60 Business The EconomistNovember 23rd 2019
1I
n 1990 british telecom(bt), a former
state-owned monopoly, was in the early
stages of upgrading its copper wires to fi-
bre-optic cables. Its plans were scotched by
the Conservative government of the day,
worried that it would damage the compet-
itiveness of other firms in Britain’s newly
liberalised telecoms markets. Three de-
cades on, broadband is once again a hot-
button election issue. The opposition La-
bour Party wants parts of btto be renation-
alised—and a full fibre-optic upgrade to be
completed. British Broadband, as the new
entity would be called, could then offer free
connectivity to every citizen and firm.
Labour thinks state control could lift
Britain in global fibre-optic rankings. The
oecd, a rich-country club, puts it 35th out
of 37 countries in its use of the technology,
which allows far higher speeds than copper
wires (see chart 1). The government has al-
ready pencilled in £5bn ($6.5bn) to raise fi-
bre’s share of broadband.
On top of nationalisation, Labour wants
to boost this pot to £20bn and to maintain
the new network via a tax on technology
firms that furnish services over it. Nation-
alised industries are not always inefficient,
Labour says. Jeremy Corbyn, its leader, has
compared the project to the National
Health Service, which achieves passable re-
sults while spending less per person than
most other rich-country health systems.
It is true that some of the speediest na-
tions have been more willing to spend and
to prod private firms than Britain has,
which for decades has relied on opening up
bt’s core network so that other firms canpiggyback off it as the main mechanism to
improve standards. But wiring up a rich
microstate like Singapore or San Marino is
a doddle compared with doing the same in
sparsely populated Scotland. So is hooking
up flats, which are more popular in conti-
nental Europe than in Britain.
Perhaps the closest comparison would
be with Australia’s state-run National
Broadband Network, which also promises
a high-speed connection to every home
(though consumers must still pay private
internet-service providers to connect to it).
It is late and its costs have risen from
A$30bn in 2013 (then $29bn, and 1.9% of
gdp) to A$51bn today, which is 2.6% of gdp.
Critics call it a wasteful mess. Even defend-
ers say it has become a political football.
British broadband is not quite as awful
as the fibre figures imply (see chart 2). Dif-
ferent comparisons of broadband speeds
give different results, though most put
Britain behind other rich countries. On the
other hand, prices are reasonable. And
though ultra-fast connections are rare by
international standards, so are truly slug-
gish ones. Such digital equality should
please the egalitarian Mr Corbyn. 7Would nationalising btimprove
Britain’s broadband?TelecomsPolitical
bandwidth
Speed kings and the queen^2Sources:OECD;Cable.co.ukBroadbandsubscriptionpenetration
Byspeedofconnection,December2018,%Averagecostofbroadbandservice
2018,$ perMbpspermonth0 1020304050
France
South Korea
Germany
Britain
Canada
United States
Japan
Australia
Italy
Mexico10 25100 Breakdown
Up to (Mbps): unavailable1.5 01234
Italy
Canada
Japan
Australia
Mexico
United States
Britain
Germany
France
South KoreaLow-fibre diet^1Source:OECDFibre as % of total broadband subscriptions
December 2018
0 20406080
South Korea
Japan
Australia
Mexico
France
Canada
United States
Italy
Germany
BritainT
he launch in 2018 of “Red Dead Re-
demption 2” was a huge event in the
history of entertainment. It raked in $725m
in its first three days, behind only “Aveng-
ers: Endgame”, a recent superhero flick,
and “Grand Theft Auto V”, a game from
2013—and that despite being available only
to owners of pricey games consoles. On No-
vember 19th it became available to an even
wider audience with the launch of Stadia,
Google’s game-streaming service.
Google is not the only tech titan to bet
that streaming will prove as transformative
for the $150bn video-game industry as it
has been for music, film and television.
This month Microsoft announced new
games for its experimental xCloud service,
which is due to launch in 2020. It will work
with xbox Game Pass, an existing down-
load-based subscription service that offers
more than 100 titles. Amazon is widely as-
sumed to be working on something simi-
lar. Big Tech will be battling second-tier
players, including Nvidia, a maker of gam-
ing-focused computer chips, and Electron-
ic Arts (ea), a games publisher. Sony, which
makes consoles, already offers streaming
through its PlayStation Now service.
Streaming lets anyone with an internet
connection play any game by farming out
the computational heavy lifting required to
run gaming software to cloud servers. It
will not replace consoles overnight; both
Microsoft and Sony are launching new ma-
chines next year. But by offering the option
to play blockbuster games like “Red Dead
Redemption 2” without paying upfront for
hardware, it could lure owners of compara-
tively feeble devices such as smartphones,
tablets and tvs to cutting-edge games.
Catherine Gluckstein, one of the Micro-
soft executives in charge of xCloud, points
out that of the 5bn people who own smart-
phones, about half dabble in cheap-and-
cheerful mobile games. Next year xCloud
tests will be expanded to India, where con-
soles remain a luxury but internet no lon-
ger is; more than 500m Indians enjoy ac-
cess to the web, mostly on their phones.
Michael Pachter of Wedbush, an invest-
ment firm, thinks streaming’s worldwide
expansion could triple the size of the gam-
ing market to nearly $500bn by 2030.
If, that is, the companies can pull it off.
Streaming a film or a song is straightfor-
ward. Data can be downloaded ahead of
time to smooth out connection hiccups.
Not for games, which must react instanta-Streaming has changed music, film
and tv. Time for video gamesEntertainmentMortal kombat