Europe Politics

UK's Labour vows to nationalize some of BT in free broadband plan

Labour Party leader Jeremy Corbyn addresses Labour Party members and supporters on 25 July, 2019 in London, England.
WIktor Szymanowicz | NurPhoto | Getty Images

Britain's opposition Labour Party said it would nationalize parts of telecoms provider BT's network if it won power in the December 12 election to provide free full-fiber broadband for all.

The sweeping upgrade of Britain's internet infrastructure would be paid for by raising taxes on tech firms such as Alphabet's Google, Amazon and Facebook and using its Green Transformation fund, Labour said.

Labour said it would nationalize Openreach - the digital network arm of the country's biggest broadband and mobile phone provider — as well as parts of BT Technology, BT Enterprise and BT Consumer.

"It's time to make the very fastest full-fiber broadband free to everybody, in every home in every corner of the country," Labour leader Jeremy Corbyn will say in a speech, according to an extract released by the party.

"By creating British Broadband as a public service, we will lead the world in using public investment to transform our country, reduce people's monthly bills, boost our economy and improve people's quality of life."

Labour said the cost of nationalizing parts of BT would be set by parliament and paid for by swapping bonds for shares.

A BT spokesman said in an emailed statement that rolling out full-fiber broadband and 5G across Britain should be a top political priority. He did not specifically address Labour's nationalization plan.

"Whatever the result of the election, we'd encourage the next government to work with all parts of the industry to achieve that," the spokesman said.

Promised saving

Currently, fewer than 10% of British premises have access to full-fiber broadband — also called fiber to the premises, where fiber optic cable instead of copper is used to connect homes to the network.

Labour said it would roll out the free broadband to all individuals and businesses by 2030, providing it to at least 15 million to 18 million premises within five years. It said the plan would save the average person 30.30 pounds a month.

Prime Minister Boris Johnson has already promised to roll out full-fiber broadband to all homes by 2025 with an investment of 5 billion pounds ($6.4 billion) if his Conservatives, who are leading in the opinion polls, win the election.

BT's Chief Executive Philip Jansen said last month that Johnson's timescale would be extremely difficult to achieve and said the company would need the government and the regulator to create conditions that would allow it to make a fair return.

The company, which was privatized by Margaret Thatcher's Conservative government in 1984, said it could fund the 25 billion to 30 billion pound cost of building a full-fiber network by issuing debt, reallocating capex, disposing assets, and by cutting its dividend.

Under its plans, Labour said there would be a one-off capital cost of 15.3 billion pounds to deliver the full-fiber network, on top of the 5 billion already promised by Johnson.

What is a digital tax?
What is a digital tax?