I was a signatory to this letter from a majority of the members of the Council of the Progressive Economy Forum in the Guardian:
We write to support the proposal from the Labour party for a public programme to provide rapid internet service to the entire population (Broadband ‘communism'? They said that about the NHS, Journal, 19 November). This project would have a high social and economic rate of return, especially at current borrowing rates.
Since it would be socially profitable, the objection that the proposal is an election “giveaway” should not be taken seriously — that is not an objection raised for other infrastructure projects such as airports and motorways.
Arguments from self-interested corporations that a public sector programme would discourage private sector investment should be seen as unfounded special pleading. This pleading also ignores the fact that this network would create many more opportunities for web content providers to profit in a space where something approaching a real market operates, and is, therefore, decidedly selective in its view. Finally, to claim that this is an activity more appropriate for the private sector is a political assertion that fails to take account of the manifest failure of private companies to provide a broadband network accessible to all.
Patrick Allen Chair, Progressive Economy Forum, John Weeks Emeritus professor of Development Economics, Soas, Ha-Joon Chang University reader in the political economy of development, Cambridge University, Danny Dorling Halford Mackinder professor of geography, Oxford University, Susan Himmelweit Emeritus professor of economics, Open University, Will Hutton Principal of Hertford College, Oxford University, Johnna Montgomerie Reader in international political economy, King's College London, Richard Murphy Professor of political economy, City, University of London, Guy Standing Professorial research associate, Soas, Sue Konzelmann Reader in management, Birkbeck, University of London, Stephany Griffith-Jones Financial markets director at the Initiative for Policy Dialogue, Columbia University, Daniela Gabor Professor of economics and macrofinance, University of the West of England, Natalya Naqvi Assistant professor in international political economy, LSE
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That socked it to ’em!
Self interested luddites that the corporations are.
The point is that we should try something new – I mean after 2008 – why the hell not? The current mode of capitalism has done nothing to repair the damage – nothing at all for ordinary people.
I was dicussing this subject the other day with someone who has been involved in the telecoms industry who made the point that BT couldn’t roll out full network systems profitably…
QED. Private sector money is too expensive to do the job and that’s why we have an incomplete and inadequate broadband network. With overlap in areas of lucrative demand. But apparently to achieve this by national government provisions is a really bad idea…???? Why ?
The object of the exercise (the real terms profit) is the communication network available to all (increasingly required to contact our own government agencies such as DWP and HMRC to name but two examples). This has been an object lesson (or should have been) in precisely why the private sector is not able (even if willing) to provide network infrastructure.
If there are capacity handling issues associated with, for example, live streaming of entertainment then a market pricing mechanism may be necessary to limit extravagant service user access. But we need the network system in place (or committed to) before that issue needs to be addressed.
Not having tv or a landine, i don’t have broadband. I also don’t have online financial access, and no idea how much streaming services currently cost, or what taxation they attract. Perhaps VAT on streaming service usage over a certain level would be an appropriate method to curb excessive usage (that’s if it’s not currently part of the cost)?
Wh6 do we want to ration broad band usage?
“Why do we want to ration broad band usage?”
I don’t think we do. But like building new roads I can imagine traffic flow would grow to fill the space, as it were.
I imagine there might be capacity constraints…. (?) Maybe there wouldn’t need to be.
Why is this considered to be any different to any other infrastructure project? Start-ups and e-business cannot function without good broadband, disadvantaging provincial towns and concentrating business opportunities in big cities, increasing the “brain drain”, the need to commute (which obviously needs to be discouraged for environmental reasons), and increasing a London centric view.
If one had to choose between HS2 and broadband communism, I know which I’d choose.
Whilst I’m broadly in agreement with all the above, there is a pretty good outfit in Lancashire that seems to have got the rural broadband infrastructure right – independently and all on its own!
https://b4rn.org.uk/
So perhaps Open Reach might not be required?
A government payment to make supply free to the consumer doesn’t, after all, require a state supplier. It just requires the state to be a ‘rigorous’ buyer.
Local possibility does not prove national replicability
Backaul by BT…..
Indeed not.
But it does suggest that Open Reach are simply just the largest outfit and quite probably not at the leading edge of their trade.
True
Openreach have little incentive….they install the lines and then have to provide use of them to others, for very little profit. And they also provide repair and maintenance of them too, again for little profit. Not surprising that industries pay a higher price.
JohnM says:
“Openreach have little incentive….they install the lines and then have to provide use of them to others, for very little profit. And they also provide repair and maintenance of them too, again for little profit.”
So a perfect candidate for nationalisation. For the country to function we need this infrastructure. Having it and maintaining it is an overhead cost for society. But it offers real benefits for commercial entities aswell as the general public (and government which would grind to a halt without it) The additional overhead cost of generating profit for the company is in effect a private sector tax on all of us siphoning and redistributing income from everyone to……… the money lenders who charge far more than is a current going-rate reflecting the current ‘price of money’. Would a business keep over-paying its supply contractors or would it bring the operation in-house ?
In short the system we live with is a rip-off. As it has been ever since privatisation. The Thatcherite mantra was that we needed private sector money to be able to invest in bringing the system up to date.
Well it didn’t work did it….the system is not up to date. BT was privatised in 1984 – that’s 35 years ago – that’s a long time to persist with an experiment which is not doing the business for us.
Have there really been any benefits from private sector managerial competence ? That was the other Thatcherite argument for privatisation; that we needed private sector business acumen to create leaner fitter service provision. Is that we’ve got for our money? I don’t see it.
No money in fibre-to-the-home….not small scale. Towns and cities is where the money is.
Extensive work to install rural fibre ain’t going to happen fast. And backhaul will still be by BT/Openreach/cable. Don’t forget, 5G is starting, and that will use a lot of bandwidth, and money.
JohnM says:
“No money in fibre-to-the-home….not small scale. Towns and cities is where the money is.
Extensive work to install rural fibre ain’t going to happen fast.”
Exactly so. This points up the difference in objectives and priorities as compared with for example Royal Mail delivery…. How might that have been established under current market principles ?
The fact remains that networks expand exponentially. One phone is no use at all. Two phones are considerably more useful than one :-)…. and three even more so. The network must include everybody if it is to maximise it’s utility. You cannot operate an orchard just on the basis of picking the low hanging fruit.
The object of the exercise is (well should be) to produce a national communication network not a money mill.