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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%
(Recasts, adds context, Labour comments)
By Guy Faulconbridge and Paul Sandle
LONDON, Nov 14 (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.
Labour said its proposed overhaul of Britain's 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.
The addition of BT to Labour's nationalisation plan sent the
group's shares down as much as 3.7%, wiping nearly half a
billion pounds off its market value.
But analysts said that the share price reaction was
relatively muted as investors do not expect Labour to win the
Dec. 12 election. BT also retained the right to show UEFA
Champions League soccer games, helping to support shares.
Labour said 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.
"It's time to make the very fastest full-fibre broadband
free to everybody, in every home in every corner of the
country," Labour leader Jeremy Corbyn will say in a speech,
according to an extract released by the party.
He will call the current network patchy and cast the plan as
one that would "reduce people's monthly bills, boost our economy
and improve people's quality of life".
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 stakes
of the election: 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.
The cost of nationalising parts of BT would be set by
parliament and paid for by swapping bonds for shares, Labour
said.
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.
'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 of voters would get
access to a connected and socially inclusive future.
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 suggested nationalising BT's assets before. BT was taken
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 straight forward," 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
rivals 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)
