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LABOUR’S plan to roll out free high speed fibre-optic broadband to every home and enterprise throughout the country and organise this around nationalising the key elements of BT Broadband has sent a shiver up the spines of big business.
It is not just the threat of a significant loss of revenues as the money which the monopoly owners of these services draw from our use of these utilities and devices vanishes from their profit margins.
It is the prospect that de-commodifying such a significant slice of revenue-producing utilities might set the standard for other sectors and stimulate a change in the way people think about markets.
There is a substantial slab of icing on the cake in the proposal to fund the programme with a tax on the transnational tech companies that depend on the physical infrastructure to make their profits.
The mouthpiece for the broadband suppliers says Labour doesn’t seem to understand the dynamics of the interrelationships in the industry.
This is code for saying Labour does. And so do millions of broadband customers who have been educated in the idiocies of privatisation by decades of commercial chicanery by the parasitic owners of almost everything we need to live in modern society.
By and large most people get their internet services delivered through a technical infrastructure based on British Telecom’s decades-old network of copper wire backed up by big investments in newer technologies.
The logo at the top of our internet services bill simply signifies the identity of the intermediary enterprise that supplies the router and manages the transactions. We pays our money and makes our choice. But really it is a choice between one bundle of bullshit and another.
An behind the bewildering range of different packages and competing offers there is simply a common utility from which this host of nominally different companies buy access and then scheme to make money from selling this to us at a higher price than they pay.
The competition in the system lies largely in the public face these firms put on their sales pitch.
It is no less daft than the stupid system made possible by privatisation in which our gas, water and electricity come from exactly the same source as does that supplied to everyone else. If our “supplier” gets its sums wrong and goes out of business we can still light the gas hob, flush the loo or switch on the telly.
It raises the obvious question: why do we need to pay these people?
Aside from obvious benefit to our budgets that the free delivery of superfast broadband confers – between £30 and £50 a month for most people – Labour’s plan makes sense because Britain is way down the league table in the speed and scale of our digital services. Modern economies depend more and more on the fast exchange of data and on services that cannot function at optimum efficiently with an outdated communications network.
Labour’s plan will aid the diversification of economic activity away from south-east England with substantial reductions in travel and thus a reduction in carbon emissions.
In investment Britain lags behind every developed economy except Greece. The US and Germany invest 20 per cent of GDP, Britain just 16 per cent but critically our private-sector fixed investment relative to GDP is smaller compared to other developed economies.
A fast, efficient, free at the point of use network is a necessary precondition for a productivity-led renaissance of our productive economy. This needs public enterprise and it is clear that it cannot depend on a lacklustre private sector.
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