Home Business Insights & Advice The reality of Jeremy Corbyn’s ‘free broadband’ for businesses

The reality of Jeremy Corbyn’s ‘free broadband’ for businesses

by John Saunders
25th Nov 19 4:15 pm

On the 15th of November, the Labour leader announced seemingly radical plans to give the country a free, fast WiFi network. On the surface, the policy seemed like a shot in the dark. Although few have complained about the British broadband infrastructure, it’s a juicy apple for voters.

In the internet age, no-one would turn up their noses at free connection – no matter where in the country they are. Plus, the promises of 1GB speeds means easier streaming, downloading and browsing for all. On the flip side, calls for nationalisation are regularly met with cries of ‘communism.’

For businesses, the policy comes with numerous complexities. Will free broadband for all diversify the digital marketplace? Will nationalisation harm economic innovation?

Britain’s need for speed

On the surface, Britain’s internet situation is far from dire. 9 out of 10 households have web access, while is a considerable amount compared to developing countries. However, we’re far from the internet pioneers that we’d like to believe.

Out of 207 countries, the UK only ranks 34th for our broadband speed. Only eight per cent of households enjoy full-fibre connections, meaning 92 per cent enjoy speeds of 1GB. This harrowing statistics leaves us behind two-thirds of Europe, and even some African countries like Madagascar.

Regardless of the associated cost, it’s clear that Britain could benefit from an updated broadband infrastructure.

The renationalisation of British Telecom

British Telecom was formed in 1969 as an attempt to nationalise communications in the country. In 1984, it was privatized, with 50% of shares sold to investors. Openreach, the internet branch of BT, was launched in 2006, and is responsible for the construction and maintenance or the national broadband and telephone network.

Corbyn’s plan looks to renationalise this arm of BT, with the aim of providing accessible internet for all. However, questions arise over the feasibility of the plan. Currently, the shadow prime minister proposes to pay for the scheme with increased taxes on internet giants – such as Amazon.

Criticism arises over the functionality of the plan. Without the same drive for profits, there is no guarantee that the scheme will perform to its highest potential. This argument underlines the risk of nationalising any industry.

Comparisons to Australia’s national broadband network

Since the announcement, the proposal has already brought numerous comparisons to Australia’s attempt at a similar scheme. Often called ‘the blunder down under,’ the project is not viewed positively. The overly ambitious proposal ended up being re-strategized so many times that it overshot the budget considerably. The failure left Australia at 61st in the global ranking of internet speeds.

However, the Australia situation is considerably different from Corbyn’s. Instead of using existing lines, they planned to lay fibre-to-the-node connections all across a country 32 times the size of the UK. Currently, 94% of the UK already uses this system, with a further 1.8 million on full-fibre broadband. Consider these comparisons, the UK plan is set to start almost where Australia’s was planned to finish.

Unfortunately, we cannot rely on this comparison for a true projection of the project’s potential.

Innovations in technology before 2030

In 2019, the results of the plan would catapult the UK up the list of broadband speeds around the world. However, it’s fails to consider the innovations taking place elsewhere. The plan is set to see fruition in 2030. That’s eleven years of development and improvement. Consider how quickly technology is already moving and you quickly see a flaw in the proposal.

If 1G internet is already a global standard, then those parameters are bound to move by 2030. Already, the cable industry is working towards implementing 10G speeds in the home. The potential that arises from internet this fast is almost unfathomable. Just think of the potential advances in health, transport, finance, security and business.

If Britain is only just catching up to 1G speeds in eleven years, then we’ll undoubtedly still be playing catch-up to more pioneering countries.

The effect of BT Openreach on business

The reality is that free countrywide broadband would have a very limited effect on businesses. The internal network used by companies has to be at the forefront of broadband innovations. The likelihood that 1G speeds would still be useful in a decade’s time is very low. To stay on the frontier, businesses would still need to engage high-speed commercial options.

The biggest change would be marketing channels. Already, most consumers engage with advertising via the internet (instead of cableTV, as once was.) If free broadband is rolled out, then video marketing potential will increase as more consumers will have WiFi speed to support it.

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