UK broadband report evades superfast debate

LONDON, UK: As you might expect from a report showily entitled "Digital Britain," the reworking of communications policy released by theUK government this week is a carefully crafted mix of politics and marketing that dodges the tougher issues it purports to address.

The government's plan to improve the country's electronic highways does little to free up investment in the truly high-speed networks that are vital to global competitiveness. This is a problem only communications companies and investors can solve. But government has a role in encouraging a competitive marketplace to get the job done.

Newspaper headlines miss the point when they zero in on the trivial 50 pence a month tax the government plan wants to be added to monthly fixed line phone bills. This would raise an estimated 150 million to 175 million pounds a year for a next-generation broadband fund that network operators could use to reach homes without basic broadband Internet access.

The report spends much of its 245 pages spelling out how to ensure Internet access at paltry speeds of around 2 million bits per second to the remaining 2.75 million homes who do not already have access to broadband.

Two megabits are barely adequate for a single user to download music and videos at reasonable speeds, let alone several users in a household doing multiple activities online. The majority of Britons already have access to faster than 2 megabit speed broadband.

Far from an example of government overreach, the Digital Britain plan is hardly ambitious enough. The discussion focuses only on millions, when billions of pounds are required to achieve the goal of meaningfully fast broadband, which typically is defined as speeds of 50 to 100 megabits.

Digital Britain puts forward 2017 -- eight years out -- as a date by which superfast, so-called "fibre to the curb" broadband could reach 90 percent of UK homes. The plan elected not to advocate the more ambitious technology known as fibre to the home, which promises speeds of 100 megabits a second.

The government initiative invokes the threat of Britain falling behind in global economic terms if it fails to invest in superfast broadband. Countries around the Pacific Rim, the United States and Germany, Finland, France have adopted national policies to advance superfast broadband access.

This year, South Korea, whose densely urbanised population makes it more cost effective to build high-speed networks than more dispersed populations, has committed to a US$25 billion national plan to offer Internet access of more than 1 billion bits per second over the next four years. Australia committed to an A$43 billion (21 billion pound) project to offer 100 megabit speeds to 90 percent of the country's homes at an average of 2,700 pounds per home passed.

But the report gives no clear game plan for Britain to give chase. In the end, Digital Britain leaves it to another government agency, the communications regulator Ofcom, to come up with policies that could speed the adoption of faster broadband networks.

Britain's broadband market remains dominated by former fixed-line monopoly BT. It's competition comes from Virgin Media via cable, BSkyB via satellite, with most other market participants reselling those services. The government's failure to set policies that encourage greater competition can be better understood by looking to France, where former monopoly competes on a far more equal footing with three other healthy rivals in broadband, mobile and other communication services.

Former BT Group Chairman Christopher Bland, in a letter to the Financial Times on Wednesday, argues that a fixed line tax only makes sense if the amount is adequate to the task and its sources clearly identified.

"The report's funding recommendations, which include a paltry 200 million pounds of direct funding and a vague mixture of other proposals, seem... wishful tinkering," Bland concludes.

Universal access to healthcare is an important social goal. But ensuring 100 percent broadband access may cost far more than its worth, especially for the small remaining minority who choose not to purchase it. Where the demand exists, policies should be geared to ultra high-speed links. There is no fathomable level of taxation that can substitute for introducing regulatory incentives that encourage existing or newer market players to compete to offer ever higher speed services and bring about a true Digital Britain.