In small pan heat milk till bubbles start to form and remove from heat. Add butter, sugar, salt & basil. Stir till butter is melted and cool till around 110 degrees F. Dissolve yeast in the warm water and mix with milk mixture.
Add 3 cups of flour and the egg to the milk/yeast mixtures and beat with a beater attachment on kitchenaid for a couple minutes. Add the ground pepper and once mixed swap to a dough hook. Gradually add remaining flour until dough is smooth and elastic (and pulls away from the bowl).
Pull dough out, and place in a greased bowl. Turn to grease all sides, cover, and let rise in a warm place for an hour or until at least doubled. While waiting, fry up the bacon and drain on paper towels. At this point you want to grease up either 2 LARGE baking sheets, 2 9x5x3 loaf pans, or one of each.
Punch down the dough and knead in the bacon. Divide in half. For a half-moon or wreath loaf cut that half into thirds and roll each third into a 20" strip. Twist or braid strips and pinch the ends to seal together. Shape on baking sheet & Cut a couple slashes into the loaf. For loaf pans, cut into thirds also, but make 3 12 inch-ish ropes. Braid & pinch, and put into loaf pans. Cover with a towel and let rise for another hour. Preheat oven to 375°F.
Brush loaves with yolk/water mix and sprinkle with the cracked peppercorns. Bake for about 1/2 hr or until nicely brown.