Jeremy Corbyn Pledges £25bn for National UK FTTP Broadband and Mobile

The United Kingdom’s economy may be hovering just above recession but that doesn’t seem to be a problem for the Labour Party’s embattled leader, Jeremy Corbyn. He has today outlined a new “Digital Democracy Manifesto” that reveals more about his plans to upgrade national broadband and mobile connectivity.

Earlier this month Corbyn launched the opening salvo in his plan to improve UK Internet connectivity / national infrastructure by pledging to invest and lend £500 billion over a 10 year period, part of which would be used to roll-out “high speed broadband” so that the United Kingdom can “stop languishing behind Bulgaria and Romania” (see our analysis of that claim).

Apparently £350bn of this money would come from the public purse via a new National Investment Bank (NIB) and this in turn would be managed independently of the government, which sounds similar to the much maligned Quantitative Easing (i.e. print new money (increased debt) in order to support new infrastructure projects).

The idea of spending more public money at a time when the country is still trying to get its punishing debt pile under control may raise a few eyebrows (£1.56 trillion of Gov debt in February 2015 and rising), but equally even the current Conservative Government appears to recognise that infrastructure does need more investment (we’ve yet to see their exact plans).

However big questions remain over precisely how much of the £500bn would go towards improving digital infrastructure (broadband, mobile etc.) and what kind of service we could actually expect to get back. Today we got a few answers, although the detail is still somewhat vague. As usual we’ll only focus on the Internet and telecoms connectivity aspects.

Universal Service Network

We [The UK Labour Party] will deliver high speed broadband and mobile connectivity for every household, company and organisation in Britain from the inner city neighbourhoods to the remotest rural community.

Apparently the new USN will be supported by £25bn from the NIB above and a party briefing document states that this is the same amount as they envisage being the “maximum cost” for a “nationwide” Fibre-to-the-Premise (FTTP/H) broadband network. Such pure fibre optic networks tend to offer ultrafast speeds of anything from 100Mbps+ and up into Gigabit (1000Mbps+) territory.

The party’s briefing also suggested that £13bn would provide around 80% UK coverage of FTTP, although it should be said that this claim is based off an extremely out-of-date 2008 report from Analysis Mason (‘The costs of deploying next-generation fibre-optic infrastructure‘).

The above figure would clearly need some updating given recent developments and is likely to be less than £13bn, but tackling the final 20% is of course the biggest economic challenge. However the party’s document does appear to recognise this.

Quote from Labour’s Briefing Document

“This investment could be funded at minimal cost to the taxpayer and with the most rapid deployment possible, using the National Investment Bank and relying on all-time low government borrowing costs.

The provision of a valuable national asset would produce significant returns over time, both in economic growth and additional tax revenues arising from growth, far outweighing the initial investment.

Building on existing fibre-optic roll-out schemes would reduce the total costs below this headline figure, and building on current practice we would look to schedule installations where the demand was urgent, such as to existing tech clusters.”

Interestingly Corbyn and /or his allies have previously indicated that he would be in favour of separating Openreach from BT and then effectively nationalising Openreach under public control. This is more radical than the perhaps more commercial approach proposed elsewhere of splitting the two and encouraging the private sector to invest in upgrading the newly independent network.

Politicians, the majority of which often fail to understand even the basics of how telecoms, Internet and broadband networks actually work, usually don’t make for good masters (e.g. Digital Region’s flop). In any case Ofcom appears not to be going for a split, although they are still at loggerheads with BT over the key issue of Openreach’s governance (here).

However Corbyn was today asked whether or not he would nationalise Openreach if he got into power and interestingly his position appears to have softened. Corbyn instead expressed that he had an “open mind” over the issue of ownership, but would still insist that BT had a duty to deliver universal access.

Certainly we’d welcome a big influx of investment to help roll-out FTTP/H connectivity to the farthest reaches, as well as urban areas. But at least part of the challenge would be to deliver that without destroying the many alternative networks that are already collectively spending hundreds of millions worth of private investment on tackling the bits that BT has missed.

As ever, such things are easier said than done and many will be wary about anything that could further increase the national debt. Likewise any new pledge from a political party, particularly one concerning broadband connectivity and massive public spending, should always be taken with a pinch of salt and is somewhat of a moot point because the next General Election isn’t until 2020. A lot can happen in 3-4 years – positions, markets, leaders and the economy can all change, both for better or worse.

UPDATE 1:04pm

Added the UK Internet Service Providers’ Association (ISPA) response to today’s announcement below.

A Spokesperson for the ISPA said:

“ISPA is pleased that the Leader of the Opposition recognises the incredible power of the Internet and the important and positive role it can play throughout our economy and society.

There are a number of interesting policy suggestions in the manifesto, including a proposed Digital Bill of Rights to protect civil liberties and the promotion of digital skills, but more information is required over a high speed broadband Universal Service Network. ISPA members are already rolling out superfast broadband nationally and locally across the UK that covers over 95% of the country using a range of technologies.

Industry has led this transformation, and alongside public funding in harder-to-reach areas, speeds have risen significantly from 3.8 Mbps in 2006 to 28 Mbps today. We call on policymakers to focus on reforming regulations and barriers to rollout to make it easier for companies to deliver broadband.”