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Rory Cellan-Jones

Can Digital Britain top the league?

  • Rory Cellan-Jones
  • 16 Jun 09, 19:35 GMT

This morning, as he visited the Crystal Palace digital television transmitter, the Prime Minister made an extraordinary promise. Just hours before the publication of Digital Britain, he said this:

"Britain's going to lead the world. This is us taking the next step into the future, being the digital capital of the world, making the necessary investment."
Make no mistake - that is a hugely ambitious statement - a bit like the manager of Manchester City promising that his team will win the Champions' League within the next couple of years.

International comparisons of broadband speeds are pretty difficult - nobody seems to collect reliable data - but to be top of the league you have to compete with the likes of South Korea and Japan, where many householders have come to think that 100Mbps is just about the least they can expect from their internet connection.

So surely Lord Carter would have to pull a rabbit out of the hat in his long-awaited report - after all, the 2Mbps minimum service level that we've been hearing about for months was never going to make Britain the "digital capital of the world"?

Well there was a rabbit, in the form of a levy on every landline to help pay for next-generation broadband.

The government knows that BT and Virgin may well end up bringing fibre connections to as much as two-thirds of the country - though mostly fibre-to-the-cabinet rather than right to the home - but they won't reach the final third because their investors just won't foot the huge bill.

That's where the landline levy comes in. But, at £6 a year on every phone, this new tax is not going to be a huge moneyspinner - it'll raise between £150 and £175m a year, according to the department for business.

I put in a quick call to the Broadband Stakeholders' Group, which calculated last year that taking fibre to every corner of Britain would cost as much as £27bn. Perhaps unsurprisingly this industry lobby group was determined to be positive, insisting that this cash would make a real contribution to keeping Britain in the fast lane.

That may well be the case - but will we lead the world? Look at Australia, where the government promised in April to invest over £20bn to build a fibre-to-the-home network reaching 90% of households. That plan makes Lord Carter's look very unambitious.

Now given the state of the public finances, the UK government was in no position to promise a multi-billion pound investment - and even a £6 tax on the phone bill may not prove too popular.

Still, over the next decade, as much as £1.5bn in extra funding will go towards giving Britain faster broadband. Will that make us a world-champion? Possibly. But, as Manchester City have found, you can spend an awful lot of cash these days and still struggle to reach the top of the league.

Comments

  • Comment number 1.

    Heh, it'll be interesting to see people's reactions to the idea that we all have to pay money towards the people living in the countryside who aren't able to even get basic internet.

    Really this idea that we'll be the forefront is all complete rubbish.

    Just because you want to give every home in the country access to broadband doesn't make you the leader. You need to back it up with actual services and facilities that mean we would use the internet instead of a more traditional method. THAT is what would make a country a digital leader.

    The more activities the greater amount of the population do online, the more truth to the idea that we are one of the leading cuntries in the world.

    The problem with this is that at 2Mbit, you aren't going to be able to. The upload alone from even the fairly quick packages is no where near enough to make something like working from home with a little dab of teleconferencing or uploading vast amount of work a reality.

    You need continued pushes by Virgin and BT into the upper 100Mbit sort of connection and you need to try and force them to have a decent ratio of download/upload speed. Also there was no mention of network neutrality. How can you be a leading digital country if your entire internet is tiered and limited so you aren't able to access sites others can unless you pay more, which is the fundamental threat we will face unless there are specific laws against ISPs trying to create such tiered packages.

  • Comment number 2.

    Gordon Brown promises to make us a world leader, and he lets a report go through that will make sure we are bottom of the pile not top. His digitalbritain team have obviously no idea about what real Next gen access is if they think for one minute that putting a tax on phones to pay for face plates and bits of new wiring is gonna make an obsolete copper network deliver what physics say it can't. For next gen you need fibre. end of. Surprised at you Rory for writing such an insipid post. Manchester is a pilot, it will always cost more to be the first, but at least they are doing something! BT have the ducts, they are half empty. They could use those ducts to get fibre to the areas that are unable to get decent broadband, and as you have visited many of them lately you know there are lots and the fact that none will ever get more than 2meg is a disgrace, and certainly not the digital britain that Gordon braggs about. You have missed the point if you think the levy can pay for next gen, it can only pay BT to do what it should have been doing for years. O and while I am on a rant one of the bbc reports online today are on about our network, and some of the facts they quote from BT are totally inacurate and out of date, whoever wrote it (no name and no comments allowed) wants firing. She quotes a 'bt spokeswoman' and a load of rubbish stats. Hope you can fix. Gives a bad impression of BBC u know.Here it is http://news.bbc.co.uk/1/hi/england/lancashire/8103005.stm

  • Comment number 3.

    Wow - we've got a long way to go before we can compete with likes of the US! At least they are getting us heading in the right direction :)

  • Comment number 4.

    You can tell the Government were involved in this one as the end solution to all problems is to introduce a tax, with some sound bites from GB. They could have announced this on day one? The UK has problems funding the transport network, education or the health service. Will this money just disappear into the Governments huge debt? Even current cable service users are discovering that the service they paid for cannot cope so how can an ancient copper wire network manage to get the UK a service that matches South Korea etc..How many years will it take?

    One thing missing in the UK are the modern technology companies with huge R&D budgets that drive such networks into being, all the overseas tech R&D spend is/has moved elsewhere just as manufacturing did in the 80/90s due to a lack of Government support. We need home grown tech companies to drive these networks, where are the UK tech companies such as Apple, Google, ebay or Nokia? So give tax breaks to tech companies, reduce red tape and support them. Where is the same support the car industry appears to get?

  • Comment number 5.

    I don't see today's proprosals can make us a world leader, Japan in looking at 90% fibre coverage in a year or so, and universal mobile broadband coverage. Finland will hit its 1Mbps USO in 2010, and 100Meg by 2015.

    The report mentioned that we are starting to see under investment in the middle mile, but from the early readings I've not found a solution proposed, but then these reports are hard going to digest.

  • Comment number 6.

    I see that we, the consumer, are yet again being targeted as a source of taxation and will be tapped for yet more of our hard earned money.

    A 50p per month tax on the internet if you have a fixed home line may not sound much but I bet that will rise and rise and rise and rise until only the wealthy can afford to pay such a tax or it leaves people crippled financially, the same as any other taxes on "luxuries" in this country tend to do. The low-paid, retired, unemployed (through no fault of their own and willing to find employment) can barely afford internet access as it is let alone having to pay extra taxation on it.

    I'm all for improving the infrastructure but do we not pay enough already?

    What's wrong with forcing the ISPs to funnel the profits they make back into the system instead of giving it to fat cat CEOs and greedy shareholders!

  • Comment number 7.

    Tax! Ha! Why do i have to subsidize the alleged 'poor' for everything ....... its making me poor! Surely the internet is a market driven product, the faster, the more it costs, you want it, you pay for it etc.

  • Comment number 8.

    Australia is rolling out 100mbps broadband to 90% of its population and that across a whole continent, at a cost in excess of £20bn.

    Has anyone done the maths for this, all those 50p's add up to about £200m+ by 2010, after Gordon Brown & Co have set up a new commons select committee, a new task force, a new Czsar and a new 2mbps Champion there won't be enough money left over for tea and biscuits never-mind a digital network to propel us to the top of the world broadband league.

    Pathetic! although I'm not surprised everything the government has done for the past few years is.

  • Comment number 9.

    If the government starts subsidising broadband for those it claims can't afford it (although plenty of those people seem to afford to smoke, go out, drink, have the latest mobile phone contracts, and full Sky TV) then it just may be the straw which breaks the camels back, and I just may give up work myself and get the tax payer to pay for my lifestyle choice of doing nothing, but getting everything paid for.

    Oh and a digital Champion, Martha Lane Fox, what next making her a 'Lady' so she can sit in on cabinet meeting like the rest of the false Lords currently do, this governments decision and 'cronyism' become more laughable by the day

    Also, when companies are profitting from the extra investment in the infrastructure will they a percentage of theri revenues back to the taxpayer until the debt is paid off, or is it just another example of the Labour government using tax payers money so private companies and their fat cat directors can get rich? and people thought the Conservatives were bad.

  • Comment number 10.

    Didn't Crash Gordon say that he was "Saving the world" too ?? Wasn't he going to show the world how to "get out of the Credit Crunch and recession" ?? What was that he trumpeted about "No more booms or busts" ?? More desperate soundbytes from a failed PM !!

    Try visiting South Korea !! They have blanketed the whole country with *REAL* high speed broadband capable of TV and movie transmissions. Meanwhile, "up the pole or down a hole" BT is still struggling to provide Video on Demand to most people !!

    World leaders ?? That man is self-delusional !!

  • Comment number 11.

    '...the Prime Minister made an extraordinary promise.'
    '...making the necessary investment'
    '...a hugely ambitious statement'


    He said something, again. So you do have to report it, again. I guess.

    Talk, it is said, is cheap. Sadly, under this man we seem to get an awful lot, and it almost always ends up costing us. A lot. Usually with little or nothing of value to show for it.

  • Comment number 12.

    The Prime Mentalist has given up. He told two blatant lies before breakfast yesterday (in The Times): broadband is as important as water (it isn't) and UK will "lead the world" (it won't). But the MSM don't even remark on the pathological mendacity any more. If Brown comes on TV on Saturday saying that he has been communicating with alien civilisations or that the moon has been conclusively proved to be made of cheese, it won't make the front page of the Sundays. The whole Digital Britain bandwagon proves only that there is no vision for the future at all.

  • Comment number 13.

    Clearly, topping the league would require G, Brown to put the 3 G Heist moneys back into a grand vision around FTTH.

    Carter has put a great deal into play. I thought the 50p would go on Broadband, not the phone line but perhaps it is easier to collect and I hope the Mobile AIP fees and additional auction fees will feed the same structional fund. It is odd as Ofcom made a great play on geographic de-averaged pricing being a benefit of competition.

    They found some cash to kick off the Universal Fund, but I reckon they need 250m a year.

    The 2Mb service is all about affordabilty. It's a circa £15 per month service + you phone and mobile bill. FTTC is £40-50pm and FTTH is a £100pm. It's about propensity to pay.

    I would describe the DN report as an optimised mid range plan working within the existing structures and interests of the operators. For a man with little money and what looks like little support Carter has done well.

    I need to re- read the report to see what instructions he giving to ofcom on creating a 'bit commons'. The internet is fundamentally 24x7 connectivity with no billable events. The existing network services are are structured around creating scarcity so each event can be logged and billed. The £95 pm we pay for TV/Mobile/Fixed and Broadband needs to re-distributed in favour of better connectivity, with less on services. This re-distribution has to be engineered by Ofcom by re-defining its market definitions and moving away from call termination fees and messages, to bits transfer.

    It does not appear we are yet ready to embrace the Internet to its full potential, but Carter has put things into play.

  • Comment number 14.

    I see they are really going to push DAB...again. Why are we spending money pushing basic DAB which is obsolete technology? We've already subsidised DAB with huge amounts of money and its just not worked. If you look at how much has been spent on advertising DAB compared to the number of DAB units sold it is a silly figure.

    The BBC have said that to provide universal coverage of DAB costs 4 times as much as similar FM coverage. Many commercial broadcasters have pulled out of DAB because they just can't afford to run DAB stations, and other countries like Germany are considering closing down their DAB "experiments". But despite this they are pushing ahead with the closure of all FM stations.

    Also, the audio quality on DAB is pretty poor, it's over compressed and if you can't get a strong signal then instead of getting a slightly noisy station like you would with FM or AM you just get nothing. DAB+ gives much better quality but is not compatible with DAB so a switch to DAB+ would make all the existing DAB kit that has been sold totally obsolete.

    The only reason the government want us all on DAB is so they can sell off the existing analogue spectrum, hoping to repeat the mobile phone spectrum sell off fiasco.

  • Comment number 15.

    Dear oh dear oh dear.

    How can 2mbps be classed as world-leading when that is already way behind other countries (as reported by yourself, BBC) 100mbps in Korea.

    Please Mr Brown, step down and let someone sort out the mess of the country before you start taking MORE OF MY HARD-EARNED MONEY on such over-ambitious projects such as this.

    And besides, thanks to Virgin, I already have a connection that's 10 times your proposed world-class speed .. makes me glad I don't have a telephone line at home (no need thanks to Skype and mobile phone)

  • Comment number 16.

    Whilst I do myself see the internet as essential nowadays, there are other "essentials" which I think are higher up the list.

    Once we've tackled knife and gun crime, improved our communities and changed people's attitude so as to prevent the emergence of gang culture, once we've made sure that all children in the UK are living above the poverty line, have streets that they feel safe to walk down.... then maybe we should start pouring money into giving everyone internet.

  • Comment number 17.

    It seems that the tax will only be for those using a fixed copper line (report page 14) so those with cable do not have to fork out more money to bail out BTs lack of investment.

    Of course all of this is just a long list of wants from some body of suits sitting in dark rooms, the usual Government output from several months of talking shops, something that Labour are very good at.

    Please will someone finally own up to the fact that the present DAB system is rubbish, it is not a step in quality it is a step in quantity, its the same model as that seen on pay for view services quantity over quality. Its ironic that in the age of pushing HD for video that audio broadcasts and music delivery is going in the reverse direction. Support the better formats being tested overseas.

    I would prefer a lower number of broadcast stations providing a quality service in content and sound, its not surprising that the current mode of hundreds of stations need to be bailed out.

    At the end of the day no matter what the government think getting broadband into some remote village in the highlands is not as critical as providing decent roads/education/health care, and of course jobs which are being lost at a huge quantity at the moment. Get the basics right first please...

  • Comment number 18.

    It is amazing that one third of UK adults have never used the Internet and more amazing is that over half of those (around 8m) say they don't intend to. This point seems to be missed by the Digital Britain report which is focussed on putting £billions into Supply side activities (infrastructure) and only allocates £12m to Digital Participation (how you get people to use it). The build it and they will come philosphy is flawed (remember the Dome!). You have to work on the demand side by demonstrating that as the other two thirds of the population think that technology is indispensable that there are real personal, social and economic advantges to being online for every individual (the "Spark" or the "Hook"). If you do that (and trust me it is very simple and cheap to do)then they will be banging on the doors of the all the suppliers in droves demanding high speed and the suppliers will be falling over themselves to get a share of the action. To ignore the needs of the unconnected is criminal - Digital Inclusion is now a basic human right and if we don't fix it now we will never top any leagues.

  • Comment number 19.

  • Comment number 20.

    Everyone's arguing about this 2MB minimum seems silly, I don't know why we are comparing the minimum speed we want to the 'normal' speed in Japan. My speed is much higher than that (and with investment, it will get even faster) but everyone should be able to get some kind of speed.

    I find the 50p tax very odd considering the subject. Broadband and landlines are no longer the same thing (think 3G) although the tax is there to lay what are essentially land line cables I suppose.

    Lastly I think the blog above makes the debate overly simplistic. Speed is a factor in making Britain a leader in digital content but certainly not the biggest factor. Education, industry focus and universal access are far more important.

  • Comment number 21.

    So, when will the landline levy end?
    My bet is that this tax will still be in force many years from now, even when the case for it no longer exists; particularly if the money goes to the treasury to be re-allocated (as with the road tax) rather than to directly funding fibre optic.

  • Comment number 22.

    Survey's have shown that most of the people who don't have broadband don't want it. Why should the country be taxed (and an odd way to raise funds as well) to pay for it? This won't be enough, won't lead the world, and is a very odd way to raise revenue. Poll tax by the back door - a flat rate for all payers.

    The tax system in this country just got slightly more complicated.

  • Comment number 23.

    Right... so how do I know if I've got copper or fibre? And if I do have copper, does this mean I can cancel my (little-used) landline and rely on Skype and mobile?

  • Comment number 24.

    No 20. Totally agree with your last paragraph, there is no point in leading the world in some high speed networks if there is no industry there use it, what is the point of adding more UK tax to support young Freddy using facebook ! The Government need to invest/support something other than services industries, it seems everybody will be working for Tesco soon as everything with any value jumps ship to Asia.

  • Comment number 25.

    Isn't there a danger that in a few years time this strategy centred on fibre-optic will be made redundant by the rise of wireless broadband connections? Looking at your article on Japan's digital plans that's where seem to see the future.

    The govt seem to think that having everyone connected means that everyone will access govt services online. I wonder how true this is? Or will the levy just mean more people can play online poker and access online porn? (And isn't making govt services available online really just an excuse to cut real-world public services? A move that favours the educated and technologically literate but disadvantages those already socially excluded?)

    I also wonder what the long-term social effects are going to be? More people are living alone, pursuing solitary interests and in some cases living in half-real, half-fantasy worlds. Rather than bring us together I suspect the digital age is going to increase isolation and loneliness.

    I'd like to see a more wide-ranging debate about where digital Britain is heading.

  • Comment number 26.

    This seems to be an incentive to move off of land lines? Most young people seem to only use their mobiles anyway, and this seems like a tax to ensure the decline of the rest of the landline network. Seems like a badly thought out policy.

  • Comment number 27.

    Whats the betting that 50p tax is just the start. Soon corporations by the music/movie industries will start taking a chunk just like they have a tax on all CDR/DVDR, MP3 players and all sorts of other items...

  • Comment number 28.

    I don't think Gordon can be in touch with what happens in Asia, especially Japan and South Korea. If he thinks this plan is going to make UK a world leader, it will be a leader of the second division.
    High speed fibre optic, houses are given a star rating depending on their broadband availability and lots of free Wifi in the cities to encourage people to learn and use technology. Go into any coffee bar in say Kuala Lumpur most people are on laptops, doing business, making VoIP calls way ahead of UK

  • Comment number 29.

    The vast majority of the issues and reasons why broadband is still in such an awful state here in the UK ultimately comes down to BT.

    BT owns the copper lines. BT owns the phone exchanges. BT even owns quite a substantial amount of the cable optic fibre network and it is BT who are unwilling to front the cash to upgrade these things that they own, the things that no one else can pheasably pay to upgrade as they are property of BT, and in so doing continue to stunt the growth of the UK's phone and internet capabilities.

    How can you get round all that? Simply put you can't. Its too little too late. The smart thing would have been to take the exchanges away from BT, at least partialy, and allow direct competition of phone line technology rather than BT's total monopolisation on the exchange and copper services. But if you tried that now you'd likely find it will just result in a heap of exchanges simply getting shut down and further hurt and stunt the growth of broadband in this country.

    Unfortunately we are now suffering the results of: A. Allowing BT's monopoly to continue despite weak attempts by the government to dismantle it, and B. A country smothered in concrete where digging up and laying new cables its a multi-billion-pound project even though there is less ground to cover than countrys like Australia who are able to supply fibre to larger stretches of land for a cheaper price.

    Lead the World? Not a chance. Japan and South Korea would ensure that could never be the case. Lead Europe and the US? That is very much achievable and Virgin's 100mbs proposals for late '09 early '10 would certainly place us up there. But BT's utter lack of commital will realy prevent that from happening.

    Get rid of BT is what I say.

  • Comment number 30.

    @29 VampiricHoshi

    The amazing Virgin service you speak of reuses to give me any sort of fibre connection, in fact the majority of the large village I live cannot Virgin fibre because the company refuses, always has refused and always will refuse, to lay down an opitical fibre line.

    As long as Virgin are main providers of fibre this country is going nowhere, which is what we all know. And as for BT, they wanted to go fibre when it was affordbale and cheaper to roll out all the way back in the 1980's where the cost was far less than the £27Billion stated for today. However, the Conservative Party were the ones that said no!

    So before going on to have a go and BT, check out the history. This issue could have been prevented and it wasn't, and not suprisingly at the end of the day none of this would be discussed today if the Tories had simply done their job when they were in office!

  • Comment number 31.

    @30 point to where I made any mention of an "amazing Virgin service". I merely referred to the fact that Virgin is in the process of rolling out a 100mbs service which looks probable to, because of this service, place the UK at the top of Europe because it would result in a greater share of its populace being able to use a higher speed.

    I think perhaps the word "refuse" in regards to Virgin laying extra cable is a poor choice of words or at least is dependant on regions. My area is cable-accessable but areas for many of my friends are not, and in contacting both Telewest prior to Virgin's take over and now Virgin Media, the response from the cable company has simply been this:

    Start a petition from residents of your area and if there is enough evidence that a business model is viable we will lay the cable.

    You are flaunting an awful lot of hate at a company for not spending money to lay cable, but if the area you live in is prodominantly a high BT and Sky region then why would a cable company risk millions, hundreds of millions or even billions laying cable and building street boxes that will go un-used? Virgin are clearly not going to do that unless there is evidence they can capitlise from it. As it stands, it was not the cable companies by-and-large that laid much of the fibre optics network that currently exists in the first place; it was a consortium owned predominantly by BT who still own much of that network and demand a levy for extending it - yet another reason for any cable company to be reluctant to dig more cable and yet another reason why BT are choking the country's progress.

    BT on the other hand own the manopoly on broadband in the UK and on telecoms in the UK. There is not a single region of the country where BT does not stand to capitilise from laying the cables yet are unwilling to pay the price and instead want it to be footed by the tax payer.

    Whether that is the fault of the Torries is rather irrelevant, the fact still remains that it is BT that has the final word to say in Britain's digital progression and right now the word is simply "give me money".

 

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