Nationalising BT may not improve Britain’s broadband

IN 1990 BRITISH TELECOM (BT), a former state-owned monopoly, was in the early stages of upgrading its copper wires to fibre-optic cables. Its plans were scotched by the Conservative government of the day, worried that it would damage the competitiveness of other firms in Britain’s newly liberalised telecoms markets. Three decades on, broadband is once again a hot-button election issue. The opposition Labour Party wants parts of BT to be renationalised—and a full fibre-optic upgrade to be completed. British Broadband, as the new entity would be called, could then offer free connectivity to every citizen and firm.

Labour thinks state control could lift Britain in global fibre-optic rankings. The OECD, a rich-country club, puts it 35th out of 37 countries in its use of the technology, which allows far higher speeds than copper wires (see chart 1). The government has already pencilled in £5bn ($6.5bn) to raise fibre’s share of broadband.

On top of nationalisation, Labour wants to boost this pot to £20bn and to maintain the new network via a tax on technology firms that furnish services over it. Nationalised industries are not always inefficient, Labour says. Jeremy Corbyn, its leader, has compared the project to the National Health Service, which achieves passable results while spending less per person than most other rich-...

via Business Feeds

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