Why it’s time to break up British Telecom

Where are the best broadband services in the UK?

Hands up anyone who guessed Hull.

In 1904, “a quirk of history gave Hull and East Yorkshire its own phone company”, according to the website of that company KCOM. “Hull is the only city in the UK not to be part of the BT network and KCOM, the local company has been investing heavily in fibre for the last five years,” reports the Financial Times.  As a result, super-fast fibre broadband is widespread across the city. So widespread, in fact, that KCOM plans to abolish the old copper-wire phone network which it considers unfit for purpose in the modern digital world. The rest of the UK lies at the mercy of BT and can only weep.

Hull’s own local company seems to have invested more than BT and has left the rest of the UK behind. Why can’t this success be reproduced? Why can’t other localities be given their own local phone company? A company that is embedded in the community and, by virtue of that, is primarily focused on providing service rather than on the imperatives of short term stock price performance.

We are so often told that big infrastructure investment such as super-fast broadband can only ever be possible through the resources and expertise that only a corporate behemoth can muster. Hull gives the lie to that assertion. Is it time to do to BT what was done to AT&T decades ago – break it up into locally focused companies?

Which brings us to the broader point about system failure. Competition policy is no longer worthy of the name. It has capitulated to endless mergers, largely driven by the short term needs of stock price performance or ideology. From privatisation initiatives that have created non-performing monopolies to proposed mega-mergers (Bayer/Monsanto, Amazon/Whole Foods, Sainsbury’s/Nisa), it is not clear how any of this improves either consumer experience or prices.

Fortunately, the European Commission under its new Commissioner is much more muscular than it was previously. The UK remains supine in the face of corporate and stock market pressures.

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

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