Telco stocks reeling as Labour promises ‘free broadband’ in nationalisation plan

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Shares in telecoms firms, including BT, have tanked after the Labour Party announced plans to re-nationalise parts of the company.

Fast and free 

Labour set out plans to deliver a fast and free full fibre-broadband for the nation by bringing parts of BT into public ownership and creating a new British Broadband public service.

Labour leader Jeremy Corbyn made the announcement in Lancaster, describing the new free public service as central to Labour’s plans to transform our country and economy, “bringing communities together in an inclusive and connected society.”

BT’s shares fell more than 2% in early trading as did TalkTalk, which also reported a strong set of half year profits.

“A new public service delivering the fastest broadband free to everyone is at the heart of Labour’s plans to transform the future of our economy and society,” Corbyn said.

“The internet has become such a central part of our lives. It opens up opportunities for work, creativity, entertainment and friendship. What was once a luxury is now an essential utility."

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“That’s why full-fibre broadband must be a public service, bringing communities together, with equal access, in an inclusive and connected society.

“It’s time to make the very fastest full-fibre broadband free to everybody, in every home in every corner of our country. Making it free and available to all will open up opportunities for everybody, at the cutting edge of social and economic change.

“By creating British Broadband as a public service, we will lead the world in using public investment to transform our country, reduce people’s monthly bills, boost our economy and improve people’s quality of life.”

Election promise 

Labour said that if it wins the upcoming general election it will undertake a massive upgrade in the UK’s internet infrastructure, delivering fast, secure, reliable internet connections for everyone and putting an end to patchy and slow coverage. 

This, it said, will boost 5G connectivity across the country.

“The roll out will begin with communities that have the worst broadband access, including rural and remote communities and some inner city areas, followed by towns and smaller centres, and then by areas that are currently well-served by super-fast or ultrafast broadband.”

Taxing tech giants

The plan will be paid for through Labour’s Green Transformation fund and taxing multinational corporations such as Amazon, Facebook and Google, and save the average person £30.30 a month.

Only 8-10% of premises in the UK are connected to full-fibre broadband, Labour claimed, compared to 97% in Japan and 98% in South Korea. 

Almost 80% of adults surveyed said that they have experienced internet reliability problems in the last year.

According to research by the Centre for Economics and Business Research, a full-fibre broadband network could boost productivity by £59 billion by 2025; bring half a million people back into the workforce; and boost rural economies, with an estimated 270,000 people more able to move to rural areas.

End of commuting  

The party’s plans could result in 300 million fewer commuting trips, three billion fewer kilometres travelled by car, and 360,000 tonnes fewer carbon dioxide emissions.

The Labour Party also announced plans for a new Charter of Digital Rights – the strongest protection of data and online rights ever enacted. We will consult on its contents, which could include:

Powers for individuals and collectives to challenge algorithmic injustice (where online algorithms cause disproportionate harms to particular groups);

Powers for individuals and collectives to prevent the use of digital infrastructure for surveillance;

Rights for individuals to protect access to and ownership of their data.

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