> Rolling out fiber nationwide [...] would have been catastrophically expensive
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
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?
Hmm, I didn't realise that's why the rollout was stopped. (Which doesn't really make sense as a given reason anyway because wouldn't the fibre just have become part of openreach anyway.
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?
> wouldn't the fibre just have become part of openreach anyway
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.
Planning ahead wasn't the issue. The issue was rationality, or economics if you want to call it that. You don't want to build out infrastructure way in advance of demand, it's just bad engineering and would have imposed huge costs on the already crippled British economy for no gain. In the period we're talking about home computers don't speak TCP/IP at all, there is no web, the highest bandwidth users of the internet are email / IRC, hardly anyone is selling internet access to homes and the biggest sites have uplinks of a few megabits/sec at most. What exactly are they going to connect to over all this fibre? Online video wouldn't become practical for decades, machines of the time couldn't even begin to handle it even with infinite bandwidth.
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).
I'm not sure you know the subject very well. By 1986 Cochrane had already overseen fibre installation in the long lines network - leading to a dramatic drop in maintenance and staffing costs - and had installed fibre to his home. He had a clear understanding of the tech and the costs involved. You don't end up on as big a list of boards and directorships as he has without being savvy with both tech and economics.
Your faith in the British establishment is touching but misplaced. Being given a long series of fake (sorry, "visiting") academic roles and board seats is exactly how you'd expect them to protect a former government official.
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.
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?