'Copy BT model' for privatisation

Telecoms monopoly break-up offers lessons for higher education, says college. John Morgan writes

November 1, 2012


Credit: GettyFamiliar ring? BT is cited as an example for private education providers

The privatisation of the UK telecoms industry “provides a useful model for the growth of higher education” in showing that monopolies can be broken to benefit consumers, the government was told by a private college aiming for degree-awarding powers.

London School of Business and Finance - which has denied rumours that it is seeking to buy London Metropolitan University - made the comments in its response to the consultation on last year’s higher education White Paper.

Consultation responses were obtained by Times Higher Education from the government under the Freedom of Information Act.

LSBF, a non-profit institution that is part of a group with for-profit interests, also said it hopes to become the latest private provider to gain degree-awarding powers.

So far, only six private institutions have gained the coveted status, which means they can offer degrees independently of universities.

In its consultation response, LSBF, owned by Aaron and Arye Etingen, offers a challenge to universities. “In the telecoms world, the UK moved from having a monopoly provider, to the introduction of third parties accessing a dominant party network, then to a competitive, customer-focused environment encouraging investment, innovation, product development, and collaborative working that provides customers with effective choice. The telecoms industry therefore provides a useful model for the growth of the higher education sector.”

After privatisation, BT is still “a leading blue-chip organisation” and has “changed the way it operates, innovated, and worked collaboratively with competitors…Existing higher education providers should take heart,” the school says.

It adds: “In constructing a new regulatory scheme for higher education, we should keep in mind the principles that guided the changes to the telecoms industry in the 1980s.”

Among these were the need to “protect against monopoly position”, to “promote competition” and “maximise flotation proceeds from the wave of privatisations”, says LSBF, which has a joint venture agreement with London Met.

The school says the Higher Education Funding Council for England must become “an effective regulator of a modern (ie, 4G in telecoms terms) industry”, which means being “unencumbered by previous responsibilities and ways of working”.

The response states that LSBF “is interested in the government’s plans for reform of the process for obtaining degree-awarding powers, as we intend to pursue such powers for our organisation”.


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