Encouraging consumers to take up broadband is the key to future
Internet sales. Daniel Thomas reports
Last week, four of the UK's leading think tanks, representatives
from the government and the IT industry issued a call for an end to
the scepticism that has hampered the e-business world since the
dotcom crash of the late 1990s.
Delegates at the conference, Beyond The Backlash, were told that
the Internet still has the potential to create social and economic
change, despite the well publicised dotcom disasters.
The conference was organised by Demos, the Institute for Public
Policy Research, Forum for the Future and the Work Foundation's
iSociety, Charles Leadbeater, an independent advisor on Internet
issues to the government and leading companies, said that too much
focus has been placed on the financial potential of Web
technologies.
"Technology is a force for innovation and experimentation, but this
was hijacked by finance during the dotcom boom," he said.
"The Net can also have an impact on democracy, through the
expansion of free media and the growth of non-governmental
organisations."
Stirring stuff, but if the Internet is to make a significant impact
then broadband adoption will have to increase, said Ed Richards,
social policy advisor to the Prime Minister on IT.
Next week, he said, the government is staging a major e-summit to
address the issue, with contributions from Tony Blair, e-commerce
minister Stephen Timms, trade and industry secretary Patricia
Hewitt and cabinet office minister Douglas Alexander.
"This will help us to identify the next step for UK broadband,"
Richards said.
"We have to ask why the Internet has not affected the macro
economy, because we believe the UK is well placed to boost
productivity with investment in ICT."
Richards rejected the conclusions of last week's report from Demos
which said BT should be broken up in order to boost the rollout of
broadband.
The report's author, James Wilsdon, had said the UK is
"sleepwalking towards a broadband monopoly", but Richards suggested
this was "a soundbite too far".
"There is far more competition in the UK than in countries such as
France and Germany," he said.
Much of the broadband debate centred around infrastructure issues
such as the competition between telecomms operators, opening up of
the local loop and spectrum availability - to the frustration of
some of the delegates.
"The broadband discussion is too vertical, no one is talking to the
people who are going to be using it," said one. "Why not focus on
benefits, rather than the bit-rate?" asked another.
This emphasis on the speed of connection to the Internet, rather
than on what it allows the user to do, has been an unfortunate
feature of broadband discussions to date, according to the
Broadband Content Coalition (BCC), an industry-based lobby
group.
"If broadband Britain is to become a mass market reality, whether
delivered via ADSL or 3G-enabled devices, the availability and
ability to distribute content has to be key," said Sandip Sarda,
the chairman elect of the BCC.
"Expecting consumers to fork out hefty monthly subscriptions for a
fast Internet connection alone is not enough."
Research published last week by analyst firm Jupiter Research
confirmed that scepticism about broadband among European consumers
remains high.
The research, which pegged UK broadband adoption at a mere 7%,
found that 25% of existing Internet consumers in Europe would not
get a high speed connection at all, with a further 29% unlikely to
get one.
"There is no strong motivation for users to upgrade at the moment,"
said Dan Stevenson, analyst at Jupiter Research. "This also applies
to many small and medium-sized businesses."
However, there are signs that the industry is beginning to focus
more on the end user benefits in an attempt to increase the
interest in high speed Internet services.
The government-backed Broadband Stakeholder Group will announce the
launch of three broadband user groups at its annual conference next
week.
Its chairman, Keith Todd, said the move is designed to counter
scepticism from users unconvinced by the largely technical
broadband argument.
"The first step was to look at the infrastructure issues but now we
want to look at users," he said. "That is why we are establishing
three user groups - one for business, one for the public sector and
one for the individual." There will be no single 'killer
application' that boosts take-up of broadband, Todd said, as
different users have different needs.
While it is true that the Internet was never going to mean the end
of schools and supermarkets, the dotcom crash did not mean that the
Web turned into a completely useless tool either.
That was the underlying message from the Beyond The Backlash
conference, but the industry needs to continue to focus the
broadband argument on the benefits rather than the technology, if
any of the initial promises are to turn into reality.
What slowed investment in e-business?
- Too much focus on the financial effects of the technology
- Broadband adoption needs to increase
- Broadband debate has centred too much around the technology,
rather than the needs of the user
- Scepticism about the benefits of broadband remains high among
European consumers
- There is no strong motivation to upgrade to broadband
- Limited availability of broadband access is stifling social and
economic progress.