Free, nationalised broadband

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lpm
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Free, nationalised broadband

Post by lpm » Thu Nov 14, 2019 10:54 pm

Nationalising BT Openreach is... problematic. Building fibre optic cabling to millions of homes is a challenging business task. Would civil servants manage better than private companies, particularly with government interference? No. This is where capitalism excels - driving down the cost per home from £800 to £799 makes profit.

But that's nothing to the policy of free broadband. Which is utterly disastrous.

Private companies are investing billions in 5G, fibre and other services. It's a highly competitive but strongly regulated market. Sky will undercut BT, Virgin will invest to offer faster speed, TalkTalk will go cheap and cheerful, Vodafone will try public wi-fi, alt-nets will build networks speculatively.

That investment never happens with a free competitor. The service never improves. Speeds stagnate. Innovation vanishes. "Free" is a powerful concept that can have huge side effects.

Labour can't grasp simple issues.
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Re: Free, nationalised broadband

Post by lpm » Thu Nov 14, 2019 11:43 pm

Basic numbers:

Cost to buy Openreach £12 billion

Cost of fibre build to a home about £1,000 (rural more, urban less)

Cost of build out something like £30 billion

Running costs per annum about £4 billion

Available labour force to dig roads, wire cabinets, connect homes: near zero. There is about to be a massive shortfall of resources with the electric car recharging network colliding with the fibre rollout, plus the switch to low carbon, gas to electric, build of new generating turbines/solar/Hinckley, need for more nurses - against a backdrop of driving immigrants out.
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Re: Free, nationalised broadband

Post by Boustrophedon » Fri Nov 15, 2019 7:43 am

But fibre broadband into your home is a de facto structural monopoly, like the leccy and the gas and the railways. I don't get a choice as a consumer as to who fits the cable (unless you want ten different companies digging up the road, one after the other.) and is thus totally different to mobile broadband, so of course it should be nationalised. Just like the clusterf.ck that is the railways should be.

The free market only works where there can be a fee market.
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Re: Free, nationalised broadband

Post by bjn » Fri Nov 15, 2019 9:08 am

The original model for Australia’s National Broadbands Network would be best. A single monopoly rolling out infrastructure nationwide that other folk can layer services on.

Either a super heavily regulated private company or a state owned corp of some form would do the trick.

That didn’t happen in Oz because it threatened incumbent monopolies. Basically Rupert didn’t want competition for his cable channels.

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Re: Free, nationalised broadband

Post by lpm » Fri Nov 15, 2019 10:04 am

It's unusual to see the assertion that "The free market only works where there can be a free market". Most people think free markets work when effectively regulated. You do get some extremist libertarians, of course, but whenever they give examples of working free markets they are always actually regulated in some form or other.

UK telecoms is one of the most heavily regulated markets in the world. BT is controlled, private assets have to be shared, prices are regulated, standards must be met and a huge number of rules have to be followed. As a result, Ofcom has created a highly competitive market place, with multiple choices for broadband, phone, mobile and TV. There is not a monopoly when a regulator prevents a structural monopoly being exploited.

This is not like the existing railway network. This is like the building out of the railways. Private companies are investing billions with various different strategies to bring fibre to the home, struggling with the management problem of getting it done in a cost-minimising way. Why would a government do that better? A single company with a single vision?

Where's the problem? Labour seems to think there's something that needs addressing, but what? Currently there are the following investing billions of private money in the UK fibre rollout, each with their own ideas and approaches and strategies:

Big players:
  • Openreach - 15 million homes by 2025, mostly urban areas

    Virgin Media - 0.5 million homes a year at the moment, expanding out existing network, all urban

    Liberty Fibre - new consortium looking to raise money, either building alone or with Virgin Media

    Hyperoptic - 5 million by 2025, specialising in Multi Dwelling Units (i.e. blocks of flats)

    Cityfibre - 1 million by 2021, building for Vodafone and Sky, focused on fibre to business, now fibre to home with Vodafone partnership

    FibreNation - TalkTalk partnership, ambitions for 3 million but not doing much on the ground

    Gigaclear - 0.5 million ambition, specialising in rural areas, building now but slower than promised
Regionals and specialists:
  • Open Fibre - new build specialists, working with house builders to install fibre on day one

    KCOM - Hull area, already majority fibre, now finishing off their entire network of 0.2 million

    Truespeed - South West, has raised funding

    WightFibre - aiming to complete the island by 2022

    B4RN - Broadband for the Rural North, local communities with a shared ownership structure where customers are owners and volunteers

    Community Fibre - London, working with borough councils, ambition of 1 million by 2025

    County Broadband - fixed wireless strategy in East Anglia
And others like:
  • Ask4
    BitStreme
    Call Flow Solutions
    Cybermoor
    Exascale
    F&W Networks
    Fibre Options
    Fibrus
    G.Networks
    Grain
    Grain Connect
    ITS Technology
    Jurassic Fibre
    Relish
    Telcom and Optic Networks
    toob
    Vision Fibre Media
    VXFIBRE
    Wessex Internet
    Zzoomm
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Re: Free, nationalised broadband

Post by TopBadger » Fri Nov 15, 2019 11:15 am

lpm wrote:
Fri Nov 15, 2019 10:04 am
It's unusual to see the assertion that "The free market only works where there can be a free market".
Actually Don wrote:
Boustrophedon wrote:
Fri Nov 15, 2019 7:43 am

The free market only works where there can be a fee market.
I.e. when there is a choice about who to pay for the service. I think Don's point is that a choice doesn't meaningfully exist for fibre - it's become a utility.
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Re: Free, nationalised broadband

Post by MartinDurkin » Fri Nov 15, 2019 11:22 am

Maybe we could access EU funding for rollout of broadband to rural "white spot" areas. Oh!

I have worked on EU funded projects in Poland, Portugal, Slovenia and Croatia in recent years with these guys.
https://ec.europa.eu/digital-single-mar ... dband-fund

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Re: Free, nationalised broadband

Post by plodder » Fri Nov 15, 2019 11:36 am

This announcement is problematic for a couple of reasons.

Firstly, it's knocked the worst A&E waiting times on record off the front pages within a couple of hours.

Secondly, it's poorly thought through. Lpm makes valid points about the value of nationalising something that appears to work pretty well.

Thirdly, free broadband for all? Why? Monkey tennis?

Fourth, and this is more strategic, which elements of UK infrastructure would deliver the most bang for the buck? That's where the money should be spent. The ability to download p.rn in hd in a mobile phone in Stornoway might not be as useful as building new cycle lanes in Manchester, for example.

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Re: Free, nationalised broadband

Post by dyqik » Fri Nov 15, 2019 12:03 pm

plodder wrote:
Fri Nov 15, 2019 11:36 am

Thirdly, free broadband for all? Why? Monkey tennis?
Free roads for all? Why? Monkey Tennis on tour?

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Re: Free, nationalised broadband

Post by lpm » Fri Nov 15, 2019 12:34 pm

I think you'll find road usage is not free. The more miles you drive on them, the more you pay. That's been my experience anyway. People are happy to pay a lot each month to drive on roads and people are happy to pay £30 a month for broadband. Why stop them?

I think it's obvious to all, except the Labour leadership, that paid-for services can't compete with free services? If hairdressers offering free services opens next to your saloon, you're going bust.

Free broadband will save every household £30 a month. It will also mean zero private investment by Virgin, Liberty, Sky, TalkTalk, Vodafone, KCOM and all the others - with some of these companies going bust and their networks sold off cheap. There will be a monopoly supplier and if they give terrible customer service or have high fault rates you won't be able to choose an alternative.

Why not just give every household an extra £30 a month directly? Or - and here's the seed of a good idea - why not give poor households an extra £30 a month but give nothing to rich households?
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Re: Free, nationalised broadband

Post by dyqik » Fri Nov 15, 2019 12:38 pm

lpm wrote:
Fri Nov 15, 2019 12:34 pm
I think you'll find road usage is not free. The more miles you drive on them, the more you pay. That's been my experience anyway. People are happy to pay a lot each month to drive on roads and people are happy to pay £30 a month for broadband. Why stop them?
I think you'll find that broadband usage wouldn't be free either. You'll need computers capable of using the bandwidth, and you'll have to pay to access the services that use most of the bandwidth.

People who don't own cars or buy fuel still use the roads. For goods to be delivered to the shops they visit, for cycling, walking and to ride buses on, for the economic activities that generate tax revenue that provides services.

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Re: Free, nationalised broadband

Post by Vertigowooyay » Fri Nov 15, 2019 12:47 pm

Surely an alternative to nationalising part of the communications network is working with the current one to acheive a better result of national broadband?
  • Government incentives for private companies to connect rural areas
  • Once connected to a supplier (you had to pay to have your phoneline connected in old BT days) there is an option for a zero tariff service of a minimum bandwidth. This would have to be decided as the lowest beneficial service, but let's say 10mbps for the sake of argument. Tariff packages start when a customer wants a bigger service, from 20mbps up to whatever the highest a provider has. Government subsidises the zero tariff option.
This must be cheaper than buying infrastructure, creating more infrastructure and tying people into one supplier? I'm sure IABMCTT but as a base, would this work?
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Re: Free, nationalised broadband

Post by lpm » Fri Nov 15, 2019 12:51 pm

dyqik wrote:
Fri Nov 15, 2019 12:38 pm
lpm wrote:
Fri Nov 15, 2019 12:34 pm
I think you'll find road usage is not free. The more miles you drive on them, the more you pay. That's been my experience anyway. People are happy to pay a lot each month to drive on roads and people are happy to pay £30 a month for broadband. Why stop them?
I think you'll find that broadband usage wouldn't be free either. You'll need computers capable of using the bandwidth, and you'll have to pay to access the services that use most of the bandwidth.

People who don't own cars or buy fuel still use the roads. For goods to be delivered to the shops they visit, for cycling, walking and to ride buses on, for the economic activities that generate tax revenue that provides services.
"I think you'll find that electricity wouldn't be free either. You'll need fridges and TVs capable of using the electricity, and you'll have to pay for the lightbulbs and heaters that use most of the bandwidth.

People who don't have electrical goods or buy electricity still use the electricity. For goods to be delivered to the shops they visit, for cycling, walking and to ride buses on, for the economic activities that generate tax revenue that provides services."
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Re: Free, nationalised broadband

Post by dyqik » Fri Nov 15, 2019 12:53 pm

lpm wrote:
Fri Nov 15, 2019 12:51 pm
dyqik wrote:
Fri Nov 15, 2019 12:38 pm
lpm wrote:
Fri Nov 15, 2019 12:34 pm
I think you'll find road usage is not free. The more miles you drive on them, the more you pay. That's been my experience anyway. People are happy to pay a lot each month to drive on roads and people are happy to pay £30 a month for broadband. Why stop them?
I think you'll find that broadband usage wouldn't be free either. You'll need computers capable of using the bandwidth, and you'll have to pay to access the services that use most of the bandwidth.

People who don't own cars or buy fuel still use the roads. For goods to be delivered to the shops they visit, for cycling, walking and to ride buses on, for the economic activities that generate tax revenue that provides services.
"I think you'll find that electricity wouldn't be free either. You'll need fridges and TVs capable of using the electricity, and you'll have to pay for the lightbulbs and heaters that use most of the bandwidth.

People who don't have electrical goods or buy electricity still use the electricity. For goods to be delivered to the shops they visit, for cycling, walking and to ride buses on, for the economic activities that generate tax revenue that provides services."
Do people pay subscriptions for electrical connections to their houses?

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Re: Free, nationalised broadband

Post by dyqik » Fri Nov 15, 2019 1:05 pm

The argument I was hoping that you could get to by yourself is that, much like roads and connection to the electricity grid, the universal availability of broadband is something that can act as an assumption in developing new economic activity, and in reduction the cost of government services. The fact that roads go to all* houses means that postal services work reliably, and can be relied on by business and government. That all* houses have a broadband connection allows services to be developed with that as an assumption. In particular, good internet connections to remote areas lessens the impacts of distance over the road network and also reduces the need to use the road network (and to emit CO2) for working.

I don't know that the extra economic activity generated and other costs reduced justifies the cost of this idea, but it will reduce the costs and introduce some new opportunities, as well making some decisions that have already been made with better and more fairly (e.g. the online requirements for unemployment support).

*In that those living without these are overwhelmingly likely to have chosen that, rather than not be able to get a house with that service at a reasonable price.

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Re: Free, nationalised broadband

Post by lpm » Fri Nov 15, 2019 1:10 pm

None of that requires broadband to be free.

It's making it free that destroys exactly what you are aiming for. It prevents the development of the network and prevents innovative new ways of creating the network.
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Re: Free, nationalised broadband

Post by lpm » Fri Nov 15, 2019 1:14 pm

dyqik wrote:
Fri Nov 15, 2019 12:53 pm
Do people pay subscriptions for electrical connections to their houses?
Yes. It's part of the bill. In the UK, we pay flat fees for electricity/gas connection.

These things aren't zero cost to the provider, and making costly things free to consumers is always a dangerous economic mismatch.
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Re: Free, nationalised broadband

Post by dyqik » Fri Nov 15, 2019 1:22 pm

lpm wrote:
Fri Nov 15, 2019 1:14 pm
dyqik wrote:
Fri Nov 15, 2019 12:53 pm
Do people pay subscriptions for electrical connections to their houses?
Yes. It's part of the bill. In the UK, we pay flat fees for electricity/gas connection.
I don't think I paid one in the UK, either when on a key meter or on a bill. It was always part of the unit costs.

Anyway, there's a point here that broadband largely works on the opposite billing model to electricity, with a large flat access fee, and a small or zero fee per usage, compared to a small access fee and large fee per usage.
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Re: Free, nationalised broadband

Post by username » Fri Nov 15, 2019 1:24 pm

lpm wrote:
Fri Nov 15, 2019 1:10 pm
None of that requires broadband to be free.

It's making it free that destroys exactly what you are aiming for. It prevents the development of the network and prevents innovative new ways of creating the network.
There is a chance that other networks will respond to the (possibly/probably) less good aspects of GovBand and provide directly charged broadband with better quality of service. UK.GOV is probably not going to be able to monopolize all of the broadband options (though I agree that even for fibre it is probably a Bad Idea).
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Re: Free, nationalised broadband

Post by lpm » Fri Nov 15, 2019 1:31 pm

There are some tariffs where the standing charge is replaced by higher unit costs, which are attractive to holiday home owners and the like. Evidence of a regulated competitive market - people can shop around, switch providers, match what they pay to what they need.
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Re: Free, nationalised broadband

Post by dyqik » Fri Nov 15, 2019 1:32 pm

lpm wrote:
Fri Nov 15, 2019 1:10 pm
None of that requires broadband to be free.

It's making it free that destroys exactly what you are aiming for. It prevents the development of the network and prevents innovative new ways of creating the network.
No, probably not.

However, it clearly requires government intervention to get broadband into more areas and to make it universal.

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Re: Free, nationalised broadband

Post by TopBadger » Fri Nov 15, 2019 1:37 pm

Taking critical infrastructure into public ownership - I get. I can see howthe internet falls into this alongside utilities.

But making broadband free - seriously? Makes Labour look like a bunch of commie knob heads.
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Re: Free, nationalised broadband

Post by dyqik » Fri Nov 15, 2019 1:38 pm

lpm wrote:
Fri Nov 15, 2019 1:31 pm
There are some tariffs where the standing charge is replaced by higher unit costs, which are attractive to holiday home owners and the like. Evidence of a regulated competitive market - people can shop around, switch providers, match what they pay to what they need.
There's a key difference between broadband and electricity, which is that the cost to the broadband company of providing access capable of a large amount of potential throughput to a consumer is high relative to the cost of the consumer actually using that capacity. With broadband, the broadband supplier is not supplying the data that is downloaded, that's paid for from a different supplier. The backbone data transmission is largely paid for by the data supplier as well. With electricity, the network access charges and the generation charges are paid to the same company. There are per unit transmission charges on my US electrical bill as well.

What this free broadband proposal is closest to in the electricity utility world is the government paying the standing charges, and some portion of the transmission charges.

I suspect the road analogy might be a bit closer to the broadband situation, in lots of ways. Not least because that has the concept of traffic, which is pretty critical to capacity and usage, where the consumer facing electricity supply network doesn't usually run close to capacity, and isn't expected to grow in the same way that internet traffic is.

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Re: Free, nationalised broadband

Post by lpm » Fri Nov 15, 2019 1:52 pm

dyqik wrote:
Fri Nov 15, 2019 1:32 pm
lpm wrote:
Fri Nov 15, 2019 1:10 pm
None of that requires broadband to be free.

It's making it free that destroys exactly what you are aiming for. It prevents the development of the network and prevents innovative new ways of creating the network.
No, probably not.

However, it clearly requires government intervention to get broadband into more areas and to make it universal.
Like the government incentives for private companies to connect rural areas that already exist, but more so?

Like the Scottish government is doing?

Labour's extreme position is weird because the UK is poised for a big surge in fibre builds. This announcement has already damaged this. All a decent rollout really needs is:
  • Bit of subsidy (e.g. remove business rates on fibre networks)
    Bit of blasting through red tape (force local councils to make digging up pavements easier)
    Bit of mapping services (Openreach doesn't have proper maps of existing poles and ducts)
    Bit of extra rights (landlords required to give access to blocks of flats)
    Big chunk of subsidy for rural areas
Plus Labour is unable to illustrate any problem arising from the relatively low rollout to date. Average speeds might be lower than our EU competitors, but the UK digital sector is stronger - higher levels of internet shopping, more Netflix subscriptions, higher growth in data consumption, one of the cheapest basic broadband only price, average broadband/TV/phone package pricing (though expensive premium TV, i.e. Sky Sports).
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Re: Free, nationalised broadband

Post by dyqik » Fri Nov 15, 2019 1:58 pm

lpm wrote:
Fri Nov 15, 2019 1:52 pm
dyqik wrote:
Fri Nov 15, 2019 1:32 pm
lpm wrote:
Fri Nov 15, 2019 1:10 pm
None of that requires broadband to be free.

It's making it free that destroys exactly what you are aiming for. It prevents the development of the network and prevents innovative new ways of creating the network.
No, probably not.

However, it clearly requires government intervention to get broadband into more areas and to make it universal.
Like the government incentives for private companies to connect rural areas that already exist, but more so?

Like the Scottish government is doing?

Labour's extreme position is weird because the UK is poised for a big surge in fibre builds. This announcement has already damaged this. All a decent rollout really needs is:
  • Bit of subsidy (e.g. remove business rates on fibre networks)
    Bit of blasting through red tape (force local councils to make digging up pavements easier)
    Bit of mapping services (Openreach doesn't have proper maps of existing poles and ducts)
    Bit of extra rights (landlords required to give access to blocks of flats)
    Big chunk of subsidy for rural areas
Plus Labour is unable to illustrate any problem arising from the relatively low rollout to date. Average speeds might be lower than our EU competitors, but the UK digital sector is stronger - higher levels of internet shopping, more Netflix subscriptions, higher growth in data consumption, one of the cheapest basic broadband only price, average broadband/TV/phone package pricing (though expensive premium TV, i.e. Sky Sports).
It may need a "Public Option", in the sense of the soft form of Medicare For All, rather than just more incentives. Although one kind of merges into the other as you make the incentives more specific. And of course, that would likely be contracted out for actual implementation to same people that the private companies contract out to.

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