Digital Britain report set to push broadband for all by 2012


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May 24, 2005
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Digital Britain report set to push broadband for all by 2012

Getting broadband to everyone in the UK by 2012 is expected to be one of the central ambitions of Lord Stephen Carter when the communications minister unveils his initial thoughts about creating a Digital Britain tomorrow.

Lord Carter, former head of regulator Ofcom, will also introduce plans to clamp down on internet music and video piracy; suggest Channel 4 is pushed into a merger in order to ensure its future as a public service broadcaster; and pave the way for the creation of the next generation of super-fast broadband services.

He may also address the issue of regional and local news services, traditionally provided by ITV as well as the BBC, and popular with viewers. They are becoming harder to fund as advertising migrates to the internet, and Carter may endorse ITV's plans for a joint venture with the BBC, which would help it continue to produce local news. He could even support the idea of using taxpayers' money to underpin local newspapers, a controversial idea that divides proprietors.

Lord Carter's final report in June will mark the most significant change in British broadcasting and internet policy since the creation of Ofcom more than five years ago and the publication of his interim report tomorrow will set out the breadth of his vision.

It ranges from a promise that by the time of the London Olympics everyone will be able to get an internet connection that is fast enough to watch the games live on the web to possible relaxation of the rules on local newspaper ownership and increasing the nation's so-called digital literacy so that children know how to protect themselves online.

The next few months will involve a lot of work if Carter is to realise his main ambition: introducing a universal broadband service obligation. The minister, a former cable industry executive, is targeting speeds of at least 2Mb per second nationwide, enough to download video content, including films, with the required investment met by the whole industry rather than solely BT, which is currently obliged to ensure every household has a phone line, at the very least.

Although BT has installed broadband kit in all its telephone exchanges, one in 10 households cannot get anywhere near the sort of speed envisioned by Carter because their homes are too far away, so the mobile phone companies must be called upon to plug the gaps.

A deal with the mobile phone operators, however, is still some way off. They want a relaxation of the rules governing what they can do with their existing slice of the nation's airwaves, so they can run broadband services over their existing phone networks instead of having to spend billions buying up yet more spectrum.

Ofcom is due to reveal its plans for mobile phone spectrum next month, but Carter is understood to have suggested the mobile operators be allowed to keep their existing mobile broadband – or 3G – licences well beyond their original 20-year lifespan in exchange for helping out with the estimated £1bn to £3.5bn cost of introducing universal broadband.

Such a deal would mean Vodafone and O2 – the UK's oldest networks – giving up some of their original spectrum. It would also mean, however, that the mobile phone companies would be less likely to need to buy up parts of the spectrum currently being used by analogue television, which will be freed-up once digital switchover has completed in 2012.

In turn this would allow Carter to give more of this spectrum – the so-called digital dividend – to the BBC to run digital services. The broadcaster would be allowed to sell-on any spectrum it does not need.

Selling spectrum would allow the BBC to plug any gaps in its finances which might appear with the removal of the £130m a year it receives through the licence fee to help people switch to digital TV. Carter wants to use the switchover surplus to bolster his broadband plans, while Ofcom favours using it to help prop up Channel 4.

Privately, Carter has been prompting discussions about a merger between Channel 4 and its commercial rival, Five, to create economies of scale to fund a predicted hole in Channel 4's finances of up to £100m a year.

But culture secretary Andy Burnham indicated last week that he favours a tie-up with BBC Worldwide, the corporation's commercial arm, to create a second public service broadcaster to keep the BBC on its toes. More guidance on Channel 4's future is expected tomorrow.

Lord Carter's report is also expected to discuss the creation of the next generation of super-fast broadband networks – which allow consumers to download music tracks in seconds and movies in just a few minutes. The worsening economic climate has increased calls for government to help companies, especially BT, meet the multi-billion pound cost of installing these networks.

In other countries, such as Australia, the government is actually footing a lot of the bill, and while the UK government is not going to support such direct intervention, Carter is expected to raise the possibility of some form of government intervention – perhaps lending money to companies by acquiring some of the bonds they will issue to fund their investment plans. The Bank of England has already said it is considering investing in corporate bonds.

The National Endowment for Science, Technology and the Arts (Nesta) recently suggested that the government should gift a large slug of the airwaves to the industry for free in return for investment in broadband networks.

Lord Carter also has his eyes set on creating a "world-class regime" for intellectual property protection. He is likely to stop short of turning the UK's ISPs into internet police, but will call for much tighter control of what is done on the internet, in order to protect what he sees as a crucial part of the British economy.

David Lammy, the intellectual property minister, said recently that the government has ruled out introducing rules that would force ISPs to cut-off illegal file sharers, while a recent consultation carried out by BERR – as part of the follow-up to last year's Gowers report into intellectual property – showed no consensus at all across industry about how illegal filesharers should be stopped.

There is talk that Lord Carter will create a "rights agency" which would try to thrash out some scheme under which the content providers and internet access providers can work together. The ISPs are already engaged in a pilot scheme under which persistent file-sharers are sent letters warning that their activities have been noticed and could lead to prosecution.

Essentially, the government favours co-regulation – a voluntary code of practice dealing with the treatment of intellectual property, combined with "high level regulatory oversight", probably by Ofcom. Underlying the plan is an obligation placed on the ISPs that they must work with copyright holders to tackle repeat offenders.

The ISPs, however, believe the content industry ultimately has to come to its own rescue by producing viable legitimate filesharing, streaming and downloading services.

The report is also expected to touch on the subject of digital education and increasing so-called digital literacy in the UK. Former TV presenter Tanya Byron, who advised the government on the impact of the internet and videogames on children last year, is part of the Digital Britain advisory panel.

Carter's initial report comes ahead of reports into the issue of children and online services, which are due in March, from the UK Council for Child Internet Safety reports and the Advertising Association's Digital Media Group, which are both expected to suggest possible changes to legislation to protect children. Burnham has already suggested cinema-style ratings for websites.

Carter is also looking at barriers to wider investment in digital radio and is expected to agree with last year's report from the Digital Radio Working Group which recommended that national, regional and large local stations should migrate to digital radio, although he is expected to stop short of announcing a switchoff date like the one there has been for analogue TV.

The DRWG report said full switchover should occur by 2020, but there needs to be discussion – between 2012 and 2015 – about how that should take place in order to ensure that consumers continue to get a good signal. The FM spectrum freed-up could be used for local radio services.

Richard Wray and James Robinson
Wednesday 28 January 2009 15.15 GMT © Guardian News and Media Limited 2009

A universal right

It is difficult to overestimate the importance of the decisions to be taken as a result of Lord Carter's report on Digital Britain, an interim version of which was published yesterday. Britain is in an unprecedented recession and there is an urgent need to generate new jobs to fill the gap caused by the collapse of financial services. Our best chance is to exploit the digital revolution, not only because it is a vital ingredient of economic growth but because Britain has a competitive advantage - generating content for it.

Lord Carter's report covers many activities, from illegal web downloads to providing a rival for the BBC - rightly seen as a cornerstone of Britain's digital strength - in the provision of public service broadcasting. But his most important proposal is for broadband to be available for every home by 2012. This would happen at speeds of "up to" two million bits of information per second (2 Mbps). That is roughly what is needed to do video conferencing or use the BBC's iPlayer. Further into the future, the report urges the government to consider whether public incentives are needed to finance "next-generation broadband" with speeds up to 10 or even 50 times faster - 100 Mbps - for more sophisticated uses.

The big question is whether the 2012 target of "up to" 2 Mbps, which many users would regard as too modest for their current needs, is enough when parts of the world already have 100 Mbps and when the demand for services is exploding. The argument about bringing the huge capacity of fibre optics to the home, and who should finance it, has been going on for well over 20 years and it still has not happened, though it is now planned for new homes. The usual argument against fast broadband - that there would be no demand - has been blown apart by the video revolution. Bandwidth demands from the iPlayer alone have proved too much for the system at times. We know from innovations in the pipeline - including high-definition TV, remote medicine, remote education, life-sized video conferencing and the rapid growth of ever more sophisticated virtual worlds and multiplayer gaming - that the demand for bandwidth will be huge. If Britain is to succeed in encouraging industry to supply equipment and content then we cannot err on the side of caution.

The Broadband Stakeholders' Association says the cost of upgrading to 20Mbps by running fibre to a box near the home would be £5bn, only a fifth of the £25bn cost of fibre right into the home. That will not deliver the national need for a very high speeds that other countries will be enjoying. The government is currently shelling out tens of billions of pounds to bail out the banks. In such circumstances it seems almost modest to invest £25bn to ensure that Britain has a digital infrastructure to give us an advantage in exploiting all the new services that will spring up during the rest of the century.

Building a network does not guarantee that it will be used. The government's 2Mbps commitment to universal broadband by 2012 is not like BT's obligation to deliver phone lines to every home. It is more like a statement of intent. At present some 60% of households in the UK have broadband. This is not bad by international standards, but it means that 40% do not have it, either because they cannot afford it or they do not want it. Lord Carter is suggesting steps to combat this, but it is not going to be solved by market forces alone. If it is not solved, an even bigger digital divide will open up between the broadband elite and the rest. The elite will have access not just to the instant knowledge and the best seats at major sporting and cultural events, but to the unfolding opportunities in education, health and the job market. This is unacceptable. Like water and electricity, broadband is fast becoming something that everyone is entitled to have.

The Guardian, Friday 30 January 2009 © Guardian News and Media Limited 2009

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So far as small business use goes it's a great idea but they are too late IMO. We needed these speeds 5 years ago when the Europeans offered them at discount rates.

For us as a small business it would be impractical to move our data centre back to the UK, anyway by the year 2012 the Finns will be offering speeds that we can only dream of.