WHEN big corporations supplying critical services exploit their dominant positions, there are two common solutions: from the left, public ownership, and from the centre and right, “more competition.”

The “more competition” plan was tested in energy supply: instead of bringing lower prices and more choice, “more competition” just let a load of spivs cash in while the public was left with a £6 billion-plus bill. Now it looks like the same might be happening in broadband supply.

In energy, the government and the regulator Ofgem were under pressure over the behaviour of the big six energy suppliers. Many felt the top energy firms used their dominance to overcharge customers and generally treat them badly.

The government faced a political challenge: in 2013 Labour’s then-leader Ed Miliband gained popular support by saying energy firms should face a price cap to stop them from ripping off customers. Then in 2017, under Jeremy Corbyn, Labour committed to renationalising energy.

The renationalisation argument goes like this: energy is an essential product that people can’t do without, so suppliers don’t face much competition.

You can’t easily switch from mains electricity and gas to running your telly with a bicycle dynamo and your heat with a peat burner, so suppliers have the whip hand. They already act like monopolies, so they need to be publicly owned and run for social need, not easy profit.

This argument was particularly strong in energy, as the firms had once been publicly owned but switched from a public monopoly to a series of private near-monopolies.

The government and Ofgem felt under pressure, but didn’t want more public regulation, let alone public ownership — so they went for the “free-market economics 101” argument and tried to stimulate competition to bring down prices.

They set a low bar for entry, and soon nearly a hundred new suppliers with stupid names like Whoop Energy, Zog Energy, Igloo, Usio and Bulb entered the market.

But the competition was phoney. Many of the firms were get-rich-quick schemes based on grabbing a market share with silly advertising and introductory offers, but no real substance.

When oil prices started rising and a limited cap was forced on the government, they nearly all went bust. The government had to set up a Supplier of Last Resort scheme, so customers of the firms going bust weren’t disconnected. A failed free-market experiment was replaced by an intense level of government control.

But while there was public control, there was no public ownership. Instead, the remaining private firms just demanded profits from the failing system. The cost of bailing out all the failed suppliers and buying off the remaining big firms — mostly the old big six — exceeds £6 billion. The “more competition” solution failed so badly that one firm, Bulb, had to be taken over for a period, then sold cheaply in a secretive process.

The free-market solution led to more government subsidies, with that subsidy flowing into the hands of private investors.

A recent article in the Sunday Times suggests a similar thing might be happening in broadband supply. One crucial, if under-reported fact is that broadband rollout in Britain is heavily publicly subsidised.

The government, recognising broadband is essential to both the economy and society in general, is funding broadband rollout because — left to themselves — private firms would just wire up the easy-to-reach, higher-income urban areas. Between 2011 and 2020 broadband firms got £1.9bn from the public through the “superfast broadband” programme. The money is a mix of central and local government cash administered by the Department for Culture, Media and Sport under its Building Digital UK department. The government intends to spend around £5bn in total on what it has named Project Gigabit.

The lion’s share of this cash has gone to BT and its broadband division, Openreach. It is making loads of profit, but not working hard for the money. Subsidising one or two big private corporations for an essential service has left Britain with some of the least impressive superfast broadband coverage in Europe.

This was the context of Corbyn’s policy to nationalise BT Openreach, turn it into British Broadband, and make it a free public supplier. Broadband relies on public funds, but we the public are getting poor results. Unthinkingly, a lot of Labour rightwingers attacked party policy here rather than highlight the government’s subsidised failure — quite possibly because they did not understand it.

They also, stupidly, tried to treat broadband as some kind of middle-class luxury, just before the pandemic demonstrated it was an economic and public essential.

Despite the Labour right shooting the wrong way, the government is embarrassed about broadband’s failures. It has gone for the “more competition” model it used in energy — boosting an array of alternative suppliers. Unhappy with BT’s slow progress, the government encouraged other suppliers, called “altnets,” to start laying broadband fibre-optic cable.

However, the Times reports that these altnets have not made much more progress. Once again, they have often concentrated on the easier areas and “we’ve ended up with hundreds of fibre companies all building in the same places.”

Now this unproductive competition might be hitting a limit, as some of the altnet bubbles might burst, with some of the fibre firms in danger of going bust. The existing customers they have cabled up could see their broadband turned off — so just like with energy, the government is setting up a Supplier of Last Resort.

Customers of failed broadband firms will be shunted back to the old monopolistic firm, BT. The cost of these bailouts will be borne by the customer or the government. Just as in energy, trying to break monopolistic firms by encouraging new entrants might end in costly failure.

The other alternative is public ownership and management of what has become an essential public service, and this is clearly the way to go — but our shallow, narrow political and media ecosystem turned on that plan when it was raised by Labour.