Everyone Hates the Phone Company: The Purpose of the Office for Students

So what about that Office for Students and the twat, then? I promised Paul Bernal off the twitter a blog post, and here it is.

The commissioner for public appointments’s report on the whole mess is out and it turns out it was a mess (The Guardian report here). Among other things, nameless “No.10 googlers” repeatedly intervened in the process to complain about this or that candidate’s blog while they didn’t manage to notice any of the 40,000 tweets Toby Young deleted, or indeed the bulk of his lifelong collected journalism. Also, the government seems to have banned anyone from consideration as a student representative if they were associated with a student union in any way.

I think the second of these points is vastly more important. The first is yet another anecdote of Tory decadence. The second is an important insight into the real role of the OfS. But to get you there, we will have to start with the history of telecoms regulation, a subject dear to everyone’s heart but especially to mine.

Back in 1913, the US Department of Justice’s Anti-Trust Division, Theodore Roosevelt’s trust busters, had just broken up Standard Oil as an intolerable monopoly. What would they do about America’s near-monopoly of the phone, AT&T’s Bell System? Nobody knew but the safe assumption was that it wouldn’t be anything nice. So, AT&T Vice-President Nathan Kingsbury decided to offer them a deal. AT&T would obey certain conditions in exchange for being left alone, the celebrated Kingsbury Commitment. This required it to offer interconnection on regulated terms to the remaining independent operators, sell the Western Union business, and give the Interstate Commerce Commission a veto over further mergers.

The Kingsbury commitment is, in a sense, the ideal type of economic regulation. Although it certainly constrained AT&T’s behaviour, it also implicitly legitimised it. When you regulate a monopoly, rather than breaking it up or nationalising it, you recognise it. Also, you implicitly recognise any misbehaviour that falls outside the exact terms of the regulation unless the regulator has a lot of discretion. This distinguishes Kingsbury from, say, the later Communications Act of 1934 establishing the FCC.

Establishing the OfS as a “regulator” places it legally and operationally in the Kingsbury lineage, and more directly in that of Ofcom, Ofgem, and the rest. With the introduction of top-up fees, universities have been granted the right by government to charge the public a high and uniform price for a merit good. At the same time, taxpayer funding for teaching has been dramatically reduced, so that their revenue comes basically from the customer. This does look a bit like a privatised utility industry with a cartel market structure.

Circling back to Kingsbury, the purpose of the regulator is what it does – to recognise the existence of the cartel so long as it doesn’t take the piss. Specifically, the Office for Students is there to defend tuition fees by stepping in when someone doesn’t get value for money, somehow defined. As I understand it, though, it absolutely will not be able to, say, lower the fees, mess with the Student Loans Company, object to the vice-chancellors’ Lucullan emoluments, cap their pharaonic construction ambitions, or bother anyone who matters.

It’s important to note something else here. The exclusion of anyone who was a student union officer is a tell. As with Ofgem, the model of interaction is meant to be a customer-service one. Individual students with complaints go to the regulator, which dispenses case by case fixes. Anyone protesting collectively or wanting change to the wider system is blown off by reference to the regulator, who will refuse to accept their complaint on the correct grounds that it is outside their terms of reference. The purpose of the system is what it does. The purpose of the OfS is to keep the Dearing/Blair/Cameron/Clegg settlement of the university in place for good and all.

“Doc, do you have any idea how much your phone company spends on maintenance?” “I believe…I’ve never given it any thought.” “I guess most people don’t…”

The good news, I think, is that the effort to add an extra culture war mission to this seems to have destroyed any credibility the OfS might have in its main aim.

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