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* Labour promises free fibre broadband for all
* Labour to nationalise BT's fixed line network
* UK PM calls the plan 'crackpot'
* Labour to tax Google, Amazon and Facebook to pay
* Labour suggests other telecoms could be nationalised
* BT shares fall as much as 3.7%
(Adds Corbyn quote)
By Guy Faulconbridge and Paul Sandle
LONDON, Nov 15 (Reuters) - Britain's opposition Labour Party
plans to nationalise BT's broadband network to provide
free internet for all, a radical election pledge to roll back 35
years of private ownership that caught both the company and its
shareholders by surprise.
The addition to Labour's already broad nationalisation plan
for infrastructure sent BT's shares down as much as 3.7%, wiping
nearly half a billion pounds off its market value.
But the market reaction was relatively muted as investors do
not expect Labour to win the Dec. 12 election, analysts said. BT
also retained the right to show UEFA Champions League soccer
games, helping to support shares.
Labour said its proposed overhaul of the telecoms
infrastructure would be paid for by raising taxes on tech firms
such as Alphabet's Google, Amazon and
Facebook and using its Green Transformation fund.
It would nationalise Openreach - the fixed-line network arm
of the country's biggest broadband and mobile phone provider -
as well as parts of BT Technology, BT Enterprise and BT Consumer
to created a "British Broadband" public service.
"A Labour government will make broadband free for
everybody," Labour leader Jeremy Corbyn said in a speech. "This
is core infrastructure for the 21st century. I think it's too
important to be left to the corporations."
"We'll tax the giant corporations fairly - the Facebooks and
the Googles - to cover the running costs," said Corbyn, adding
the public had been forced to pay far too much for "rip-off
broadband" and the party's plan would transform the British
economy.
BT, which traces its history back to an 1846 telegraph
company, was once one of Britain's national champions and the
flagship of Margaret Thatcher's privatisation policy when it was
floated by her Conservative government in 1984.
Labour's announcement brought into sharp relief the election
stakes: Prime Minister Boris Johnson who promises to deliver
Brexit in January or Labour which says it wants to be the most
radical socialist government in British history.
Johnson's Conservatives, who currently lead in opinion
polls, said the broadband plan was a fantasy that would cost
taxpayers tens of billions of pounds. Johnson has promised to
roll out full-fibre broadband to all homes by 2025.
"What we won't be doing is some crackpot scheme that would
involve many, many tens of billions of taxpayers' money
nationalising a British business," Johnson said.
Labour said the cost of nationalising parts of BT would be
set by parliament and paid for by swapping bonds for shares.
'VERY, VERY AMBITIOUS IDEAS'
In what would amount to the biggest shake-up in British
telecoms since Thatcher's privatisations of the 1980s, Labour
said few would lose out while millions would benefit.
The national Openreach network is also used by BT's rivals,
including Sky, TalKTalk and Vodafone,
to provide broadband to their own customers. Its only competitor
with widespread coverage is Virgin Media, owned by Liberty
Global.
TalkTalk said on Friday a deal to sell its FibreNation
business had stalled after Labour's announcement.
Labour's second most powerful man, John McDonnell, suggested
that the owners of the networks that compete with Openreach,
such as Virgin Media's cable network and new fibre providers,
could come to an arrangement or be nationalised too.
"We'll come to an agreement with them. It will either be an
agreement of access arrangements, or working alongside us, or if
necessary they can come within the ambit of British Broadband
itself," McDonnell said.
Labour, led by 70-year-old socialist Corbyn, has been open
about its plans to nationalise the rail, utility and water
companies as well as to increase taxes on the wealthy, but has
never previously suggested nationalising BT's assets and the
company was taken by surprise.
"These are very, very ambitious ideas and the Conservative
Party have their own ambitious idea for full fibre for everyone
by 2025 and how we do it is not straightforward," Chief
Executive Philip Jansen told the BBC.
BT CRITICISED
Currently, fewer than 10% of British premises have access to
full-fibre broadband - also called fibre to the premises -
where fibre optic cable instead of copper is used to connect
homes to the network.
BT has been criticised by customers, rivals and the
regulator for poor service and a lack of ambition in upgrading
its network to fibre, where Britain lags far behind European
countries like Spain.
Labour said it would roll out the free broadband to all
individuals and businesses by 2030, providing it to at least 15
million to 18 million premises within five years. It said the
plan would save the average person 30.30 pounds a month.
There would be a one-off capital cost of 15.3 billion pounds
to deliver the full-fibre network, on top of the 5 billion
already promised by Johnson, the party said.
The Conservatives said the real cost would be over 83
billion pounds over a decade, that shareholders would sue the
government and that it was unclear what the impact would be on
BT's pension liabilities.
"It needs funding, it is very big numbers, so we are talking
30 to 40 billion pounds," CEO Jansen told the BBC. "If you are
giving it away over an eight-year time frame it is a another 30
or 40 billion pounds. You are not short of 100 billion pounds."
Jansen said last month that Johnson's time scale for
delivering full-fibre broadband to all homes would be extremely
difficult to achieve.
($1 = 0.7815 pounds)
(Writing by Michael Holden and Guy Faulconbridge
Additional reporting by Andrew MacAskill, Andy Bruce, Alistair
Smout and Aishwarya Nair
Editing by Rosalba O'Brien, Jane Wardell and Frances Kerry)
