In election pledge, UK Labour promises free broadband for all
Labour said it would bring the parts of telecoms giant BT that deal with broadband into public ownership, as part of a sweeping programme of nationalisations.
“The internet has become such a central part of our lives. It opens up opportunities for work, creativity, entertainment and friendship,” said Labour leader Jeremy Corbyn.
“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.”
Prime Minister Boris Johnson called the Labour plan “slightly fantastical” and ruled out a similar “crackpot scheme” that would cost “many tens of billions” of taxpayers’ money.
A technology lobby group, TechUK, also warned the move was “fundamentally misguided” and would spell “disaster” for the telecoms industry and hit the fast-growing digital sector.
“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,” said the group’s chief executive Julian David.
BT, whose shares fell 3.7 percent on the news before rebounding, warned that Labour had underestimated the cost of its plan for full, free coverage by 2030.
Labour proposes to privatise BT’s Openreach, which runs almost all of Britain’s existing digital network, and other elements of the firm to create a new public entity, British Broadband.
It predicts a one-off cost to establish a network of £20.3 billion (23.7 billion euros, $26.1 billion).
The cost of privatising the relevant parts of BT would be set by parliament and paid for by swapping bonds for shares.
Annual maintenance costs would be around £230 million, Labour said, to be covered by a new tax on global digital companies such as Amazon, Facebook and Google.
But BT chief executive Philip Jansen said Labour’s goal was “very, very ambitious”, telling the BBC that building the network alone could cost £30 to 40 billion.
There would be further costs associated with staff pensions, while Openreach currently has a revenue of £5 billion a year.
The pledge is the most radical so far in the campaign for the December 12 election, which has been dominated by Britain’s looming exit from the EU but also by promises on all sides to end a decade of austerity measures.
Labour wants to nationalise the water companies, railways and mail delivery services and has pledged hundreds of billions of pounds (dollars, euros) in investment.
Johnson’s Conservatives, who were responsible for the belt-tightening measures since 2010, have promised more money for infrastructure and public services, but not on the same scale.
Improving broadband coverage and speeds has become a priority for both parties in a bid to improve productivity, particularly in rural areas.
Only eight to 10 percent of premises are connected to full-fibre broadband, compared to 97 percent in Japan and 98 percent in South Korea, Labour says.
It claims that a fast, comprehensive network could boost productivity by £59 billion by 2025.
Johnson meanwhile has promised that every home would have full-fibre broadband by 2025, and has committed £5 billion for that and 5G networks in the hardest to reach areas.
His digital minister, Nicky Morgan, warned: “Jeremy Corbyn’s fantasy plan to effectively nationalise broadband would cost hardworking taxpayers tens of billions.”
The Institute for Fiscal Studies estimates that Labour’s costed pledges on investment — not including the full price of the nationalisations — amount to £55 billion a year for the next five years, compared to £20 billion for the Tories.
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