Labour & Broadband

Firstly, a disclaimer: this isn’t a political piece – it’s simply my initial take on the Labour Party’s pledge today to provide a free full fibre (FTTP) service to every home and business in the UK by 2030. The method by which they will do so is to nationalise OpenReach, and subsidise the rollout and running of a universal fibre infrastructure through a tax on largely non-domiciled tech companies.

Disclaimer aside, let’s look at the individual elements of this proposal:

Infrastructure and Politics

Since the late 1980s, successive governments, of all colours, have failed to grasp the nettle of providing what is an essential full fibre infrastructure for the UK. Indeed, it was the Thatcher government that cancelled BT’s (pre-privatisation) plans to build a full fibre infrastructure across the UK in the 1990s. Since then, the rollout of broadband services has, where subsidised, been something of a box ticking exercise, the government being a willing co-conspirator with BT/OpenReach, the former throwing significant sums of public money at the latter to roll out a technology (FTTC) that was obsolete before it was introduced.  This has been no more than a cynical exercise, by both BT in ‘sweating’ existing copper-based assets and by government in allowing them to check the Superfast broadband box, no matter how poorly performance, reach and future proofing compared to, well, pretty much any alternative.

Then there’s the type of network to be constructed: The central and devolved governments in the UK have a less than stellar track record in determining what technologies and architectures to roll out, and a worse record in delivery, even in their latest thinking. This is exemplified by the Scottish R100 programme which, even before roll out has really started, is already late, and appears to be an emasculated shadow of its original intent.

Today’s speeches from Jeremy Corbyn, John McDonnell and Rebecca Long Bailey reference those box-ticking figures of download speeds, not the importance of matching upload capability: we’re already at the stage where, for both homes and businesses, upload speeds are becoming just as important: the rise of cloud services, smart homes, the IoT, AI and AR sees to that.

That matters, as most of the FTTP infrastructure that BT/Openreach have put so far in is asymmetric: It may provide something between 300Mb/s and 1Gb/s on download (albeit contended locally) but typically only 20-30Mb/s upload. Most other commercial providers and alt-nets have made sure that they’ve put in symmetrical networks, which provide the same level of service in both directions and which aren’t contended in the last mile. So, if there is to be any avowedly future proof national infrastructure, it needs to ensure that the network is symmetrical in performance. And the FTTC local network, recipient of much of the government largesse of recent years is, beyond the core network that gets to exchange level, almost entirely irrelevant to a full fibre network – the UK is, in any case, going to have write off that particular ‘investment’.

Strategy

The UK is very poorly served for high-speed internet services, by which I mean services whose performance can be scaled to whatever we will need in future and without replacing the in-ground infrastructure. 

Setting aside commercial economics, a critical barrier to entry for last mile providers in most rural areas is the lack of availability of accessible and reasonably priced backhaul services to the internet. Here, Openreach has been notably recalcitrant in providing access, quoting huge Excess Construction Costs (ECCs) for anyone asking for a service to a given distribution point. Another barrier, and one that impacts urban providers even more than rural ones, is getting the wayleave agreements to run fibre to where it’s needed. In some cases, it’s nearly impossible to find out even who owns land or property that a network needs to cross – this is actually a notable problem in the heart of the City of London, where so many commercial properties are owned by untraceable offshore trusts.

Given that Openreach is something of a monopoly, and that I pragmatically regard the only thing worse than a public monopoly to be a private one, I have great sympathy for the intent to place Openreach under public control, so that its activities are focussed on the enabling of national economic and social development over quarterly shareholder value. That doesn’t however have to mean nationalisation – there are multiple means of applying a public service remit to an enterprise, and full nationalisation appears to be rather much of a blunt instrument. And the goal of completion by 2030 is so far out as to be crippling to large parts of the UK economy.

Fibre is also an essential enabler of another transformative technology, 5G services: if these are to become ubiquitous, fibre also needs to be ubiquitous so, again there is another national strategic driver for the roll out.

Finally, the elephant in the room here is the ability of government to effectively run a nationalised industry or infrastructure: the nearest equivalent to Labour’s proposal is Australia’s government-directed National Broadband Network (NBN).  The NBN has become a byword for poor service, unreliability, delays and cost overruns. Given that Australia’s public bureaucracy is largely based on the British model, this is not a comforting thought.

Funding

Here, I’m not remotely convinced by the proposed ‘free’ model of delivery: yes, it’s a fundamentally essential public service but, even in the days of the Post Office and British Rail, we still paid an arguably fair price for their services. Here though, we’d simply be moving how we pay for the service from a direct charge to indirect payment from taxation, and it’s a fundamental human attribute that we don’t value that which gives the appearance of being free.

So by all means subsidise build out and access in those areas that fall below the threshold for commercial viability and for those who genuinely cannot afford access fees, but why put public money into areas that are healthily served by commercial operators, for people who can cheerfully afford to pay a reasonable sum for it?  And I do suspect that the first unintended consequence of this proposal will be to immediately stall all investment and merger activity by commercial network operators in the UK, at the very least until after December 12, and possibly for a great deal longer.

Labour’s proposal is to fund much of the project’s operations through a tax on multinational tech companies. Now, if you believe in corporate social responsibility, whether voluntary or imposed, there is a reasonable argument to be made for taxing companies who’ve built most or all of their revenue on the back of the great collaborative effort that was the public internet. This is especially the case when you consider that most have a record of playing fast and loose with tax, accounting and headquartering legislation to minimise the tax they pay in any territory relative to the revenue raised in that territory. However, the Labour proposal is to tax them not on economic activity taking place in the UK, but on their global revenues, pro rated by the level of their activity in the UK, including their staffing and investment. So there’s an apparent penalty here on those companies who actually invest in their own presence in the UK. I can’t help but feel that something really hasn’t been thought through here.

Impact

I’ve already referenced the likely hold on investment in infrastructure over the next month. But many other questions arise here:

  • What happens to the commercial and cooperative internet exchanges across the country? 
  • How will specialist needs for secure and/or ultra-bandwidth point-to-point connections be served?
  • BT is not the only operator: what happens to commercial operators of high-speed service such as Virgin, Cityfibre, Gigaclear or Hyperoptic, all of whom are investing heavily in their networks? 
  • And what about all the alt-net providers, who already have a measure of social focus, including the B4RNs and, of course, ourselves at BCB and our respective service providers: these are networks built on good faith models with huge capital and ‘sweat’ equity from their communities. Will they be overbuilt by a nationalised service or will they be rolled into the national service and, if so, with what compensation for the communities who have built them?

The Basics

Relatively few people now argue against the crying need for universal fibre network in the UK. Here, the very basic needs are for:

  • Provision of a resilient, diverse open access core network, with local break-outs across the country, so that any operator, commercial or community, can focus on serving their local catchment, without the often crippling cost and logistical barriers of long-distance backhaul.
  • Provision of a service layer that offers common services such as security and attack identification and mitigation across the network, albeit that this raises control issues in the event of a government that seeks to override the rule of law and the basics of democracy. But that’s not going to happen, is it?
  • Making wayleaves easier to obtain, particularly from absentee and ‘hostage taking’ land owners.

Given that, a government can then be selective in where they put public subsidy, either directly or via incentives, to build the last mile services to each part of the country: each will have its own issues, priorities and barriers to delivery. And wouldn’t cancelling the Great White Boondoggle of HS/2 free up huge sums for the roll out of a universal fibre network? That network would in itself reduce the need for CO2-emitting travel and therefore remove pressure on our existing physical transport infrastructure. But perhaps that’s too much like a win-win for our current political climate.

Summary

There are well-intentioned elements to Labour’s proposal, but – on the information we currently have – it is framed as a blunt instrument and one that will inhibit the solution rather than enable it, raising more issues that it would solve.

Having read through the text of the various leaders’ speeches on the subject, I can’t help but get the impression that this policy has been created in a great hurry as a populist soundbite,  with little understanding of the market dynamic around fibre broadband, less of the technology required and with little regard to the law of unintended consequences. Whilst the aspiration is laudable, albeit something we’ve been hearing since the 1980s, and some elements are just common sense, much of the approach outlined just doesn’t seem to add up, at any level.


The author has been designing, building and playing with networks since the early 1980s. He is co-founder and a Director of Balquhidder Community Broadband, a Community Interest Company that has partnered with Bogons, an alt-net service provider, to bring future proof gigabit fibre broadband to the Balquhidder area of the southern Scottish Highlands. Some 3/4 of the properties in the area are now connected, including the most remote farms, thanks to more than a decade of determined effort and huge efforts on the part of the local community to ‘just do it’.

This article is my personal view, and is not necessarily that of every member of BCB, hence it’s being posted on my company blog rather than that of BCB.

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