Labour’s free broadband will harm business, warn tech chiefs
LABOUR’S plans to nationalise Britain’s broadband network could put hundreds of companies out of business and risk thousands of jobs, industry leaders have warned.
Jeremy Corbyn was last night facing a revolt from business leaders after he announced plans to take BT Openreach into public ownership and spend £20 billion on rolling out free full-fibre service within a decade.
Philip Jansen, BT’S chief executive, disputed Labour’s costings and indicated the true price could reach almost £100 billion.
John Mcdonnell, the shadow chancellor, went further by suggesting that other providers could also be nationalised if they refused to provide access to their part of the network.
Asked what would happen if firms such as Virgin Media, Sky and Talktalk refused to cooperate, Mr Mcdonnell said: “If necessary, they can then come within the ambit of British Broadband. I think we can come to an agreement, but if necessary – they are only 10 per cent of the market.”
BT’S share price fell 4 per cent shortly after the announcement, while Talk Talk also announced it had postponed the sale of its full-fibre business, Fibrenation.
Although Labour insisted it does not want to interfere with the services offered by other private providers, analysts warned the roll-out of free broadband would force many out of business.
In a letter published in The Daily Telegraph today, members of the internet Service Providers Association (ISPA) also claim the policy will “fundamentally jeopardise” more than 600 companies who use the Openreach network to sell services.
The signatories include the chief executives of major internet provider groups representing thousands of firms, including Sky, Virgin Media and BT.
Warning that Labour’s plans will delay the roll-out of high-speed broadband for years to come, the letter states: “As an industry, we believe Labour’s proposals will undermine the significant investment and existing network build already under way, leave consum- ers with reduced choice and risk thousands of jobs, both now and in the future. They also fundamentally jeopardise the 600+ other communications businesses that use these infrastructures to connect their customers.
“These businesses appear to have no role to play in Labour’s nationalised broadband service, with the sector’s 181,000 employees left out in the cold.
“There is no such thing as ‘free’ broadband, and these proposals wildly underestimate the level of investment required to deliver full nationwide coverage and the operational costs of delivering services.”
Echoing their concerns, Mr Jansen told the BBC that the total cost of the roll-out of free full-fibre broadband was likely to be between £30billion and £40 billion.
He pointed out that breaking up BT would have significant implications for the company’s £60 billion pension fund, along with its thousands of staff and shareholders.
He said shareholders had already suffered “massive losses” in the past two years, adding that further losses would only damage confidence in the sector.
Matthew Fell, policy director at the Confederation of British Industry, added: “With so many challenges facing the UK, blinkered ideologies must be left behind and replaced by forwardlooking public-private partnerships that deliver, rather than delay.
“As the scope of Labour’s radical renationalisation plans expands almost daily, firms around the world lose confidence in the UK as a place to invest safely. Some will be asking if they are next. This threat damages the livelihoods of communities across the country. It’s time for all parties to work with business, not against it.”
Experts suggested that Labour had significantly underestimated the cost of maintaining the network, which Mr Mcdonnell placed at £230 million a year.
However, Mr Corbyn insisted that by providing “gold standard” full-fibre broadband to the entire country, a Labour government would be putting Britain “at the cutting edge of social and economic change”.
“Fast and free broadband for all will fire up our economy, deliver a massive boost to productivity and bring half a million people back into the workforce,” he said in a campaign speech in
Lancaster. “It will help our environment and tackle the climate emergency by reducing the need to commute. And it will make our country fairer, more equal and more democratic.”
Labour also indicated that it could seek to reintroduce restrictions on pornography, after plans for age verification on adult websites were shelved by the Conservatives.
Asked whether it could use the stateowned network to stop people watching porn, shadow business secretary Rebecca Long-bailey said: “Alongside this, we’ll be rolling out what we’re calling the charter of digital rights to protect users of the internet, as well as making sure our data is protected.”