The report authors would like to thank Miranda Hall and Sara Mahmoud; this report builds on the principals and policies of Full Fibre Future (2019), of which Hall and Mahmoud were co-authors.
The global spread of Covid-19 has shone a bright spotlight on both the vital need for reliable high-speed internet and the inadequacies of the for-profit, corporate model in delivering it. This paper, the first of four modules on democratic public ownership in the UK and US, explores the future of digital infrastructure: the core assets and services upon which the 21st century economy and its vast array of information technologies rely. To accelerate and democratise digital infrastructure development, new approaches to ownership and control are vital.
While there are important differences explored in this paper between experiences in the US and the UK, both share at least one important common thread: a market-led approach to digital infrastructure development predominantly undertaken by, and to the benefit of, an oligopolistic set of for-profit corporations. This, in turn, has created shared problems, from prioritising shareholder returns over investing in vital infrastructures, to undemocratic ownership and governance of essential services and digital redlining as companies cherry pick provision, excluding poorer areas and marginalised groups.
The result: the UK is ranked 35th out of 37 countries assessed by the OECD for the proportion of fibre connections in its total fixed broadband infrastructure, and only 13% of households have full-fibre connection. In the US, 21.3 million people do not have access to the minimum speed broadband connection while approximately 133 million people - nearly half the country - do not have access to a connection with speeds of at least 250Mbps. In both countries, sharp digital divides in access and quality of connection have been exposed by the coronavirus lockdown.
We need to build a digital landscape that provides world-class connection to all, is sustainable, privacy-enhancing, rights-preserving, innovative and democratic by design. The economic and environmental benefits of such a transformation - from a £63 billion boost to gross value added by 2030 in the UK, and 360,000 tonnes fewer of carbon dioxide emitted as a result of better home working - are extraordinary. In order to secure these benefits, we make the case for democratic public ownership of the foundational digital infrastructures of the 21st century must be rooted in the following key goals and principles:
To secure these goals, we therefore propose moving in the direction of treating digital connectivity as a right and organising digital infrastructure – including the wireless spectrum, cloud infrastructure, and the rollout and maintenance of fibre optic connections and 5G – as a vital 21st century public good, underpinned by democratic ownership and governance. What follows are a series of policy recommendations for the UK and US retrospectively to those ends.
The UK government’s own analysis suggests a monopoly provider would deliver a nationwide full-fibre network faster and at significantly lower cost than via "enhanced competition" among an oligopoly of private companies. To that end, a new public infrastructure company should be created tasked with rolling out a 100% full-fibre network by 2030, based on taking Openreach (and the parts of BT Group relevant to rolling out the core network) into public ownership. A mission to connect the nation should be central to a post-covid recovery that is prosperous and just, with a ‘retrofitting revolution’ building a 21st century digital infrastructure. A portion of funding for investment could come from charging private ISP providers for access to the network, just as Openreach currently does. Rather than paying dividends, the company should reinvest profits back into rolling out the network. BT Group has paid out over £53bn in dividends since privatisation, and over the past decade has seen its fixed investment and R&D spending fall as shareholder payouts have risen. This logic should be reversed; indeed,the annual savings from eliminating dividends could alone cover over 16% of the Capex required to deliver full-fibre over 10 years. The cost of public borrowing for investment is notably lower than for private companies, and is at near-record lows; to finance the remaining Capex requirements, the public infrastructure company should take advantage, borrowing to invest. Just as Gladstone nationalised the telegraph industry and Asquith took the telephone sector into public ownership, to ensure universal coverage and access, so democratic public ownership can build a foundational 21st century digital infrastructure more affordably, equitably, and speedily than the alternatives.
Internet access should be organised as a 21st century human right, recognising it is now foundational to our ability to lead a fulfilling life in the digital age: to connect, communicate, play and work. The effects of coronavirus - where a digital divide over access to and quality of broadband has exacerbated social and economic inequalities - have underscored the need to make access to broadband a right, not something delivered primarily through the market. To that end, as part of an ambitious universal basic services agenda, the ultimate goal should be to make full-fibre internet connection available to all free at the point of use as a tax-funded public service. Once the UK’s full-fibre network is complete, public ownership of the infrastructure - rather than by companies organised to maximise shareholder value - can enable connection to be organised based on universal, decommodified connection, with the operating and connecting costs covered through general taxation.
As developed in Full Fibre Future, the extension of democratic ownership should be accompanied by steps to transform the accountability and democratic control of digital infrastructure, including:
To build a digital and communicative sphere based on democratic and egalitarian principles over oligarchic surveillance, a British Digital Cooperative should be established. A common property, owned collectively by all residents of the country, the BDC, as set out by Dan Hind, “would be tasked with developing a surveillance-free platform architecture to enable citizens to interact with one another, provide support for publicly funded journalism, and develop resources for social and political communication.”
With one likely effect of Covid-19 being the consolidation and the reach and power of the universal platforms, the need to challenge the power of ‘Big Tech’ will be more urgent than ever. A critical element of this is their dominance of cloud computing infrastructures, a source of both very significant revenue and infrastructural power over the direction of the economy. First, by requiring major tech companies to separate off their cloud infrastructure businesses and then regulating cloud providers as key public utilities. And second, a public option ‘cloud infrastructure’ should be created and used to host and perhaps process the vast troves of government data that already exist, and that are continually being produced.
In order to ensure that local communities retain the authority to establish publicly owned broadband networks if they so choose, we recommend passing federal legislation that ends state-level restrictions on public and community owned broadband networks at the local level.
In order to increase access and affordability, as well as reduce the power and control of large telecoms corporations, we recommend passing federal legislation that provides funding for communities and municipalities that are seeking to build public or cooperatively owned broadband networks.
At the subnational level, we recommend that state governments establish funding and technical assistance programs to support the development of local, publicly owned broadband networks (and at the local level, communities use these resources to educate the public and create new publicly owned broadband networks). The latter could include educational and organizing support for local communities and residents seeking to establish public networks, planning, project management, backroom operational infrastructure, and help navigating state and federal regulatory requirements. Further, we recommend that state governments direct public resources and broadband investments exclusively to public, cooperative, or nonprofit entities.
At the federal level, we recommend Congress pass legislation directing that most, if not all, federal revenue derived from wireless spectrum auctions be deposited in a democratically managed public trust fund or funds. These funds could be organized like the sovereign wealth funds that exist in numerous other countries (as well as several US states) and invest (with appropriate criteria) in companies, real estate, and other assets.
At the state and local level, we recommend developing legislation ensuring that any local media station or company (either public or private) receiving spectrum auction proceeds in exchange for shutting down or consolidating operations transfer a portion of those funds into a democratically managed trust dedicated to funding local, independent or public media and journalism.
In order to provide badly needed competition in the wireless communication sector and provide accessible and affordable wireless broadband and 5G service to all Americans regardless of geography and socio-economic background, we recommend that the federal government create its own publicly owned telecommunications company. The existence of a “public option” in the wireless communications sector could help address market failures, reduce corporate power and concentration, provide competitive pressures that would lower costs and stimulate innovation, and generate revenue to cross-subsidize other needed public services and investments.
We recommend developing legislation to break up Big Tech companies by specifically mandating that companies over a certain size divest their cloud infrastructure/computing business. Once divested, these services should be organized as decentralised and democratically governed publicly owned utilities.
Another digital world is possible. But delivering it will require moving beyond the “regulatory state” and market-oriented approaches that have dominated the development of digital infrastructure in the US and UK in recent decades - and which, while delivering a rich stream of dividends for private investors, have led to the slow roll-out of fibre/broadband, increased corporate concentration and control, and a deep digital divide. Instead, public policy should seek to reshape how digital infrastructure is deployed and owned, moving from conditions of private enclosure to a digital commons.
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Common Wealth would like to thank Dr Joseph Baines of Kings College London, and Dr Sandy Hager of City, University of London for their contribution to this report, including data and metrics analysis, which underpin the analysis of report.