Want 21st-century socialism? Time to nationalise the Internet

9th August, 2018 10:15 am

The last Labour manifesto talked at length about nationalising key industries such as water, energy and rail. But it only mentioned broadband provision to pledge the universal availability of superfast internet by 2022. If Labour is to truly embrace the idea of 21st-century socialism in our digital age, the Internet is a clear instrument of Labour and broadband provision a key means of production.

Do these factors in and of themselves make it a good industry to nationalise? 9 in 10 homes have access to the internet in 2018, and telecommunications revenue in the UK totalled over £35bn in 2017, so surely the market hasn’t completely failed? 

Ask someone living in rural West Wales how they feel about their internet provision and you’ll likely a hear a different answer. To many, the idea of superfast broadband seems decades away and years overdue. According to Ofcom, “for a significant number of consumers, and in many parts of the country, fixed broadband speeds are slow and mobile coverage is poor or indeed non-existent”. Rural families are more likely to be left behind, with 17% of homes not receiving decent Internet compared to 2% in cities and towns.

If the market sees no need to improve the quality of the internet in an area, it won’t. However, if the state controlled broadband provision as well as infrastructure, we could start to treat it for what it truly is – a vital public service. While the current government has promised that all homes will have decent broadband by 2020, the next Labour government must go further. 

The Internet is not only an important public service, but also a vital tool for economic growth. Ofcom’s data show a clear relationship between Internet investment and economic growth, and an even stronger relationship between increased broadband speeds and economic growth. If Labour wants to ensure an economy that works for the many, and for all kinds of communities, it’s clear that the Internet is crucial. 

How could it be done? Although it is a means of production, I wouldn’t go as far as suggesting it be seized. Nor could it really be feasible to buy out BT, Virgin, Vodafone, TalkTalk, O2, EE, etc. Their huge profits and high share prices show that although the industry could be a profitable one for any future Labour government to get involved in, the idea of buying up these companies does seem beyond the realms of possibility. 

Instead, the government must create its own broadband provider, dedicated to improving connectivity and broadband speeds across the whole UK. This new provider could operate on a not-for-profit basis, providing better value to consumers and ensuring that all monies made went back into the broadband and connectivity infrastructure and the communities that needed the most assistance.

This policy would not be put forward without being met with stern opposition. If the system were fully nationalised, current broadband providers would fight it, fearing loss of profits. And critics would undoubtedly raise concerns over the incentives of a state provider to continually innovate when faced with limited competition. Speaking of competition, a fully nationalised broadband provision would prompt concerns over a state monopoly that could drive up prices for consumers. There would also be concerns over Britain’s internet becoming akin to that of China, with blocked sights, preventing citizens viewing content deemed undesirable by the state. This could be solved by maintaining a strong independent regulator, but the warnings would no doubt ring loudly from those who cry free speech.

All of these concerns can be solved by creating a state-owned internet provider competing with private providers, putting people before profit. A Labour government would put connecting and developing communities ahead of cutting costs by installing copper wire instead of fibre optic cable. In the modern world, we have to see the Internet for what it is – a vital public service.

Matthew Hexter is convener of the Welsh Fabians.

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