UK ISP Association Blasts Labour’s Nationalised Free Full Fibre

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.