The decision for the practice got lost within the bureaucracy of the Information and Communication Technologies Authority (ICTA) and the Ministry of Finance.

Have you ever checked the cost of Internet in Turkey and compared it with that in other countries? Please do so. You will see that cost of Internet in Turkey is higher. In Turkey average cost of internet use per second, is almost ten times of that in Korea. Millions log into Facebook despite this. Why is that? And what is the lesson to be extracted from this story with respect to the privatization of electricity authorities? If you want to know the answer, please join me down.

In Turkey, you need to use fixed-line telephones to use the Internet. And the fixed-line telephones are administered by a single firm, Turkish Telecom (TT). Though it is legal for enterprises which are to enter the market in the context of infrastructure management to build alternative infrastructures, in economic terms the duplication of TT's infrastructure does not seem possible in the short and the medium term. Since the TT has installed the lines and naturally, whenever an operation to be run vie telephone lines comes to agenda, problems as to what to charge appears. In fact this was not always necessary.  Cable TV infrastructure could also have been used as a service provision platform for the Internet. In other words, we could have connected to the Internet via a cable TV. And in fact, this was possible earlier. This way we could have enjoyed two different fixed-line systems which would compete with each other. We could have, but we do not. After the audio infrastructure was sold, the cable TV infrastructure still run by the state could not be operated efficiently and legal obstacles to the operation of the system could not be solved. In fact, cable TV infrastructure was not privatized not because the government was not willing to but because the Competition Authority asked so.

Now, let's get to the point. Assume that you want to purchase Internet connection. Then, you are not among the 60% of the population that does not use the Internet as available data reveals. Anyway, what are you going to do? You will visit a service provider and check the prices. In the meanwhile, you had to subscribe for a fixed-line phone via Turkish Telecom. This was the case until yesterday. Though illogical, this was the case. If you already had a fixed-line connection, you could connect to the Internet through that line. But if you said that you did want to subscribe to a fixed-line phone considering your mobile sufficient, they did not allow this and sold you the fixed line telephone subscription anyway. This is like a joke. Is not it? Anyway.

The Competition Authority decided to abolish this practice one and a half years ago. However the decision for the practice got lost within the bureaucracy of the Information and Communication Technologies Authority (ICTA) and the Ministry of Finance. For one and a half year, ICTA and the Ministry of Finance have been trying to decide the procedure following the abolishment of fixed-line subscription requirement and the taxation procedure to pursue. But there is not need to rediscover America. Such practices can be observed in the West. I guess they are too busy to care!

But, how did we come to this point? At the outset of everything lied a privatization design. Turkish Telecom was a state monopoly over the twentieth century. Those attempting to privatize the company tended to assign extensive authorities and permits to the company. You can get prepared to privatizing a certain company in two different ways. In the first, you seek to reach a competitive market after the privatization, with an effort to reduce costs and increase public utility. In the second, you can seek a vertically integrated enterprise which carries out more than one functions, a monopoly in various sectors so that you can maximize both the privatization revenue and the potential profits of the buyer. This way, you can spare revenues that can be allocated for selected activities. We, in Turkey, have chosen the second option. We made a mistake the cost of which is still being paid.

So the lesson learned from the privation in the telecommunication sector must be kept in mind during the course of the privatizations in the electricity sector.

Attention: The second option damages the public's budgets as well as the growth performance.

This commentary was published in Radikal daily on 05.11.2010