Business needs ignored in Digital Britain report

The Digital Britain report just published aims to provide a blueprint for an economy based on a high-speed digital communications infrastructure.

The Digital Britain report just published aims to provide a blueprint for an economy based on a high-speed digital communications infrastructure.

There is a clear benefit for consumers: the benefits for the producers are less clear.

Mark Vickers, CEO of telecommunications network provider NetServices, said the speed increases would probably benefit media users for entertainment, but businesses needed reliability and quality in their broadband service. These were presently delivered through a service level agreement, not by speed alone. "If market penetration is to increase, it will do so when business users can work from home with these criteria met," he said.

Communications minister Stephen Carter said as much at the launch of his report. He said the five paragraphs devoted to business communications were a "weakness" of the 240-page report. He said most large and medium enterprises were "sophisticated" communications users. Smaller firms, the vast majority of UK companies, were likely to benefit from the consequences of the Digital Britain policies, which would address issues such as access to high-speed internet, security and reliability, he said.

Carter said the first such benefit was that the government would test all aspects of the resilience of the national network infrastructure later this year.

The government was giving communications the same status and attention as it gave the transport infrastructure, he said. As a result, Ofcom, the communications regulator, would also have to report every two years on the networks' fitness for purpose.

The government would also introduce legislation to address intellectual property protection online, converting radio to all-digital broadcast, the universal service commitment, using public services to increase the amount on online content in the market, and enable video games to claim tax relief for British cultural content.

But this does not go far enough for some.

Carolyn Kimber, chairman of the Communication Managers' Association, whose members spend £15bn/y on communications, wants a new Communications Act that balances better the interests of businesses and consumers. She said, "The CMA would have preferred to see an unequivocal commitment to carrier-neutral, open access networks as part of a revised universal access obligation."

The report preserved the "stranglehold" that BT and Virgin Media have over core networks, said Chris Smedley, chief executive of Geo, a private fibre network operator.

"Digital Britain (has) condemned the UK to an extended 'copper age'," he said. "It was meant to provide a framework to upgrade and modernise the UK's digital networks, but instead leaves us still dependent on antiquated copper networks for broadband."

Mark Seemann, product & strategy director for Genesis Communications, a fixed and mobile host that serves some 25,000 small and medium firms, agreed. The copper infrastructure would restrict broadband speeds to around 50Mbps, he said.

"If the underlying infrastructure was changed to optical fibre, the speeds today could be 100Mbps per customer rising to 1Gbps. This would make feasible the most advanced business applications, such as high definition video conferencing and streaming complex software over the web," he said. These were impossible with today's broadband technology, he said.

Countries studied by the Broadband Stakeholder Group, such as Australia, New Zealand, Singapore and Finland, were planning to install fibre to 75% to 100% of homes, which would give residents 100Mbps. South Korea was planning to introduce a 1Gbps service soon.

Carter offered little to content creators, whom the government hopes will take over from bankers as the drivers of the economy. But there is likely to be cash for local and regional news organisations to make up for the slump in advertising revenue, and video game makers may get tax relief.

Carter seemed more concerned to preserve existing content distributors, such as the BBC, ITV and Channel 4, albeit in modified ways. But he made it clear that content owners and distributors would have to come to terms with digital distribution.

The mobile phone sector shows precisely how vital to real economic growth are applications, content and peer to peer social networking. Unless the government takes this into account, Digital Britain risks a life on the shelf.


Government intervention in superfast broadband around the world

Australia: A$43bn project to deliver fibre to the home (FTTH, capable of 100Mbps) to 90% of homes; 12Mbps to the remaining 10%. Public to own at least 51% of the project. Minimum A$2,750 (£1,350) per household, depending on public sector share of investment.

New Zealand: NZ$1.5bn of public money to be used alongside private investment to deliver FTTH to 75% of homes. NZ$1,000 (£390) per household.

Singapore: $0.75bn of public funds available to deliver FTTH to 100% of homes. $715 (£450) per household.

Finland: By end of 2015, 99% of homes will be within 2km of a fibre connection. 95% of homes will be served by the market. The remaining 5% will be two-thirds funded by public investment of €133m. €55 (£47) per household (additional investment required to connect homes to fibre infrastructure).

Greece: €0.7bn of public investment, with a further €1.4bn of private investment, to deliver FTTH to 2m homes. €192 (£160) per household.

USA: Stimulus package includes $7.2bn for broadband projects, some which is to stimulate investment in superfast broadband, although most is to expand current broadband services. $63 (£40) per household.

UK: Final Third Fund to raise £1bn over seven years to bring superfast broadband to every home. £6 per household per year; £42 per household over seven years

Source: Broadband Stakeholders' Group

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