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UK ISP Association Blasts Labour’s Nationalised Free Full Fibre

Thursday, November 21st, 2019 (2:48 pm) - Score 2,089

The UK Internet Service Providers Association (ISPA), which represents 200 broadband and other internet providers within the sector (many more than this number exist), has today warned of “deep flaws” within Labour’s new proposals for broadband (here) and said that the “entire telecoms sector” is echoing similar concerns.

At present the ISPA notes that there are over 7,000 businesses who are part of the telecoms value chain in the UK who could be affected by these plans, and there are approximately 180,000 people employed in the country’s telecoms sector, of which about 83,000 are employed by BT and Openreach alone. The association believes there are potentially over 100,000 jobs that might thus be affected by Labour’s plans.

In the industry today there is a general sense that Labour seem to have a fundamental misunderstanding of how the sector works and its many different levels. Broadband is also one of the very few industries where consumers actually get more (e.g. Mbps and data usage) for their money with every passing year. Meanwhile many of its perceived flaws could be resolved through existing regulators (e.g. Ofcom, ASA etc.) or new legislation.

Few, if any, within the industry see any case for the kind of root and branch public nationalisation being proposed by the Labour Party. Nationalising Openreach is of course one thing, but then creating your own ISP as a platform to offer every home and business a free “full fibre” service is arguably, some fear, the final nail in the coffin for commercial ISPs and private investment (Labour has not said what such a free service would look like).

Andrew Glover, ISPA Chair, said:

“The entire telecoms sector has repeatedly raised strong concerns about the deep flaws in Labour’s proposal. The proposal is expected to disrupt current rollout plans, prevent families and businesses from accessing gigabit broadband for years on end and threaten thousands of ISPs who sell products and services through UK broadband infrastructure and the tens of thousands of people they employ.

Broadband is fundamentally different to rail, electricity and water. Rollout is largely privately funded and we have a vibrant and innovative market with hundreds of SMEs competing with each other, offering real choice to consumers. There is a real risk that Labour’s plans jeopardise thousands of jobs and the future of small and medium sized businesses in the sector. Any plan to fundamentally change the telecoms sector should be done on the basis of a proper understanding of the market and through constructive discussions with the industry.

We invite Jeremy Corbyn and his team to directly engage with the small, medium and large businesses that make up the ISP industry so that they can understand the impact that Labour’s plans would have on jobs, investment and existing rollout plans.”

At this point it’s notable that the ISPA has so far commented on Labour’s pledge no less than three times (one was a joint statement), although their initial position was much more reserved. Sadly anybody hoping for Labour to add a little extra clarity – or to adopt a bit more pragmatism – in today’s manifesto launch would have been left disappointed. The party made no changes, despite the earlier criticisms, which might explain the ISPA’s more direct tone.

Labour has of course pledged that “all current workers in broadband infrastructure and broadband retail services will be guaranteed jobs in the new public entity and be guaranteed the same or better terms and conditions,” although many ISPs view this as unrealistic. For example, does labour plan to employ staff on comparison sites or at third-party network operators that may go out of business as a result of such a policy? Unlikely.

Meanwhile others are concerned about the risk of creating a new government owned state monopoly, which would have immense power and influence over online privacy and internet traffic in general.

After spending decades trying to break up monopolies, some will surely feel that attempting to re-create a new one is a bit like going backwards rather than forwards. At present what the industry and private investors, which are already reeling from the potential impact of Brexit upon complex supply chains, needs most right now is some stability. Doing the opposite risks slowing the rollout of full fibre (years of legal battles, private investment drying up etc.) rather than boosting it.

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29 Responses
  1. Avatar GNewton

    “Meanwhile many of its perceived flaws could be resolved through existing mechanisms (e.g. Ofcom and the Advertising Standards Agency).”

    Sorry, but the ASA has been a failure to do its job. Just look at its “fibre broadband” fiasco, calling copper lines fibre.

    • You’re overlooking that a new government could change that. Those agencies may preach some degree of independence but that can be changed through legislation. The comment is not about continuing to do things in the same way, it’s about recognising that channels exist to effect change and that change has to come from the top (i.e. you don’t need to scrap the entire industry).

    • Avatar NGA for all

      Mark, Ofcom’s believed FTTC VULA was sufficient in 2010-16 and was even slower than BT to accept full fibre. Full fibre was for ‘business connectivity’ carrying an associated premium and subsequent opportunity cost when changed out.
      The changes since 2016 have got the UK on a reasonable trajectory but if that started in 2013, which it could have done with BT’s ‘mixed economy’ solution and if the investment promises then made (£2.5bn v £1.3bn) plus the matched funding for rural (£500m) were delivered in the form of more boots on the ground as opposed to gaming costs under commercial confidentiality agreements, this distraction, hopefully temporary, of re-nationalisation could have been avoided.

    • Avatar David

      I don’t see how the ASA would even be involved – They offer free FTTP – Customer gets free FTTP – no advertising problem

      I would expect more people like the ISPs themselves and the unions to pop up, considering how many people who are not engineers will be out of a job through this – Corbyn says he wants to preserve jobs whilst announcing he will do harm to them at the same time.

      The whole Election thing is a funny load of nonsense to me

  2. Avatar NGA for all

    We have had the full set now, subsidy (£1.7bn + aBT £500m), separate, legislate for a B-USO, subsidise some more (£5bn) and now nationalise, with no mention of the spectrum policy that extracts many billion since 2000. The evidence base to support the latter four ignores the existing funds outstanding and referenced in the EFRA report in September.

    It does highlight a frustration where the manpower (personpower?) issue for in-fill was never recruited for the initial BDUK programme in 2012. The lack of sufficient resource will slow whatever attempt is made to accelerate roll-out.

  3. Avatar Z

    This decision will destroy the commercial telecoms industry. Instead of funding just one company to provide free broadband, how about the government subsidies every full fibre plan something like 70% ish.

  4. Avatar Phil

    Of course there is no such thing as ‘free’ here. We will all end paying for our free broadband one way or the other, except with this model we will have little if any option to move suppliers as most will go out of business, and if we do want something better than “State funded broadband”, we’ll end up paying twice, once via taxes for a service we don’t use, then again to a private supplier.

    Also broadband isn’t a necessity to life, why supply it for free to everyone, it’s not as though the vast majority of people can’t afford it, and those that are perhaps on benefits and struggling might rather have free electricity, free transport or free mobile data than free broadband.

    We had Johnson making silly promises about fibre for everyone with an improbable deadline, and now this from Corbyn, they are just showing the world they are completely out of touch with modern technologically and the associated industries.

    • Avatar Timeless

      I disagree in part regarding it being a “nessesity to life”.

      these days many services have moved to be online only leaving those without access at a disadvantage, for example, you loose your job and need to claim a benefit.. you can now only apply online you cannot do it offline, now you may suggest doing it for a local library computer.. well many have closed and dont offer the ability to use their computers any more due to funding cuts not to mention many jobs are can only be applied for online only these days, thats just two of many services that have moved to online.

      now in theory l do like Labours plan in respects to internet, but what l want to hear is more information from the technical aspects of their plans because while ISPs may have legitimate issues most are likely down to their ability to make profit.

  5. Avatar TheTruth

    If labour win the next general election god help all of us, the youngest who believe his promises of a better future for all will be paying for his mistakes long into the future.

  6. Avatar beany

    Well he has one thing right Labours broadband ideas would be a disaster.

    HOWEVER SORRY BUT that is where anything he has to say should end and the BIG pinch of Salt(iness) begins…….

    “Andrew Glover, ISPA Chair, said:…
    Broadband is fundamentally different to rail, electricity and water.”

    Meanwhile…
    https://www.ispreview.co.uk/index.php/2019/05/let-isps-get-on-with-the-job-of-rolling-out-and-delivering-broadband.html
    “Broadband is no longer a luxury good, but flows through households and businesses as freely as running water.”

    Err its either like water or it is not Mr Glover.

    and finally…
    https://www.ispreview.co.uk/index.php/2019/09/isp-association-on-the-risks-of-brexit-doh-and-uk-full-fibre-targets.html
    “Andrew Glover is the current Chair of the ISPA and was also instrumental in founding both the EuroISPA and the Internet Watch Foundation (IWF). On top of that he runs three smaller ISPs – Bridge Fibre, Air Broadband and Connect Fibre”

    DoH is also evil, but because of public backlash we took that away as a villain…
    https://www.ispreview.co.uk/index.php/2019/07/ispa-pulls-uk-internet-villain-category-over-mozilla-doh-fallout.html

    So the long and short of the argument…

    Don’t vote Conservative cos Boris might do bad Brexit things which may affect my business.

    Don’t vote Labour cos Corbyn is gonna ruin my businesses by making broadband state owned

    Vote Lib Dems cos like them i cant make up my mind on things as simple as if broadband is similar to water or not. I also think DoH is bad but as others got upset i and my chums removed them as a villain and in general Like Jo and friends i will flip flop whichever way convinces people and only apply democracy as and when suited.

    Obviously he cant say that outright though eh…
    All along you folks thought according to the media it was only naughty Russians trying to manipulate elections ; ) Still i spose with faceblank and twitsru cracking down on political shinanigans other outlets have to be found.

  7. Avatar kaimagpie

    THERE ARE NO FLAWS IN LABOUR POLCY. It is embarrassing that anybody should continue pussyfoot around.

    30 years ago, Thatcher gave away our fibre technology. http://www.wrayvillage.co.uk/documents/cochraneHOL.pdf

    “… By 1990, BT, with DuPont, had built … factories, employed nearly 1,000 people manufacturing the components … for rolling out fibre to the home. It was stopped by Thatcher Government and Sir Keith Joseph. They wanted the American cable companies in. The programme was stopped, and who was right behind us? The Japanese and the Koreans. … since about 1991, they have rolled out fibre to the home and we went backwards in time. That is the political failure. ”

    IMO Labour’s BB will be great for this whole country, accelerating the catching up we have to do, and give the government, owner of the fibre transport, the ultimate negotiating power to get the global content giants to pay their taxes from their profit earnings on British consumers.

    • Avatar dee.jay

      Why do you think the government would be so good at it though? It’s a terrible, terrible idea to put companies under national ownership. It just doesn’t work.

    • Avatar GNewton

      @dee.jay: What alternative do you suggest, in order to achieve a quick catchup and a wider FTTP coverage? And how can wasteful duplication of network infrastructures be avoided?

    • Avatar Fastman

      hmmmm MO Labour’s BB will be great for this whole country, accelerating the catching up we have to do, and give the government, owner of the fibre transport, the ultimate negotiating power to get the global content giants to pay their taxes from their profit earnings on British consumers.

      IMHO you clearly know very little about how the telecommunications market work today or this an “fishing email”

    • Avatar James W

      One of the biggest issues facing the roll out of FTTP is wayleaves.

      Rogue property managers and freeholders stopping the installation of better services.

      This can only be changed via the government and the current government (Conservatives) have already mentioned that this is on the agenda. Prior to the election campaign starting.

  8. Avatar GE

    General Election has to be postponed until June 2020. We haven’t got time to go to polling station. Peoples are too busy preparing their xmas. So, sod bloody GE for all I care.

  9. Avatar Itsjustanotherbribe

    Your deluded if you think nationalising broadband is going to be success, it will put many thousands out of work, it will go massively over budget,it probably won’t work and we will all end up paying for it. It is just another Corbyn bribe, and I pity the country if enough people are taken in by all these bribes.

  10. Avatar TomD

    I did appreciate one of your quotes recently from the Telefonica CEO:

    Mobile has become so much more than the phone in your hand; it’s the *glue that powers the UK’s economy* and will be a fundamental component of our national success in the years to come.

    (Asterisked part)
    Now that’s before nationalisation!

  11. Avatar Roger_Gooner

    The problem is that the Labour Party doesn’t understand the broadband industry and believes that nationalisation is the answer to whatever the question is. That’s the reason for their announcement without any discussion with the industry. Any rational assessment of their plan shows loss of innovation and jobs, not to mention an increase in taxes to pay for it all.

  12. Avatar kaimagpie

    The way I see it, the future of major telecoms brands in this country is in offering packages with contents and mobile. Making Gbit fibre broadband available at every address will simply help industry to speed up evolution of this country’s telecoms.

    Nationalising broadband makes fantastic sense because we are already stuck in a situation where current roll out is entirely relying on government money to subsidise the private sector’s inability to fully fund fibre street boxes and installations.

    (Personally, I had bad experience of fibre. Not impressed at all with their hard sales, they even tried cheat us with fake authorisation signatures.)

    Governments have been running National Rail, that evolved from the disappointing private Railtrack, and that seem to be working so well that it’s rarely in any news.

    Another top reason for Labour’s universal BB vision is that it will boost the housing market and employment prospects in poorer or remote regions by making them more connected to the world economy.

    • Avatar Roger_Gooner

      “Nationalising broadband makes fantastic sense because we are already stuck in a situation where current roll out is entirely relying on government money to subsidise the private sector’s inability to fully fund fibre street boxes and installations.”
      If you’re unhappy with the BDUK scheme which has helped to extend 24Mbps broadband to millions of additional premises then why not suggest ways to improve it. It’s nonsensical to say that nationalisation must be the answer.

  13. Avatar Rahul

    It is quite obviously a fantasy. Corbyn is not going to even be able to achieve 100% UK FTTP coverage by 2030 never mind giving it away for free. This is one of those election tricks to win votes, so that way when 2030 comes he will no longer be in power and everyone will forget or at least he will come up with an excuse to not deliver and that excuse will be “no longer being in power.”

    Promising free Full Fibre is one thing and getting wayleave agreements with private landowners and building managements to finally give you the permission to install Fibre down your building and property is going to take years until new legislation’s can be made. As I’ve said before I’m a Hyperoptic Champion of my building and I know having struggled to get my building management last 4 years to make an agreement happen here near the City of London.

    I finally have FTTC as of October the 1st after 10+ years of waiting. It is no wonder the UK mostly has FTTC because it is the only realistic option for now that does not require permissions for the installation of Fibre cables since it uses existing copper cables to deliver so-called Fibre Broadband.

    Corbyn’s free broadband even if it were to be theoretically delivered, will hurt business and will probably bring some other form of tax, perhaps a yearly broadband license tax similarly like TV license to compensate for the free broadband.

    Not to mention ISPs give routers for free to every customer. From where do we expect ISPs to get their money from? Just to giveaway free routers in itself to millions of broadband subscribers costs billions of pounds and ISPs can only afford to do that by charging broadband subscriptions. Just if you were to consider that alone is enough to make this pledge unrealistic.

    Then comes the altnet providers who will hesitate to build their Fibre cables thinking that they will not get subscribers if customers already get FTTP for free using Openreach FTTP network. The Labour party don’t even know how to lie properly. I have never heard once from Corbyn last 3+ years talking about broadband since becoming leader and now with only 1 month before election he suddenly comes up with the free full fibre offer and he seems to think people like me are naive enough to believe that!

    • Avatar kaimagpie

      Not very different from now when service providers are already having to pay to government for licenses to use radio frequencies, or supply finance.

      Under austerity + Tory’s trapped in their own false-narrative propagandas economy-damaging brexit choices, businesses are too coward to complain about the underachieving unambitious broadband while getting £bn subsidies.

      Labour said for years they will set up a National Transformation Fund for capital projects. For lack of public awareness Gbit rightly at back of queue, but now’s the right time to listen to the wider industry and declare the capital investment for the county.

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