Why countries shouldn’t own businesses

Radio NZ reports:

On a remote island in central Tonga, Glen Duncan needs the internet.

His resort in the Pacific Island nation’s Ha’apai islands couldn’t survive without a way to communicate with guests and monitor natural disaster warnings online.

And after one of Tonga’s undersea cables was broken late last month – possibly by an earthquake – it is Elon Musk’s Starlink internet keeping him connected.

It’s not the first time he’s relied on the service, after a volcanic eruption and tsunami cut off Tonga’s internet in 2022.

“Without Starlink, our business would have already failed,” Duncan said.

“We would have gone through many safety issues. It would be impossible for us to operate, absolutely impossible.”

So what is the problem?

But last week, the Tongan government moved to shut it down.

Starlink, which has been trying to gain a licence to operate permanently in Tonga, emailed customers to say the nation’s communications ministry had told it to disable services.

Why would a Government deprive its citizens of a vital service?

Some internet users criticise what they see as the government’s reluctance to allow Starlink in Tonga, arguing it is trying to protect its own state-owned telecommunications companies. …

And some regulators in Pacific Island countries warn Starlink users their equipment will be confiscated at the border if they attempt to bring it in.

The Governments own the local telco, and they prioritise protecting their revenue stream over allowing their residents to decide for themselves who provides the best service for the best price.

This is another good reason why Governments should not own businesses, except possibly when they are natural monopolies (and even then better to regulate them than own them).