So, Labour has pledged that they’ll bring free broadband for everybody by 2030 if elected on the 12th December. They’re re-nationalise parts of BT and take over the infrastructure that’s currently being run by OpenReach. The cost of all of this will be met by taxing the big tech giants such as Apple, Facebook, Google and Amazon.
It’s a lovely idea – the internet has become part and parcel for many of us, and it can be very costly (I won’t reveal how much I pay monthly across my broadband and mobile, but it’s not a pretty sight – but for me, it’s essential for my job, is a hobby, and a method of learning new skills).
- Who pays for the extra capacity required to support every single home and business? This is a HUGE investment. And what about the equipment? Will the UK government stick with using Huawei, or side with the US (and in turn angering the Chinese who have invested substantial sums in UK businesses and infrastructure)?
- Will we see costs associated with services operated by the “big tech” companies increase substantially if they’re taxed heavily? After all, Apple famously defended their $1=£1 conversion by saying, “That’s the cost of us doing business in the UK”. I fully expect the costs of AWS and Google’s Computing Platform to increase for London points of presence (PoPs), which in turn will affect businesses that use cloud computing. Netflix which uses the AWS platform probably serves video content via a local PoP, so their operating costs will increase, which will probably be passed to the consumer. I’d also imagine the likes of Amazon Prime and Prime Video going up too. And what about the UK government itself, which also relies on Big Tech in its day to day operations? Their costs would surely go up as well?
- How does this affect existing ISPs? I’m very happy with Zen which uses G.Fast to deliver 300Mbs down/50Mbs up. That said, it uses the OpenReach infrastructure – there is no alternative. To be free of OpenReach requires changing to Virgin Media. And surely if the UK government takes over OpenReach, you’re just replacing one monopoly with another? Is the UK government competent enough to understand the technical implications of doing so?
Let’s take a look at the UK film and TV industry as an example of what could happen if they ever were found their tax cuts are reduced or even withdrawn (let alone making them pay their tax). US studios would have major hissy fits. This has already happened when Labour were in power:
- During the production of the Harry Potter film series, Gordon Brown (then PM) was forced to introduce better tax cuts for the likes of Warner Bros. due to uncertainty over what would happen to them. Had Brown not done this, Harry Potter’s production would have moved to Eastern Europe. When New Zealand also bulked at reducing tax credits for New Line’s (owned by Warner Bros.) Lord of the Rings – a similar threat was made.
- An email was sent around work to say that this threat was serious enough that it could cause problems of the business if Brown and his chums didn’t capitulate. Now, imagine this being the case if Corbyn pisses off the likes of Microsoft, Google and Amazon. All these companies have employees and offices in the UK.
A better option at this time would be the discussion of the possibility of re-nationalising BT and OpenReach – the implications of doing so (including technical). How will this affect the current employees of BT and OpenReach, their pensions, etc.? What are the alternatives – better regulation?