this then I suggest they remove the comfort blanket of the ‘line rental’ revenue and go fly free in the open markets as everyone else has to.

Then we have Sky, which took on a part-funded company BSKYB and turned it into a monopoly for satellite TV. They have been allowed to buy their market through sports coverage and now are offering broadband and telephony if you subscribe.

Okay, again no problem with healthy competition, but I do think that allowing organisations as big as NewsCorp to continually diversify, we run the risk of there only ever being two or three big companies in each sector.

There are small organisations throughout the UK trying to survive against a wave of corporate expansion and diversification. And, unfortunately, it’s becoming increasingly difficult to promote creativity and innovation.

Paul Hague is chief executive of BiBC, a video download distribution company.

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