February 4 2010


Premises, premises


Old Grumpy notices that his Notice of Motion calling for the Western Telegraph's charging regime for county council public notices to be referred to the Competition Commission is set to be kicked into touch by next Monday's meeting of Cabinet.
For the record the WT charges £11.30 per column centimetre for pubic notices but only £7.50 for other categories of advertising such as property.
In a recent report to council on a related NoM submitted by Cllr Tony Wilcox it was stated that the WT "is the only newspaper circulating in the area" and that "Newspaper proprietors are aware that local authorities have a statutory duty to publish public notices in relation to a range of their activities"
The council's explanation for this 50% premium on public notices is that "the law of supply and demand applies", though, as I said previously (Jan 14), you don't need a degree in economics to understand that this is a classic example of monopoly pricing .
Recommending that my NoM be rejected, head of marketing and communications David Thomas asserts that: "The Notice of Motion currently before Cabinet is based on a false premise.While it is correct to say that the Western Telegraph is the only newspaper which serves the whole County, this does not mean that it operates a monopoly. Four weekly newspapers are based within Pembrokeshire and two others are based outside the county but circulate within all or part of the County."
I'm afraid it is the council's £80,000-a-year head of marketing who is in the false premise business when he implies that the presence of three other newspapers in the county means the WT cannot be operating a monopoly.
For the purposes of competition law "monopoly" is a term of art.
It certainly doesn't mean that a firm is the only game in town, but that it has a dominant market position - usually defined as over 45% of the market.
Indeed, Tesco, with just over 30% of the grocery market, is considered to hold just such a dominant position.
And, as Mr Thomas says in his report, "At over 22,000 copies per week, the Western Telegraph’s audited circulation is significantly greater than all of the other weekly newspapers within Pembrokeshire combined."
Even that is misleading because, according to this week's paper, the WT's Audit Bureau Circulation (ABC) is 24,800 - some 12% more than the quoted figure.
However, mustn't nitpick - the fact is that, even on Mr Thomas' figures, the paper's circulation is well in excess of the definition of dominant market share which governs these matters.
Mr Thomas also claims that : "It would be feasible to publish Public Notices in each of these smaller newspapers [Milford Mercury, Tenby Observer, County Echo (Fishguard) ] instead of the Western Telegraph. However, the combined cost would be £21 per single column centimetre, compared with the Western Telegraph’s £11.30 per single column centimetre."
That would give an average rate of £7.00 per cc for the three smaller papers.
In any case, this is a straw man because I have never advocated that public notices should be published in all the newspapers.
Clearly, great savings could be made if public notices affecting the Tenby area were published only in the Tenby Observer.
Ditto Fishguard and Milford Haven.
And, of course, even greater savings would flow if the WT charged the same for public notices as it does for property ads.
In addition, the Western Telegraph and Milford Mercury are both owned by Newsquest Ltd.which gives the company in an even more dominant share of the newspaper market in Pembrokeshire.
The head of marketing says: "It is, of course, the case that the Milford Mercury is also owned by Newsquest, owners of the Western Telegraph. If the Competition Commission had concerns about a potential monopoly in local newspapers in Pembrokeshire, it is likely it would have investigated the matter at the time of the sale of the Milford Mercury to Newscom (the then owners of the Western Telegraph), which was subsequently acquired by Newsquest.
Another false premise, I'm afraid, because the reason Newscom's acquisition of the Mercury was not investigated by the Competition Commission. was that the combined sales of the two organisations fell below the 500,000 copies per week threshold that would have triggered an inquiry under the rules that then existed.
In any case, it is not market share that is the real issue but whether a dominant market position leads to market abuse.
I would argue that the 50% premium on public notices compared to other advertising rates is just such an abuse and if, as seems likely, my NoM is rejected I will be happy to argue the case before the Commission myself.
As things stand, I will be unable to make these points to the Cabinet though I could at a push ask my Cabinet mentor Cllr Jamie Adams to make my case for me.
It might have been different had not the Independent Political Group used its block vote to reject a NoM from Cllr Bob Kilmister (see Groupies) that would have allowed members to address cabinet directly in such circumstances.
Sadly, that's what passes for democracy in the Kremlin on Cleddau.




A lively debate ensued after a lady emailed the Today programme to say she had bought a half-dozen box of eggs that were all double-yolked.
Sarah Montague said that one in a thousand eggs is double yolked and the chances of finding six in the same box is 1000000000000000000 to one.
Mr Humphreys disagreed.
He claimed that the odds on the sixth egg being double-yolked was 1000:1 and seemed to be vindicated when emails poured in from people who had also experienced this multi-billion to one event.
However Ms Montague's statistical analyses was impeccable - provided the odds are 1000:1 and the eggs are chosen at random.
But what the listeners' emails indicated was that double-yolked eggs do not occur at random and are not randomly packed.
Young pullets lay a disproportionate number of double-yolkers and, according to one correspondent, doubles are kept separate from the other eggs at the packing station so the probability of six ending up in the same box is much greater than that predicted by pure mathematics.
What Mr Humphreys was alluding to is that if you throw five heads in a row the odds are still 50:50 on the coin coming down heads on the sixth throw.
However, that doesn't alter the fact that the odds against throwing six heads in a row is 64 to 1 or, more correctly 1/64 (1/2 x 1/2 x1/2 x 1/2 x1/2 x 1/2) because, outside of betting shops, probabilities are always expressed as fractions; certainty being 1.
So the probability of a coin landing heads is 1/2 and the probability of it landing tails is 1/2.
Add the two probabilities together and you get 1. i.e. discounting the possibility that it might land on edge, it is certain that it will be either heads or tails.
Indeed, the probability of throwing any six-member series (HTHTTH for instance) is 1/64 because there are 64 possible ways that a coin spun six times can fall.
Dice, or should that be die, having six faces, are even more interesting.
The chances of throwing a six is therefore 1/6.
The probability of throwing two sixes in a row is 1/6 x 1/6 = 1/36 which is exactly the same as the odds of throwing a six followed by a three.

Beware of Greeks . . .


As I observed just before Christmas, the financial crisis is revealing. the flaws in the Euro's one-size-fits-all interest rate policy with the world financial markets turning up the heat on the so-called PIGS (Portugal, Ireland, Greece and Spain). (EMU takes flight).
The prospect of sovereign default by one or more of the southern European nations - Ireland, which was quick off the mark with a credible austerity programme, is relatively safe - is now the front page story in the business sections of all the newspapers.
The UK is insulated from all this because having its own currency allows it to set interest rates and, indirectly, the exchange rate.
However, our recovery is feeble at best and the backwash from an EMU crisis could have very severe effects on our future economic prospects.
After all, the EU is our biggest trading partner and British banks have a high exposure to continental debt.
Hang on to your hats - it could be a bumpy ride.

Bring it on

WS has come good with an offer to bet two bottles of merlot on Saturday's game.
He also complains about a newspaper article by Will Greenwood in which the former England centre says that Wales have no chance at Twickers.
WS says that Will (and me) have allowed our white jerseys to fall across our eyes.
In contrast to the traditional Welsh objectivity in matters concerning the great game, I suppose.
And, as I suspect WS well knows, it is the partisanship, especially when Wales and England lock horns, that makes the Six Nations such a special competition.
And the great sadness is that, barring a draw, one of us will have to watch our team lose and suffer the further indignity of hearing it described by Eddie Butler and Brian Moore.

Maclaren thou shouldst be living at this hour,
Rugby hath need of thee.

With apologies to my fellow Cumbrian Willie Wordsworth.

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