Is there a case for Labour’s ‘free broadband’ proposals?
Miranda Hall, a researcher at the New Economics Foundation and co-author of forthcoming report on digital infrastructure for Common Wealth, says YES.
Without internet you can’t look for a job, receive childcare and housing benefits, or keep in touch with friends. But across the UK, digital inequalities persist because telecoms providers avoid areas where they can’t make a profit. The market has failed to deliver full-fibre, with only eight per cent coverage, compared to 75 per cent in Spain.
Bringing BT’s broadband network into public ownership would ensure universal access. And — according to the government’s own analysis — a single provider would deliver full fibre for £12bn cheaper than the market competition. The gains are substantial: full-fibre coverage is estimated to provide a potential boost of £59bn to UK productivity.
Fibre networks will be the backbone for essential services like energy, transport and healthcare, so who owns them will shape society. Profit-driven investors should not have this kind of control over the things we need to live.
If publicly owned, in addition to free broadband, this backbone could underpin smart, green public services. Let’s design digital infrastructures to serve people, not shareholder profit.
Julia Behan, a research economist at the Adam Smith Institute, says NO.
First, there is no such thing as free broadband. While Labour’s new policy may sound appealing, you will end up facing higher taxes to pay for it.
More fundamentally, we don’t need Jeremy Corbyn to fix access to broadband — we need competition. A state-run system means poor customer service and excessive waiting times for installation and repairs, much like we already see with NHS waiting times.
Spending £20.3bn to build a state broadband network and £230m a year on upkeep is a costly attempt by Labour to bribe voters with their own money. And the party had already done damage. The mere threat of nationalisation has driven BT’s share prices down three per cent and deterred TalkTalk from unveiling its plans for FibreNation, a multi-billion-pound project to invest in fibre.
Anyway, Australia tried Labour’s plan a decade ago. Unsurprisingly, it proved to be a costly, unpopular strategy that has failed to meet targets and actually caused slower speeds.
BT claims that “technology will save us.” And so it will — as long as it’s not gripped by the dead hand of the state.
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