Net industry told to adapt or die: it didn't. Now we are kicking the corpse.

This morning I had cause to look at the BBC cover of my speach at TMA 2002. I told the audience unless they got their political act together most of the exhibitors would be out of a job within the year. They did not and they were. There was no TMA 2003.

It was cancelled for lack of stand bookings. Those suppliers who had not gone down or withdrawn from the markets were downsizing as the equipment market dried up and most of the UK’s newly built fibre networks were switched off.

Virgin Media is at long last restarting the investment programme it suspended in 2000 when government policy switched from competition in the local loop to local loop unbundling. My speech in 2002 was on the need for would-be technology suppliers and major users to address the consequences: including the collapse of investment in world class communications infrastructures to meet meet the needs of business, not just consumers.  

Last monday I chaired a meeting on high speed networks. In my opening remarks I contrasted the Digital Britain “vision” of a 2meg universal service provision by 2012 with the pre-1997 vision of competition in the local loop: BT and Cable Companies competing to provide entertainment quality video to the home by 2002: using the 10meg “sweetspot” for which most of the global technology suppliers were designing at the turn of the century.

It came as news to most of the audience that the current “vision” for 2012 is so much less ambitious than that which the previous government had promised not to review before 2001: Ian Taylor MBE MP in “NET-WORKING” published by CPC in 1996 when he was minister. 

Meanwhile the world has moved on.

Those who wish to be part of global high-tech (from aerospace through telemedicine to online games) supply chains, including as home-based designers or content-creators, need reliable and resilient symmetric links. Depending on whether they need inter-active facilities for design and production these may need to be 10, 40 or 100 megs. 

The time has come kickstart investment in fibre to the home and workshop – not to kick the corpse of past investment. Taxing copper lines is rather like taxing canals to fund railways.

Instead we need to remove barriers to investment: like the pre-Dickensian processes of the Valuation Office for agreeing business rating valuations in the face of the reluctance of players to disclose their true costs. BT and the VOA are not being unfair. They are merely following a set of well-established precendents, built up over centuries to help protect the past from the future. It is almost certain that reform would lead to a burgeoning of overall tax revenue from the profits generated direclty and indirectly by the new networks.

But the VOA is by no means the only piece of fiscal and regulatory obfuscation in the way of enabling UK plc to catch up with overseas competitors at little or no net cost to government.

Freeing BT to sweat the local fibre networks that it put in the ground in the late 1990s, without requiring it to make that investment available to competitors at uncommercial costs, would enable it to once again provide a world-class service at the same time as rebuilding its pension funds and giving a long overdue reward to its investors. But that would be as big a “betrayal” of those persuaded to invest in local loop unbundling as the end of duopoly was a “betrayal” of BT shareholders.

Opening markets to genuine competition and locally led innovation would offend almost all the major players as well as threatening our burgeoning regulatory and central planning empires.

No wonder politicians find it so much easier to “leave it to the experts”: alias industry lobbyists, regulators and their contracted consultants and academics.  

On Thursday, at the EURIM “Smarter Britain” workshop for Parliamentary Candidates, we heard of a new public sector system using mobile technology to strip out reporting overheads and  make better use of staff time where the payback on investment had been under 14 days.

Many of the costs being quoted for major communications networks could similarly be slashed by innovative, cross-cutting approaches.

For example the Candidates were told by one of the industry players in the audience (a very eminent semi-retired engineer) that the communications costs currently being quoted for smart metering could be slashed by up 90% if these were pooled with investment in mixed (satelite, mobile and fibre) next generation networks.

Ofcom was created as a consumer protection regulator tasked to promote and protect competition. Any transmogrification into an investment protection regulator needs at least as much political scrutiny as the legislation that brought it into being. 

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