Labour’s policy on part-nationalising BT (its infrastructure arm Openreach, and a few other sections) has pushed a long-held union policy written by the left in the Communication Workers Union into the limelight.
The union has in fact been pushing for the full renationalisation of BT. Even though there could have been much more of a genuine collaboration by Labour with the union, and the detail published so far does not go far enough, this policy is both radical and interesting.
All over the world governments are pushing for the replacement of copper wiring in “The Last Mile” of phone/broadband networks with fibre optic cables. The Tories have promised £5 billion government investment to help with this. Labour’s policy promises £20 billion, and the new nationalised company as the main vehicle for getting there.
The promise of free broadband is underpinned by the idea that a communication network should be just like a road network, something that everyone can access and use. Swapping fibre for copper is analogous to replacing a country lane with a motorway.
A fixed broadband network is the infrastructure of infrastructures these days. It seems likely that a fully fibre network will be needed to underpin the 5G mobile broadband (although how 5G will combine with fibre broadband and improved WiFi is not yet clear). A bigger and more urgent question might be whether and how it could underpin greener energy use.
Unsurprisingly the promise has sent the bosses of BT and other telecoms companies into a spin.
Leaving aside the scare stories, there are gaps and questions. The entire project of introducing fibre to the UK will cost much more than £20 billion (current guesstimates are £30-40 billion). It may be that Labour envisages Virgin will be other main infrastructure company filling in the gaps. But what will Labour do to ensure Virgin plays ball and collaborates on building a comprehensive network that will be free at the point of use? And what will Labour do about Virgin’s hostility to the union?
Openreach and BT are unlike Virgin because of their roots in a state-owned post and telephone operation, once the model for delivering communications in all countries around the world. They retain a fully comprehensive communications network in the UK and are best placed to do the complex renovation work.
Market mechanisms will not “take care” of this project. For some years it has made more “business sense” for BT and Virgin to “sweat” their copper networks, to introduce bolt-on technologies that make that technology perform better, while building modest amounts of “fibre to the home” in some areas, for example, in new-build housing projects.
In the last few years new small telecom companies and existing specialised one (such as City Fibre) have been rewiring parts of the UK, some cities and towns and, paradoxically, some rural areas. All of this activity is about “cherry picking” geographical areas and markets where it is easy to build and where profits can be quickly made.
Consequently there is already some “overbuild” in urban areas (multiple providers operating in the same area), and “underbuild” elsewhere. This is inefficient and wasteful.
Once a fibre network has been built, one provider’s fibre is as good as another. There are no substantial extra costs involved in an internet provider delivering 100MBps download speeds over 30MBps. Competition between providers on speed is phoney.
Yes, a Labour government should organise a single institutional effort to rewire the UK and provide free internet access.
Labour’s policy should be welcomed and discussed throughout the labour movement.
• For background see the CWU Greater London Combined branch pamphlet