An even larger monopoly is brewing in UK broadband. It’s obvious it should go to public ownership.

A larger monopoly, or more specifically, a larger oligopoly (where not one but a few companies control the market) is potentially brewing in UK broadband. BT is considering buying Talk Talk, which would increase its market share from 28% to 36%. This would increase the broadband big three’s market share, including Sky and Virgin, to 76% of the market.

Broadband is an essential. Nationalise essentials

Jeremy Corbyn was right in 2019. The lack of competition is part of the reason broadband should be publicly owned and delivered free (or at low cost) to residents. A YouGov poll found three times as many Britons support this policy than disagree with it.

Indeed, BT or British Telecom was in public ownership until the Tories privatised it in 1984. And what’s more, the public purse funded the forerunner to the internet, Arpanet, through the US defence department. The public paid for the development of the internet, then private companies came along and added toll gates to the system of communication.

Corbyn planned to nationalise OpenReach, part of BT, and use it to provide high speed internet to every citizen and business across the country. There is, de facto, a highest quality available internet connection and ways to make that universally accessible. Market ‘competition’ just provides differing worse versions of the service, stifles investment in fiber particularly for rural areas and siphons off cash for shareholders. The ‘rare earth elements’ necessary for high speed full fiber are not actually rare but relatively abundant. At present, 69% of the country has access to full fiber compared to 89% in South Korea.

Profiteering and false competition

The private companies rolling out faster internet already receive large public subsidies. From 2012-2020, these companies received £1.7bn in public funds to invest in providing wider access to Wifi. At the same time, BT alone made a net profit of £1.9bn in 2023.

On top of that, the previous Tory government had a £5bn scheme entitled Project Gigabit aimed at providing a faster and more available service. But this was centred on injecting artificial competition into the market and the lack of organised direction meant that, in the words of former BT chief executive Philip Jansen:

we’ve ended up with hundreds of fibre companies all building in the same places

This is a further reflection of the madness of private competition delivering an essential. It’s akin to rail companies building competing tracks in the same city or town: a waste. Or water companies delivering competing pipe infrastructure. Obviously it makes much more sense for a publicly owned company to operate one system as a monopoly.

Corbyn was right on that one.

Featured image via the Canary