LONDON There were one or two big surprises in U.K. (departing) communications minster Lord (Stephen) Carter's final Digital Britain report, but on the whole, the word underwhelming and the phrase missed opportunity comes to mind.
The long-trailed White Paper aims to overhaul the communications and media landscapes for the next generation, but listening to the minister on television last night (on the BBC –clearly not his favourite broadcaster judging by his main recommendations) and his numerous references to forthcoming consultations and proposals, one wonders how much of this will, in any case, come to pass in the dying days of a government.
The biggest winners are probably BT and the proponents of digital radio, and some of the country’s public service broadcasters. The losers – without doubt the taxpayers and those who abhor "industrial activism".
Despite being widely criticized back in January when an interim report was doing the rounds for simply committing to a broadband network that will offer a miserly 2Mbit/s by 2012, the final version's broadband access goal is just that – for every household. That, of course is a minimum speed, one that is currently way out of reach of about a fifth of households.
The report talks vaguely and inaccurately of such an aspiration for universal broadband service as placing Britain at the forefront in Europe. Unfortunately it misses the point that some countries, for instance South Korea, are committing to universal data rates of 1 Gbit/s.
To add insult to injury, Carter suggests taxing each fixed phone line in the country by 50 pence a month for at least the next seven years as a sort of contribution to a "seedcorn fund” that will be given to operators to build out rural broadband access and a "next generation" network offering 10Mbit/s by 2017.
This will be made available on a tender basis to any operator and will provide a part subsidy for the deployment of next-generation broadband.
The government has also found £ 200 million in the kitty to help operators meet the Universal Service Commitments. Actually, the money is coming from the (BBC) TV license fee since some clever accounting has indicated that far too much money was allocated to help the corporation spread the word about the analog TV signal switch-off.
Some of this money is also to be used to aid the likes of BT and Virgin extend the fibre optic lines to rural areas, since, it has become clear, these and other operators would not commit to this without some partial subsidy. What is not clear is whether the £1 billion over seven years being discussed will be sufficient for all this.
Strangely, all this just a few days after a country-wide poll showed that 43 percent of people would not use broadband even if they had access to it – a notion Lord Carter completely debunked and dismissed in his BBC interview.
Whilst a pleasant surprise, Carter's plans appear ill thought out. Firstly, as consultancy Ovum points out, the model follows a similar approach to the one originally taken in Australia, which the government eventually abandoned in favour of building a fibre-to-the-home (FTTH) network itself after concerns that a fibre-to-the-curb (FTTC) solution (most likely what the fund will enable) would not represent value to the taxpayer. FTTC would mean speeds of up to 50Mbits/s by 2017 - hardly future-proof when compared to other countries.
Secondly, the introduction of a specific tax on fixed lines has not been tried elsewhere. It may have the effect of accelerating the pace of fixed-to-mobile substitution, which would only serve to reduce the size of the fund and provide a signal to the mobile sector and in particular to mobile broadband, which Carter admits himself is unlikely to deliver true next-generation bandwidth.