Nor can the auction be regarded as a success in the wider public interest, as implied by Mr Vickers.The 3G auctions were in fact little more than a giant con trick perpetrated by governments on the wider population. When The Independent predicted that proceeds from the auction might reach £5bn we were criticised by some analysts for exaggeration. What the City had not generally appreciated is how cleverly the auction's ground rules had been devised, using, as Mr Vickers points out, the theory of games with asymmetric information, so as to maximise proceeds to HMG. Because no incumbent could afford not to have a 3G licence, they all had to pay whatever it took and ended up, in effect, bidding against themselves to get one.Well done the Government, perhaps, but the government is not the same thing as the public interest.

The auctions resulted in a massive transfer of money from the private to the public sector and by so doing set back prospects for 3G services by years. Once they'd paid for their licences, the mobile operators found they didn't have anything left to invest in the networks Europe now lags in a technology where it once led the world. The mobile auctions came to mark the top of the telecoms bubble, and its greatest act of profligacy.The alternative would have been a beauty parade. Ministers took the view that it was irresponsible to give away such a potentially valuable public property. It would have amounted to a gift which could be sold on in the aftermarket for a fortune by those lucky enough to win the parade.

Unfortunately, the effect of making the private sector overpay has been to render the spectrum worthless to all. The moral is that competition economics is fine in theory, but when applied by Governments to their own ends it becomes little short of disastrous.The Royal Mail Allan Leighton used to be one of the most talented chief executives in the land, but joining the Royal Mail seems to have turned his head. "Regulatory gobbledegook", he thundered over the regulator's entirely reasonable attempt to bring Mr Leighton's miscreant organisation to heel. There was honey in the headlines but a sting in the detail, he went on, warming to his own hyperbole.

Had he described the measures as "the biggest smash and grab raid in history", as British Gas once famously did in similar circumstances, he could scarcely have been more over the top.It can't be much fun attempting to manage all those grumpy posties, but Mr Leighton shows worrying signs of having already gone native. All the history of utility price regulation demonstrates that despite the howls of protest that greet every review, the regulator has invariably hugely underestimated the organisation's scope for cost cutting and efficiency gain. The Post Office has never been subjected to proper competition. It is a bloated, badly managed organisation and a last bastion of unjustified union militancy in a fast changing world. It deserves and needs the kicking it is getting.There is one key difference between the Royal Mail and other price regulated utilities. The Post Office is still in the public sector, which means that if Mr Leighton is right, and yesterday's measures leave the company £500m a year worse off, it is the taxpayer who will pick up the tab.