Telecoms renationalisation: it’s official, economic liberalism is in decline
Nov 15, 2019 by Martin Sims

Blog

In the UK, the Labour Party’s shock announcement of a part-renationalisation of BT is the strongest sign yet of wider political shifts with major industry implications.

In the second week of the election campaign, the Labour Party has announced that it will nationalise Openreach, the part of BT that owns and operates the country’s telecoms network, and provide free full-fibre broadband for all. Openreach was created 15 years ago by functional separation from BT’s retail arm.

What does that have to with spectrum? Directly, not that much. Openreach does not own mobile licences, though there may be an impact on private companies seeking to provide wireless last-mile services. But as an indication of changing times, it is very significant.

Labour has shifted significantly further to the left since Jeremy Corbyn became the leader in 2015 and has promised to renationalise the train companies, water, energy and the Royal Mail postal service. Few academics or commentators have claimed that these privatisations brought great benefits so while Labour’s plans were opposed by industry and other political parties they were neither unexpected nor unpopular with the public.

But the telecoms industry is different. You could fill a library with academic books and papers detailing the benefits of privatisation. BT was the totemic privatisation of the Thatcher era in the 1980s and became the de facto policy approach in nearly every country. The assumption of many was that Labour would not try to renationalise BT because the benefits for consumers could be easily demonstrated.

Today’s announcement has come as a shock but perhaps it shouldn’t have. Maybe the UK’s self-satisfaction at having led the privatisation field caused us to ignore its failings: lack of broadband in rural areas is an ongoing political concern with little sign of swift action, leaving the country mid-table in many international comparisons. Labour’s perspective is that high-speed internet is now so essential it should be regarded as a public service.

Labour is the challenger in this election and at least 10 points behind the Conservatives in the polls: cynics could argue they can promise anything because they won’t have to carry it out. But this is a very important development. The political hegemony supporting telecoms privatisation has been broken in the country where, for Europeans, it all began.

In the past couple of decades, economic liberals have shifted global opinion, convincing us that public utilities do not necessarily need to be in public ownership. They were particularly successful in late 1990s arguments about the need for an internet free form state interference, but the argument has come full circle. Labour is arguing that broadband is now so vital to modern life that public ownership is necessary to ensure social inclusion.

The potential impact on UK spectrum may be limited at the moment, but the waters in which it swims are important in shaping policy. And the currents in those waters have changed dramatically.•