British Telecom lost its monopoly around the same time it was privatised. Is today's (very competitive) telecommunications market more a result of privatisation or of the loss of BT's monopoly?
Another way to look at it would be, are BT's customers better off now, than when it was a government company?
That delayed fiber rollout in the UK by decades.
Was that a success? Could be they were too early to justify the cost? But without someone pushing ahead, who develops the technology?
It could of course also have just been a failure if tried to early. So we should just assume this would have worked out perfectly.
I mean, come on. This is HN. Aren't we supposed to be engineers here? Increasing bandwidth only matters if some useful activity is constrained by the lack of it. You can't just say more of X is always a good thing, for any X. Ignoring tradeoffs is the mistake that creates leftism, but there are always tradeoffs.
So..... not really a point for privatization here.
It seems like they had managed to bring the cost below copper:
> In 1986, I managed to get fibre to the home cheaper than copper
> we had two factories, one in Ipswich and one in Birmingham
But the British government was concerned:
> BT's rapid and extensive rollout of fibre optic broadband was anti-competitive and held a monopoly on a technology and service that no other telecom company could do
> So the decision was made to close down the local loop roll out and in 1991 that roll out was stopped. The two factories that BT had built to build fibre related components were sold to Fujitsu and HP
https://news.ycombinator.com/item?id=45915949
This might be an argument for privatisation, because the government was still in full control of the company when they prevented the fibre rollout. Would the owner of a private company squander such an advantage over concerns for their competitors?
On the other hand, would a private company have had the capability to plan this forward in the first place? We do see that from Big Tech companies (e.g. Apple silicon) but could BT have done it under private ownership?
So I think new technology is generated through research funding, either public sector (universities) or R&D depts in private companies (today companies like Apple, previously old school companies like pre-Welch GE). I guess BT was more like the latter, except state owned.
In telecoms there's also a universal service obligation, which does not make economic sense when driven purely by profit motive. Cost of rolling out fiber to a small village will probably never be recouped. Thats why FTTH w/ Virgin Broadband was only available in cities for a long time, and expensive.
In the US where telecoms have regulatory capture, and no public access telecom network, you see stories of rural communities trying to fund their own infra. It's expensive.
Cost of rollout and universal service can be helped by rolling out at scale, building the factories, reducing unit price etc.
So all this together.... I think private companies _can_ have the foresight to do this kind of forward planning... But a big nationwide rollout of a public good? Where is their financial incentive? They would provide an environment for the acceleration of future commerce and technological development. But if they don't make money from it, why would they?
The issue was the subsidies. The fiber plan wasn't going to be profitable then or maybe ever, so it was dependent on tax funding that competitors wouldn't have access to. BT had to become an economically rational company which meant tossing not only the fiber stuff but around half their employees too. Building fiber and then giving it to OpenReach wouldn't have helped BT become competitive.
No, Cochrane was an idiot, exactly the type of central planner privatization was good for getting rid of. Look at what he's saying.
> In 1986, I managed to get fibre to the home cheaper than copper
According to a guy who hadn't done it. How do you make building out an entirely new physical network cheaper than using the existing one? What was this magic trick he found that let him snap his fingers and instantly replace all the wires in the ground? That claim just wasn't true, was it.
Lots of things in that interview were very wrong. "In 1974 it was patently obvious that copper wire was unsuitable for digital communication in any form". The first patent for what became ADSL was filed in 1979. Internet access was rolled out across the existing copper network successfully for decades after that. His engineering skills were "obviously" not that great because DSL isn't an unintuitive idea, it just runs data at different frequencies on the same copper lines as voice. There were high bandwidth copper links in the 1970s already. There's lots of details involved to make it work well to consumer residences, but the concept is simple enough. He didn't research that possibility first because being a nationalized monopoly meant there was no downside to just playing with the coolest tech whilst ignoring economic rationality. He had no history of running a profit-making business, he'd spent his entire career in nationalized monopolies.
You can see the problem here:
> "It's like everything else in the electronics world, if you make one laptop, it costs billions; if you make billions of laptops it costs a few quid".
Since when do laptops cost a few quid? And the costs of FTTH aren't dominated by the cost of fiber and switches, WTF. The cost is all in the manual labor of rebuilding the physical network and upgrading the homes themselves. You can't manufacture your way to a cheap nationwide fiber network.
This kind of economic illiteracy is exactly what brought the British economy to the edge of total collapse in the 70s and caused voters to bring Thatcher in three times in a row (and maybe they'd have gone for a fourth if the Tories had let them).
He wasn't savvy with tech. I just demonstrated that. He claimed it was "patently obvious" you couldn't deliver data over copper just a few years before the tech to do it was invented.
He wasn't savvy with economics either. BT was a basket case when he was running it, which is why they had to lay off over 100,000 employees the moment they were privatized. And again, he claimed you could make FTTH cheap by scaling up cable manufacturing, which is not only economically nonsensical but is obviously nonsense to anyone who thinks about it for a moment.
The moment BT had to actually deliver value matching the prices they charged, they could no longer justify FTTH nor could anyone else, because it was irrational. That's why the project got cancelled. Stop trying to force a left wing narrative where none fits: if FTTH was such a great idea in the 1980s other companies would have done it. None did, because it was the wrong call.
In Australia, we went through a similar journey where fiber to everyone's home was planned and then politically destroyed. Except this happened in 2010 and has been a significant factor in our inability to retain a technical edge.
The USA is the world leader in computing and many parts still have notoriously poor bandwidth to the home today. The link between home fiber and economic performance is very weak.
Bandwidth upgrades need to consider the whole equation, including cost of infra upgrades of different techniques and demand. Remember that fiber was over built during the dot-com bubble and ended up going dark because there wasn't enough demand to consume it, not even on the backbone.
[0] https://www.techradar.com/news/world-of-tech/how-the-uk-lost...
I'd say the issues today (fragmented services offerings, high prices, low speeds) are more due to under investment in the infrastructure (keeping copper for too long) - which could have just as easily happened if it was government run.
I do not think the problems have gone away; dealing with OpenReach is very often as kafkaesque as it would have been.