About six months ago I tried – and failed – to find the time to write an article saying the Left needed to start thinking (and talking) about the ‘B word’. Not Brexit, but broadband.
At the time it was an issue that had barely been discussed, with more attention having been paid to the ownership and operation of platforms like Facebook and Twitter than the infrastructure they’ve been carried over. If anything can be said of the past three weeks, it’s that this balance has started to be redressed.
Labour’s announcement that it would bring parts of BT into public ownership to rollout a national full fibre network within a decade, and to provide free world-class broadband for every home and business funded through a tax on tech giants like Amazon and Facebook, is a policy that has cut-through with many voters.
This wasn’t simply because of its novelty (though there are similarities in the way the news landed to the reception for the leak of the manifesto in 2017), but because for millions of people and small businesses around the country, the price and standard of broadband is a major issue.
Average download speeds in rural areas are half as fast as inner-city areas; four in five people have experienced problems with reliability over the past 12 months; the cost of a full fibre service is likely to be over £700 per year if it’s even available; and 5% of homes still cannot get even headline speeds of 30 megabytes per second. When the UK has full fibre coverage of just 8%, compared to more than 98% in Japan and South Korea, it should be clear why a plan to make the country a world leader within a decade has caught people’s attention.
But for Labour the policy also symbolises a change in approach on the economy. BT was privatised in 1984 and in 1990 was actually forced to abandon a plan to rollout a full fibre network by the Tory government on the basis that it would be ‘anti-competitive.’ Since its privatisation it has paid out some £54bn in dividends (in today’s values) and across the industry workers have seen a steady erosion of job security and private operators have sweated their old assets rather than replaced them.
Despite these problems with the current approach – and despite the remarkable degree of consensus that our infrastructure needs to be replaced as a matter of urgency – the right-wing press have been on the attack. Given that the UK has been at the forefront of the privatisation experiment it’s not a surprise that parts of the media took their cue from Boris Johnson in denouncing Labour as pushing “broadband communism” (though the publicly-owned BBC doing so without a hint of irony is still baffling).
But while being radical (or seen to be) has a great deal of attraction when the government has failed for so long and on so many fronts, the truth about Labour’s broadband policy is far more prosaic. It’s less about communism than it is about common sense.
The idea that infrastructure we depend upon and pay for should ultimately be collectively owned, particularly when according to the government’s own research this means it will be cheaper and quicker to deliver, should not be particularly controversial. And perhaps the only reason it could ever seem to be is because it has been scrutinised in isolation. If you’ve heard that the UK ranks 35th out of 37 OECD countries on fibre broadband or seen a single attempt at meaningful scrutiny of the other parties’ policies, it would be a surprise.
So I want to correct that here and put the spotlight on the Tories’ proposals. In 2018, DCMS’s Future Telecoms Infrastructure Review set out the aim to have full fibre broadband across the country by 2033. This was to be delivered by encouraging a number of different private infrastructure providers to build parallel networks alongside each other and with billions of pounds of public subsidy to get them to build in more rural areas. While this has its problems which we’ll come to, it was at least clear in its ambition to build a network fit for the future.
But this clarity has been counteracted by Boris Johnson. During the Tory leadership election he called this “laughably unambitious” and pledged to deliver nationwide full fibre by 2025, eight years ahead of schedule. At a stroke this turned a laughably unambitious pledge into one that was laughably undeliverable – and when Boris Johnson became Prime Minister, the government quickly set about rowing back from it. There was also a huge lobbying effort over the summer to downgrade the ambition for full fibre from Virgin Media and other operators.
This culminated in the pledge in the Tory manifesto to target not full fibre, but the far slower “gigabit capable” broadband across the country by 2025, which enables Boris Johnson to save face (by still talking about 2025), and Virgin to save billions and keep sweating its existing assets (exactly the sort of thing that has left the UK lagging behind in the first place). Rather than a more ambitious target, this looks like being the second time in thirty years that, at the key moment, an ideology of promoting private competition has trumped the need to build a national fibre network for the future.
But there is plenty of reason to doubt that the Tories would get close to delivering even their watered-down target. They have pledged £5bn in subsidies for private operators to cover the most rural 20% of the country when the figures they published in government suggest this will be billions of pounds short. And with the procurement schedule running into mid 2021, nothing is likely to be built in rural areas for almost two years, so there’s little time for the Tories to wake-up to the need to put additional money forward in order to deliver by 2025.
More problematically though, there is a swathe of the UK that looks like it will be left behind. While Virgin covers built up areas in roughly half of the country and the government will subsidise the most remote 20%, the Tories are simply hoping that private companies – most likely to be BT/Openreach – will focus on the remainder rather than competing against Virgin in the most profitable urban locations. This is not just contrary to logic and the way the industry has worked for the past thirty years, but contradicts the research the Tories themselves commissioned in government about what is likely to happen next.
The other huge question the new target in the Tory manifesto raises is whether there is now any desire at all from the Tories to see a nationwide full fibre network. While there are reasons to believe the watered-down target in the manifesto actually undermines the possibility of full fibre being delivered, the Tories would probably argue that alongside the subsidy for the most rural 20% the market will eventually rollout full fibre with competing infrastructure providers as envisaged by DCMS originally.
Assuming this is correct, there are two major problems. Firstly, the research the Tories commissioned in government shows that their approach of having several infrastructure providers would cost some £12bn more in upfront costs than Labour’s approach of just having one provider because of ‘overbuild’. In short, consumers would end up paying to cover the whole country in full fibre and then to cover tens of millions of addresses two or three times over in the most profitable areas. Yet it’s private sector competition that is supposed to be more efficient.
Secondly, the government’s approach means giving huge power to private companies. Not only will they own and control infrastructure that is essential for communications, the economy and national security, they will have huge shares of the market to make their money. For some 50% of the country the government thinks there will be just two providers; for 20% there will be just one. Not even the most ardent of advocates for private markets will believe this is meaningful competition that will deliver for customers.
But the level of power being put into private hands doesn’t stop there. In order to “stimulate demand” for privately owned fibre networks, your existing copper phone/broadband connection will be switched off and you’ll be forced to pay for fibre if you want a fixed telephone or broadband line at home. This isn’t speculation about what could happen – the documents from DCMS are explicit about doing this in order to guarantee private companies a return on investment.
These two points are extremely important when we consider the Tories’ alternative to Labour’s proposals. While some people have asked of Labour ‘why should we use tax to pay for a service that I am willing to buy anyway?’, there are two clear responses. Firstly, that Labour’s plan is to introduce a new tax so it’s the tech giants like Facebook and Amazon that benefit from the infrastructure that pay towards it. And secondly, that the alternative being put forward by the Tories means you will be forced to pay for it anyway, only several times over, while providing billions of pounds in subsidies, without ever getting ownership of it.
Seen in this light, it’s not Labour but the Tories that appear to be taking us in an extreme, ideologically-driven direction. It’s a policy that appears to be based on Boris Johnson saving face after making an undeliverable pledge and after lobbying from large multinationals, which results in huge subsidies and huge power being given to the private sector, at a significantly higher cost than would be necessary with one public body. If the alternative to this is going to be called “broadband communism,” that’s fine with me. But to many people, struggling with inadequate internet across the country, Labour’s approach will simply seem far more like common sense.