Labour sets out plans for a new ‘British Broadband public service’ - free full-fibre broadband for all

Profile picture for user ddpreez By Derek du Preez November 15, 2019
Summary:
The opposition party proposes that it would bring parts of BT under public ownership and tax tech giants to foot the bill.

Image of fibre cables

If Labour wins power in the 12th December vote, it plans to take parts of BT under public ownership and provide free full-fibre broadband for all. A new British Broadband public service will begin with communities that have the worst broadband access, including rural and remote communities, as well as some inner city areas. 

The plan, as revealed by Labour leader Jeremy Corbyn, will be paid for through the party’s proposed Green Transformation fund and via taxes on multinational corporations, such as Amazon, Facebook and Google. 

A ‘digital tax’ has been proposed by the current Conservative government too, and is part of a wider international debate, given that multinational technology companies often take advantage of tax systems that mean they pay relatively lower taxes ‘in-country’ compared to their revenues and profits. 

Some proposals have included taxing companies based on ‘user participation’ of their services in-country, rather than profits. However, it is generally thought that international cooperation around an effective tax plan is needed, rather than individual states attempting it on their own. 

In a speech in Lancaster today, Corbyn is set to say: 

A new public service delivering the fastest broadband free to everyone is at the heart of Labour’s plans to transform the future of our economy and society.

The internet has become such a central part of our lives. It opens up opportunities for work, creativity, entertainment and friendship. What was once a luxury is now an essential utility.

That’s why full-fibre broadband must be a public service, bringing communities together, with equal access, in an inclusive and connected society.

It’s time to make the very fastest full-fibre broadband free to everybody, in every home in every corner of our country. Making it free and available to all will open up opportunities for everybody, at the cutting edge of social and economic change.

By creating British Broadband as a public service, we will lead the world in using public investment to transform our country, reduce people’s monthly bills, boost our economy and improve people’s quality of life.

The plans

Labour states that only 8-10 per cent of premises in the UK are connected via full-fibre broadband, compared to 97 per cent in Japan and 98 per cent in South Korea. It cites research by the Centre for Economics and Business Research that a full-fibre broadband network could boost productivity by £59 billion by 2025; bring half a million people back into the workforce; and boost rural economies, with an estimated 270,000 people more able to move to rural areas. 

The Party also claims that the plans could result in 300 million fewer commuting trips, three billion fewer kilometres travelled by car, and 360,000 tonnes fewer carbon dioxide emissions. 

In terms of specifics, Labour is proposing the following: 

  • Free full-fibre broadband to all individuals and businesses by 2030. It will integrate broadband-relevant parts of BT into a new public entity, British Broadband, and delivery free full-fibre broadband to at least 15-18 million premises within five years. 

  • It’s mission will be to roll-out the remaining 90-92% full-fibre across the country, as well as acquiring the necessary access rights to the existing 8-10% of full-fibre assets. 

  • The government will own the network that is rolled out and will deliver free full-fibre broadband as the network is completed. 

  • British Broadband will have two arms - British Digital Infrastructure (BDI), which will roll-out the public network, and the British Broadband Service (BBS), which will deliver free broadband. 

  • The parts of BT that will be brought into public ownership include: Openreach, parts of BT Technology, BT Enterprise, and BT consumer. EE, Plusnet, BT Global Services, BT TV and non-broadband-relevant parts of BT will not be brought into public ownership. 

  • All current workers in broadband infrastructure and broadband retail services will be guaranteed jobs in the new public entity. 

In terms of costing, Labour has said: 

  • There is a one-off capital cost to roll-out the full-fibre network of £15.3 billion (in addition to the government’s existing and not-yet-spent £5 billion commitment). 

  • The cost of bringing parts of BT into public ownership will be set by Parliament and paid for by swapping bonds for shares. 

  • Labour estimates the maintenance costs of the fibre network would be approximately £230 million a year, which will be covered by the taxation of multinationals, based on their share of global profits that reflects their UK share of global sales, employment and assets.

John McDonnell, Labour’s Shadow Chancellor, will say:

 This is public ownership for the future. A plan that will challenge rip-off ‘out-of-contract’ pricing – and that will literally eliminate bills for millions of people across the UK.

Every part of this plan has been legally vetted, checked with experts, and costed. What we are offering in this election is real change.

And what we’ve announced today is what real change looks and feels like.

The response

The Conservative Party has labelled Labour’s broadband plans a “fantasy” and said that they are “simply another thing they wouldn’t be able to deliver”. 

The Party’s website cites a long list of reasons why it believes Labour’s plans are ill thought through, including poor costing and the potential impact on pensions and savings, as well as lengthy legal battles. You can read the full list here

Nicky Morgan, Secretary of State for Digital, Culture, Media and Sport said: 

Jeremy Corbyn’s fantasy plan to effectively nationalise broadband would cost hardworking taxpayers tens of billions.

Corbyn is clearly so desperate to distract from his Party’s divisions on Brexit and immigration that he will promise anything, regardless of the cost to taxpayers and whether it can actually be delivered. What reckless idea will be next?

Only a vote for Boris Johnson and the Conservatives will get Brexit done, keep our economy strong and deliver on the issues that make a difference in voters' lives - investing in our NHS with 40 new hospitals, cutting crime with 20,000 more police, introducing an Australian style points based immigration system, and giving businesses and families the economic certainty they need to plan for the future with confidence.

The plans also faced opposition from techUK, an industry body for UK tech business, which claims that the proposals are a “disaster”. CEO Julian David said: 

These proposals would be a disaster for the telecoms sector and the customers that it serves. Renationalisation would immediately halt the investment being driven not just by BT but the growing number of new and innovative companies that compete with BT. Full Fibre and 5G are the underpinning technologies of our future digital economy and society. The majority of the estimated £30bn cost for Full Fibre is being borne by the private sector. Renationalisation would put this cost back onto the taxpayer, no doubt after years of legal wrangling, wasting precious time when we can least afford it.  These proposals would be a huge set back for the UK's digital economy which is a huge driver for growth. 

The telecoms sector has delivered increased coverage, capacity and quality whilst household spend on telecoms services has remained flat. Put simply, it is delivering for consumers and UK PLC. Labour’s plans are fundamentally misguided and need to be dramatically altered if they are to deliver the infrastructure we all need.

My take

This is an incredibly complex issue, one that will need to be investigated by researchers and people more knowledgeable of fibre deployments than I am. That being said, I think there are a couple of interesting points to note: 

  • As was highlighted dto me on Twitter, it’s not necessarily the nationalisation plans that are unusual (there are a number of countries that do this), it’s the ‘free’ bit that’s particularly bold. Making internet a public service is quite novel thinking. What’s the impact of that? 

  • There’s a general feeling - which is supported by evidence - that private fibre networks haven’t exactly delivered benefits for all and that the UK isn’t as competitive (on an international stage) as it likes to think it is. Rural and less well off communities in particular haven’t received the same benefits as those living in city centres. 

For any of this to become a reality, Jeremy Corbyn needs to enter Number 10 Downing Street in the days after the December vote. We are still a long way off from knowing whether or not that’s feasible. However, it can’t be denied that this is a policy that few saw coming and it’s interesting to see digital connectivity forming a central part of a political party’s drive to win power. 

It’s also worth pointing out that alongside the broadband plans, Labour is also proposing a new Charter of Digital Rights - which it claims is the “strongest protection of data and online rights ever enacted”. This could include: 

  • Powers for individuals and collectives to challenge algorithmic injustice

  • Powers for individuals and collectives to prevent the use of digital infrastructure for surveillance 

  • Rights for individuals to protect access to and ownership of their data

Image credit - Image sourced via Pixabay

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