Broadband News

Labour Party Manifesto and what it says on broadband

The Labour Party manifesto launched on the morning of 21st November 2019 and details the plans and ambitions of the Labour Party if they are elected into Government in the General Election on 12th December 2019.

This article concentrates on the broadband aspects of the manifesto and we should highlight that there are many factors that will determine how an individual decides to vote but we are concentrating on the area we know about.

We will deliver full-fibre broadband free to everybody in every home in our country by creating a new public service, boosting the economy, connecting communities and putting money back in your pocket.

Digital and technological advancements bring challenges, but also huge opportunities. In the age of AI and automation, digital connectivity will underpin our future economy. We will need world-class digital infrastructure in which everyone can share.

Labour will deliver free full-fibre broadband to all by 2030.

We will establish British Broadband, with two arms: British Digital Infrastructure (BDI) and the British Broadband Service (BBS). We will bring the broadband-relevant parts of BT into public ownership, with a jobs guarantee for all workers in existing broadband infrastructure and retail broadband work.

BDI will roll out the remaining 90–92% of the full-fibre network, and acquire necessary access rights to existing assets. BBS will coordinate the delivery of free broadband in tranches as the full-fibre network is rolled out, beginning with the communities worst served by existing broadband networks. Taxation of multinationals, including tech giants, will pay for the operating costs of the public full-fibre network. The plan will boost jobs, tackle regional inequality and improve quality of life as part of a mission to connect the country.

The ongoing costs of operating a full-fibre broadband network are significantly lower than for earlier forms of broadband: fibre optic cables are more robust, it is easier to detect faults where they do arise, they are cheaper to replace if they need replacing, and symmetrical bandwidth results in lower operating costs.

The National Infrastructure Commission estimates that a full-fibre broadband rollout will save £5.1bn on operating costs over a thirty year period (‘National Infrastructure Assessment’, July 2018, Figure 1.1), costing just £6.9bn over a thirty year period: around £230m a year (averaging discounted present values). Operating costs are estimated at £579m in cash terms in the ‘Tactis/Prism’ report ‘Costs for Digital Communications Infrastructures’ (2017), which are adjusted for inflation. Staff costs for rolling out the network, as opposed to ongoing costs remaining afterwards, are included in capital expenditure.

There are several reasons why this may lead to an overestimate. First, the Tactis/Prism report estimate assumes no infrastructure re-use (“every piece of infrastructure is considered as ‘yet to be built’”, p51) when infrastructure re-use will occur as part of British Broadband’s roll-out. Second, most estimates are predicated on competitive market models, which Labour will not adopt. Nevertheless we have allowed a further £1,200m in 2023-24 in addition to the (inflation-adjusted) £579m to err on the side of caution.

Broadband extracts from Labour Party Manifesto

We had hoped for more detail in the manifesto and while there is some clarification on costs, the key elements missing are confirmation of the speed that will be provided for free i.e. 100 Mbps, 1000 Mbps or 10,000 Mbps and confirmation that the service will have unlimited usage. Other elements include what will happen to the voice network, i.e. will the broadband be free but if you want a phone to plug in and make voice calls the costs will wipe out the savings from free broadband. Though if you have full fibre the easiest thing to do is subscribe to a VoIP provider.

We have spotted that the service is going to be symmetric, which means a big change for the existing Openreach FTTP network planning rules on capacity. GPON FTTP can deliver symmetric speeds but Openreach does not do so at present to avoid a single Gigabit customer using lots of bandwidth from impacting on others ability to upload data.

In the original interviews around the free fibre broadband there was talk of free broadband for business and that may still be the case but the manifesto does not appear to explicitly state this.

There is no talk of how the Labour Party will hand any collapse in an industry that employs 180,000 people across the UK, while Openreach and is 32,000 employees and parts of BT Group that are nationalised look safe, the only talk of other operators is acquiring rights to existing assets which we understand to mean the existing full fibre networks that have been built. Putting this into plain English we believe Virgin Media will get compensated for handing over rights to the 400,000 or so premises FTTP network it has but nothing more when it struggles to compete with a free service.

Operating a patch work network as anyone who has attempted this at scale will attest to is not ideal and eventually its likely that the mixture of point to point and GPON architectures and different hardware manufacturers used will be rationalised so that the esoteric choice of one community provider that BDI obtains access rights to does not lead to increased support costs as the years progress.

The costs analysis does give a little more detail but it seems clear that the existing Openreach pay roll of 32,000 people with a salary bill per year in excess of £672 million is going to be a lot smaller once the network has been fully built. If the mean salary is just £21,000 per year then £230m pays for just 10,952 staff to maintain a FTTP network serving over 30 million premises, add new build homes to the network each year and all the other functions of a broadband ISP. Also the small element of retaining enough customer service staff to support the public i.e. full fibre may be more reliable but people will still have outages as we see already or problems with routers breaking and a myriad of other things. So can an ISP deliver and support 30 million households with a staff of under 11,000. Our sums of course don't include the costs of maintaining a vehicle fleet, training, pensions and the numerous other costs that arise from employing staff.

Free full fibre broadband for every household without fail is obviously a popular policy, since who does not like something for free but the policy does raise lots of questions that no-one has the answer to yet and while it may boost some sectors of the economy it seems guaranteed to impact the broadband industry and cause job losses. Also if everyone has reliable ultrafast broadband how will the high street fare, the trend for click and collect stories would most likely increase making it harder for existing stores both large and small to justify a large high street presence.

Comments

Page 21 of the National Infrastructure Investment estimates £33.4bn to build and maintain a full fibre network. The combined build and operational budget above is £230m/y + £579m/year = £24bn over 30 years.

  • prs24
  • 18 days ago

Yes aware of what NIC has said.

Maintaining the network is very different to running an end to end service for 30 million households. Hence the question marks on how many staff BDI and BBS will have once the network is built.

Building in a shorter time frame can actually be more expensive i.e. you cannot always simply compress a 30 year time frame into 10 years and not expect some costs to rise e.g. larger vehicle fleet as more people are working in more locations at the same time.

  • andrew
  • thinkbroadband staff
  • 18 days ago

Andrew

I can't find the last 3 paragraphs from "The ongoing costs...." in the Manifesto. Is this from the Funding document that I haven't managed to read yet. ( My Eyes need a rest after reading Labour, Green, Plaid already!)

  • jumpmum
  • 18 days ago

I'm not sure that what they say at the end of paragraph 6: "symmetrical bandwidth results in lower operating costs" really means a symmetric service to the end user. Maybe they just mean full fibre doesn't have the support issues that ADSL and VDSL have. It's doubtful if the manifesto author(s) have much of a clue about how GPON actually works.

  • gpc1
  • 17 days ago

Has Diane Abbott done the figures for this manifesto? Probably way off.

  • r7slayer
  • 11 days ago

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