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Industry questions viability of Labour plan to offer free full-fibre broadband to all UK homes

Uproar in tech sector as Labour proposes to part-nationalise BT and offer free full-fibre broadband to all individuals and businesses by 2030 if successful in General Election

The UK’s fibre communications industry has been propelled to national prominence by the Labour Party’s 2020 General Election plan to part-nationalise incumbent telco BT and offer free full-fibre broadband to all individuals and businesses by 2030.

Labour said that if successful in the General Election, it will bring into public ownership what it calls the “broadband-relevant” parts of BT. That is network provider Openreach, backhaul network division BT Technology, business broadband retailer BT Enterprise and BT Consumer. It has confirmed that mobile subsidiary EE, Plusnet, BT Global Services, BT TV and non-broadband-relevant parts of BT will not be brought into public ownership.

This would be part of the “public mission” to offer full-fibre access to the 90-92% of the country that currently doesn’t have access to such networks, and Labour would also acquire the necessary access rights to the existing 8-10% of full-fibre assets in the UK.

The new plan would see the aforementioned broadband-relevant parts of BT integrated into a new public entity to be known as British Broadband. The new body would have two arms: British Digital Infrastructure (BDI), which would roll out the public network, and the British Broadband Service (BBS), which would deliver free broadband.

As part of the strategy, British Broadband would aim to deliver free full-fibre broadband to at least 15-18 million premises within five years. The government would own the network, and would deliver free full-fibre broadband as it’s completed, starting with communities with the worst broadband access, including rural and remote communities and some inner-city areas, followed by towns and smaller centres, followed by areas that are currently well-served by superfast or ultrafast broadband.

All current workers in broadband infrastructure and broadband retail services would be guaranteed jobs in the new public entity, and also guaranteed the same or better terms and conditions.

The upshot would be “an extraordinary platform” for businesses who, Labour said, would subsequently face lower input costs and offer a whole host of green benefits.

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The roll-out will begin with communities that have the worst broadband access, including rural and remote communities and some inner-city areas, followed by towns and smaller centres, and then by areas that are currently well-served by superfast or ultrafast broadband.

Looking at costings, Labour calculates that there would be a one-off capital cost to roll-out the full-fibre network of £15.3bn, in addition to the current government’s existing and not-yet-spent £5bn commitment to full-fibre, which would be paid for from the Green Transformation Fund and through taxing multinational corporations such as Amazon, Facebook and Google.

Labour estimates that maintenance costs for the network once rolled out would be around £230m a year.

In its first official statement on the proposal, BT agreed that it should be a top political priority to ramp up the roll-out of full-fibre broadband and 5G across the UK, but questioned the idea of a single entity capable of making what Labour has proposed possible.

A BT spokesperson said: “Whatever the result of the election, we’d encourage the next government to work with all parts of the industry to achieve that. It’s a national mission that’s bigger than any one company.”

Speaking to Computer Weekly, sources close to the current full-fibre roll-out plan warned that nationalising Openreach and other fibre builders could actually be a “huge distraction” to rapid fibre roll-out.

The spokesperson added that it would be extremely complicated and expensive to separate Openreach, as all network assets are currently owned by the BT Group, and deciding how to split equipment within the UK’s 5,600 exchanges would be a significant technical and legal exercise. There could also be significant upfront cash payments to the BT pension scheme.

Analyst criticism

Matthew Howett, founder and principal analyst at regulatory, policy and legislative research body Assembly, saw in Labour plans echoes of the struggling National Broadband Network (NBN) in Australia. “This is a spectacularly bad take by the Labour Party,” he said.

“The almost cut-throat competition between broadband rivals has meant faster speeds, improved coverage and lower prices for consumers up and down the country. The current government, and independent regulator Ofcom, have spent the past three years incentivising alternative operators to BT to deploy faster fibre technologies. Companies such as Virgin Media, CityFibre and others have committed billions to rival Openreach. Those plans risk being shelved overnight.

“Only one other country in the world has come close to going down this route, and for a good reason – it’s hard, expensive and fraught with difficulty. Australia’s NBN is years late, massively over budget, and offering speeds and technology a fraction of the original political intention.”

Julian David, CEO of UK technology trade association techUK, also poured scorn on Labour’s plans, condemning them as potentially being “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,” he said.

“Full-fibre and 5G are the underpinning technologies of our future digital economy and society,” said David.

“The majority of the estimated £30 billion 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 setback for the UK’s digital economy, which is a huge driver for growth,” he said. “Labour’s plans are fundamentally misguided and need to be dramatically altered if they are to deliver the infrastructure we all need.”

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