Has Ofcom passed its sell-by date?

Those involved in the pre-legislative scrutiny of the Communications Act 2003 which created Ofcom were well aware of the need to subsequently review implementation and perfomance. There were various ideas as to how to achieve this: including a joint committee of both Houses. None came to pass.


It is now apparent that Ofcom’s performance against its “general duties” (section 3.2 of the Act) is at best patchy. Meanwhile it is busy trying to set policy – a role on which the Scrutiny Committee raised significant questions.


One of the first tasks of the Class of 2010, the largest intake of new MPs since that of 1833, will be the scrutiny of a new Communications Act to implement the regulatory changes currently being negotiated in Brussels.


The appointment of Stephen Timms to oversee the implementation of the Digital Britain report is most welcome, even though he will be massively overloaded. His day job as Financial Secretary to the Treasury will be central to acheiving positive results – even though political realities make substantive legislation before the next election most unlikely.


Most of reasons why the UK is once again falling behind the rest of the world in local access to world class bandwidth and content fall outside the remit of the departments of Culture and Business, let alone Ofcom and do not require legislative action.


They include, for example:


  • the way that the administrative formulae currently used for Business Rates valuations penalise network investment other than by incumbent operators
  • the unique UK interpretations of the EU procurement rules which block the municipal participation in local public-private partnerships that is common across most of the world.
  • the failure to bring together the needs (both civil and military) of central and local government for secure and resilient communications needs in shared procurements

The Ofcom consultation on Next Generation Network reads much like a return to the centralised planning regime that was abandoned by the Conservatives in the 1980s when they privatised British Telecom and Cable and Wireless legislation.


The Conservative policy was intended to lead, by 2002, to full competition in the local loop for broadcast quality video services. That policy was abandoned when Labour won the 1997 election because it had supposedly “failed”: i.e. the problems of the cable companies in getting permission to dig up suburban pavements had led to delays and cost over-runs.


Instead we got “local loop unbundling”: dropped as an option by the previous Government for reasons that have since proved to be all too accurate. BT halted its race to replace copper by fibre throughout its network lest it have to give access at knockdown prices to its competitors. The Cable companies heaved a sigh of relief and halted their investment plans. Most of the fibre networks had been installed for networks that would have competed with both were then switched off because the business rates were more than the revenues. Meanwhile the high resilience MoD network was bought by BT for £1 and those links that did not fit current business needs were at best mothballed and at worst grubbed up.


The UK dropped from poll position to also ran, even after broadband had been redefined downwards from that need to carry full motion video (then 5 – 8 megs) to 512k.  


The Ofcom Next Genration Networks consultation needs to be viewed in the context of current US attempts to leapfrog China to provide the high security and resilience networks that will dominate markets from 2015 onwards. They (both suppliers and network operators) have gone beyond esoteric arguments over net neutrality. Their aim is to respond to the current dominance of Huawei in installing low cost fixed and mobile IPV6 based broadband networks across Asia, Latin America and Africa. That dominance is now spreading across mainland Europe, and includes the switches for BT’s 21st Century Network.


If the Americans fail, China will become the first dominant global superpower to have achieved that position by peaceful (more or less) means. That raises the interesting question of the UK’s most important strategic partner: the EU, US or China.


I personally believe we should be very much more positive with regard to active and enthusiastic co-operation with those who invented ICT (the printing press) and are urguably the world’s greatest engineers: from the ships of 1421, through the US transcontinental railway crossings of the Rockies, to the world’s most reliable satellite launchers.  


We also need to recognise how strong those links are becoming. The teenagers of Lambeth download films from Chinese websites, ignoring the subtitles, because it is easier and faster than the Western sites. The only problem is that the local connections are so slow that they have to leave this as a background task while they gossip on their mobiles.


In this context take a look at the 2009 Oxford Internet Institute Survey. The proportion of those accessing the Internet over landlines is falling steadily, from 92% in 2003 to 75% in 2009. Meanwhile that for access over mobiles has risen from 2% to 32%.

According to the survey 31% of Internet users “Waste too much time going through irrelevant information on the Internet”. In my case sifting Ofcom material accounts for a significant proportion of that time. The days appear long gone when the definition of a successful regulator was one who had worked most of their staff out of a job, because most of the tasks they inherited could now be left to informed customers in an open market.  


Will the revolt of the Class of 2010, elected in the wake of a collapse of confidence in those who claim to know best, bring those days back?


Who knows?


But you will not be surprised to note that the EURIM Communications Group, many of whose members and observers helped organise the pre-legislative scrutiny for the 2003 Communications Act, has flagged preparing for a repeat exercise as its main task for 2010.


The group will NOT be taking sides or making recommendations.


Instead, as in 2001-2, it will be tasked to identify the issues,  players and positions so as to help ensure the open and effective scrutiny of any proposals and of the legislation that results.