Archives for July 2010

Remember the Kindle, the device that was going to cause an earthquake in the publishing industry, while saving the travelling bibliophile from backache and excess baggage charges? Well, according to some technophiles, Amazon's e-reader is already sooooo last year, made redundant by the arrival of a shinier, smarter tablet device from a rival technology firm.

Not so fast. Today Amazon is unveiling a new version of the Kindle, and making clear the scale of its ambitions in the UK. For the first time UK users will be able to order the e-reader from its UK store rather than have it shipped across the Atlantic, and then buy books from a UK Kindle store. Having had a quick look at the new device, I think I understand why Amazon believes it can still be the game-changer in the book trade, however much attention Apple's iPad and iBooks store may be getting.

Steve Kessel, the Amazon executive who was in London to spread the word, was keen to dispel any idea that the Kindle had been affected by the arrival of the iPad. In fact, he said, sales had accelerated, particularly since the price was cut a month ago. And last week Amazon grabbed headlines with the news that it was now selling more digital books than hardbacks.

What's interesting about the latest Kindle is how defiantly different it is from the iPad or other tablets. Amazon has refused to bend to pressure to make it touchscreen or to introduce colour. The company believes that would detract from the experience, which it seeks to make almost impossible to differentiate from that of reading a book.

"You're not buying a gadget," says Mr Kessel, "The design goal was to make sure readers still get lost in the author's words."

Priced at around a third of the cost of an iPad, weighing just 250g and with a battery that can last a month if the wireless is switched off, the new Kindle will certainly prove attractive to those who just want an e-reader, rather than something that can surf the web, play videos or do a dozen other things.

Amazon believes there is a big and big growing audience for that kind of device. We shall see, but even if the hardware fails to prove an enduring hit, the online retailer can still win the software battle. Its Kindle store can already deliver e-books to a range of devices, from phones to tablets, and it has a much wider range at lower prices than Apple's iBook store and, it claims, than any other e-bookstore.

In the end, it is the publishing industry, not Apple, that needs to sit up and take notice of Amazon's ambitions. Its prices will be forced lower by the advent of the Kindle store.

"Customers believe prices for digital books should be lower than those for the real thing. We believe that too," says Steve Kessel.

The Seattle firm now has the power to do to book retailing what Apple has done to the music industry. Now there's a thought which might well put some veteran British publishers right off their lunch.

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Here are some headlines from Ofcom's broadband briefing:

• the advertising of broadband speeds in Britain is scandalously misleading
• BT's copper is incapable of delivering decent speeds
• Virgin Media is showing that fibre is the future
• the digital divide between town and country is bound to get wider

Ofcom's boss Ed Richards did not put it in those terms. In fact, he resisted pressure from journalists to be a little more black and white, but that was certainly the regulator's message as he took us through the latest study of the broadband speeds consumers are actually getting.

The survey shows there has been a small increase in average speeds but nearly all of that is due to a doubling of what cable customers are getting.

Customers still getting their broadband down a copper wire from BT or one of the firms using its Openreach network have seen their average speeds nudge up just a tad from 3.7Mbps to 4.0Mbps.

But even those customers who have moved on to faster copper connections using the ADSL2+ technology do not seem to be getting what they've paid for.

The most striking slide in Mr Richards' presentation showed the average download speeds for people on "up to" 20Mbps copper deals. 65% were getting less than 8Mbps, 32% between 8 and 14Mbps, with just 2% getting 14-20Mbps.

Virgin Media, whose cable network was shown to deliver real speeds much closer to those advertised, will no doubt be buying advertising space to trumpet the results of Ofcom's research, while BT will be hoping that nobody notices it.

Ofcom was keen to promote a new voluntary code which should come into force over the next year, allowing consumers to get out of their contracts if they are not getting what they were promised.

To be fair, most broadband firms do try to give prospective customers an idea of a realistic speed for their location, though some DSL suppliers seem to promise more than others, even when they are using the same infrastructure.

The burning issue seems to be the way broadband is advertised, and Ofcom was keen to stress that was the responsibility of the Advertising Standards Authority (ASA).

But Mr Richards offered the opinion that if ISPs advertised speeds of up to 20Mbps, then at least some of their customers - maybe 10% - ought to be able to get those speeds.

The ASA told the advertising watchdog was currently reviewing this topic, and hoped to have something to say over the next few months - though a spokesman said they hadn't been bombarded with complaints about broadband speeds.

But the other message emanating from Ofcom was that while fibre is the future for broadband, that means the digital divide between town and country is bound to grow.

ts figures show that townies are already getting twice the average speed delivered to country dwellers, and as they start taking advantage of the fibre networks spreading through towns, the gap will widen.

With the government's deadline for delivering a minimum 2Mbps service to all homes extended from 2012 to 2015, a few places in rural Britain may feel that they're being left far behind in the fast broadband revolution.

Ed Richards was not going to get involved in the debate about how we pay for a next-generation network; all he would say was that it was beginning to make a difference:

"There's an investment process taking place and this research illustrates why this needs to happen."

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How does a brand-new web business in the UK get noticed? I get asked that all the time by entrepreneurs and PR people who are convinced that they are involved in a venture that will change the world - if it only gets a bit of airtime. Well, I have a simple answer - first provide something that journalists like and find useful, and then move to Silicon Valley where the most prominent technology writers live.

I woke on Wednesday morning to find that the leading lights of the techie blogosphere, from Robert Scoble to Techcrunch to Gigaom, were all raving about a new thing that would rock my world. It was called Flipboard, and was billed as a revolutionary social news reader.

It is in fact a very clever app for Apple's iPad, which as well as displaying your newsfeeds in an attractive fashion, turns your Twitter and Facebook activity into an instant magazine. You set up your feeds, then find your friends' Facebook photos laid out as if in the pages of Vogue, or the links your Twitter mates have posted turned into an edition of the Economist.

So, a clever idea - but one that has a limited audience in the four million or so people who have bought an iPad. So would it have got the depth of coverage and created such an instant buzz if it had not been based in California, and invited the likes of Robert Scoble round for a preview? When I tweeted to this effect, Scoble himself immediately came back:

"not true. I hyped up Saludo and it is from Israel and for Windows that I rarely use anymore."

(Update 1719: Robert Scoble has been in touch to point out that the Israeli company is in fact called Saluto.)

And the founder of Tweetmeme, a UK-based start-up also told me that his firm got positive coverage from Robert Scoble, though it appears the firm has made a real effort to get itself noticed in the US.

But I still think it's much harder for anyone outside Silicon Valley to make an instant impact. I have been discussing this with Mike Butcher, who has been covering the European tech start-up scene for the last decade.

He says a big problem is that coverage of technology in the UK media tends to be largely negative, focussing on threats to privacy or child safety posed by new web businesses. As we were speaking, he spotted an example: "Look at the story in today's Guardian about [location-based social network] Four Square, which is all about the dangers of being stalked. Imagine if it were a UK start-up - it would get hammered." Even the specialist writers are cynical - Mike points out that The Register, an online technology news site, has the strapline "Biting the hand that feeds IT."

I'm not sure that anything can or should be done to change the way British journalists look at technology - we just tend to be more sceptical than our American counterparts.

But Mike is hoping that a venture he has co-founded called TechHub may make a difference. It's a space for start-ups in London, designed to give them a place where they can work on their own businesses while exchanging ideas with others. Mike's co-founder Elizabeth Varley puts it like this: "That supportive, upbeat atmosphere that Silicon Valley has and which helps startups thrive is something we want to create in and around TechHub."

So will a UK equivalent of Flipboard now have a chance of making a huge noise in the blogosphere and becoming a Twitter trending topic within hours of launch? It seems unlikely. But then again, that may be for the best.

Flipboard got so much attention that its servers could not cope, and it is still struggling to deliver its service to the millions who downloaded it after reading Robert Scoble et al. The danger is that disgruntled customers will not bother to come back and try again. It looks as though too much attention can be as harmful for a brand new business as too little.

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In the smartphone wars, two of the biggest combatants, Nokia and Microsoft, have been the walking wounded over the last year. So is it too late for each of them to make a comeback? Or is the battle for hearts and minds already over?

Let's look first at Nokia, which unveiled its second-quarter results today amid much gloom over its failure to keep up with Apple, RIM (makers of Blackberry) and Google's Android platform. At first sight, there's little to worry about. The Finnish giant is still the market leader in the smartphone segment it created, with 41% of what it refers to as "converged mobile device" volumes, unchanged from a year ago.

The trouble is that it is selling lots of phones, but not to the top end of the market, so its profit margins are paltry compared with those earned by Apple, a company with a much smaller market share.

One figure really tells the story. Last quarter, the average selling price of its smartphones was 143 euros (£120), which was 21% lower than a year ago. By contrast, Apple's average selling price for the iPhone - in other words, what it gets from the operators - was reported in its recent results as $595 (£389). No wonder Steve Jobs was celebrating more record profits this week.

Nokia's embattled CEO Olli-Pekka Kallasvuo insisted that there was room for optimism. He promises that new phones on the Symbian platform, notably the N8 due out later in the summer, will "kick-start Nokia's fightback at the higher end of the market." He says the N8 "will have a user experience superior to that of any smartphone Nokia has created." But as the experienced mobile industry analyst Carolina Milanesi of Gartner put it to me, "it's not enough for Nokia to provide its best-ever phone - it's got to be better than anything else in the market."

The same applies to Microsoft, which is now preparing the ground for the launch of its brand-new Windows Phone operating system. I spent a pleasant evening earlier this week being given a quick tour of the software, and chatting to Mircosoft executives about their hopes that it would bring the company roaring back into the smartphone battle.

At first glance, Windows Phone looks very impressive - a clean and simple interface with rapid access to the things you need most, by contrast with the clutter that is beginning to make some of its rivals less attractive. But will it succeed in winning back Microsoft's lost market share in smartphones? One of the executives used an interesting word - "mindshare" - to describe what Apple has got, and what Nokia - and, by implication, Microsoft - lacks in the smartphone business.

By that I think he meant that even though the iPhone is bought by far fewer consumers than those who purchase Nokia phones, it has won the battle for hearts and minds: it's talked about; it has an aura around it; it's the kind of phone that many are happy to wave under their friends' noses. The same is beginning to apply to Android phones, with some early iPhone adopters now boasting of switching away to an operating system which they think is cooler and less locked-down than Apple's.

Why does what goes on in the minds of these people matter? Because they are the ones prepared to spend money not just on hardware, but on the services - maps, music, apps - which may well be the real money-spinners in the future. Now Nokia and Microsoft have to try to win some of this "mindshare" for themselves - and each faces a different challenge.

Nokia is, some would say, stuck with an operating system Symbian which has so far proved unattractive to many users. Microsoft has got a good-looking new OS, but limited control over the handsets on which it will appear - although the company stressed to me that it's exerting more control than before over manufacturers, insisting for instance that handsets running Windows Phone have a certain number of buttons and a minimum processor speed of 1Ghz.

So will they make it? Microsoft insists that the smartphone market is still young, and there's plenty of time to catch up. Carolina Milanesi seems sceptical: "When you're late to the party, you really have to do something special to get noticed." Watch out, smartphone customers: the battle for your minds is about to get intense.

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Thought the Digital Economy Act, with its controversial measures aimed at deterring illegal file-sharing, had gone away?

Well it hasn't, and the big Internet Service Providers (ISP) who see themselves as the main victims of the act are determined to make sure we know about its potential impact.

They are engaged in discussions with Ofcom about how the law will be implemented, and two of the biggest ISPs tell me that the assumptions being made by the regulator will startle consumers.

They say Ofcom is expecting that the volume of letters that the big providers will have to send out to customers on behalf of media businesses who think their rights have been infringed will be enormous - hundreds of thousands a month, perhaps three or four million over the space of a couple of years.

"It's a monster thing to do, to write to hundreds of thousands of people," said a senior executive at one ISP. "Some will move to another network, there might be thousands of appeals."

He says the customers will be told they have to take "reasonable steps" to avoid infringing copyright in the future but it's not clear what is reasonable.

"Will they have to secure their wireless networks, or sit over their children's shoulders making sure they're not being naughty, or perhaps stop using perfectly legal peer-to-peer services like Spotify? It's a dog's breakfast."

Now Ofcom is playing down its rough estimate of the number of warning letters that will be despatched. A spokeswoman suggested it was a back of the envelope calculation, and the point of talking to the ISPs was to get a more accurate idea.

But when I turned to the record industry which lobbied so hard to get this act through there was little surprise about the figures.

Apparently last year alone the industry trade body the British Phonographic Institute (BPI) sent evidence it had gathered of more than a million cases of music copyright infringement to ISPs - with no result, it adds.

It believes there are six to seven million illegal file-sharers in the UK - a figure which the ISPs seem to accept so it's not surprising that a large amount of paperwork will be involved.

And, as the music industry points out, long before the act was even thought of, consumers were receiving letters accusing them of illegal file-sharing - letters that have often been far more threatening than those that could be sent next year.

In the last week, a firm of solicitors called Gallant Macmillan has sent out thousands of letters on behalf of the Ministry of Sound record label. I've seen one which accuses the recipient of illegally making available an album and inviting them to pay £350 or face court proceedings for infringing the rights of the label.

It's a tactic from which the BPI has dissociated itself in the past, and the trade body now says it believes the Digital Economy Act, with its three warning letters giving householders the opportunity to stop any illegal file-sharing, is a better way for content owners to protect their rights.

If the ISPs have their way, it will be a long time before the Act begins to bite. BT and TalkTalk say their lawyers tell them they have a good chance of getting it blocked if the judicial review they are seeking goes ahead. The battle over this controversial law is far from over.

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When he walked past a Scientology centre on a trip to London last year, a councillor from Cardiff cannot have expected that his reaction would end up fuelling another big hoo-hah over free speech on the internet.

Nor that it would end up with him being hauled up in front of his council's ethics committee.

But Councillor John Dixon's mistake was to go on Twitter and say this:

"I didn't know the Scientologists had a church on Tottenham Court Road. Just hurried past in case the stupid rubs off."

Somehow this was spotted by a member of the organisation and in due course a complaint was made to the Ombudsman for Public Services in Wales.

The watchdog has partially upheld the complaint; to be more precise, it has found there is a case to answer under the code of conduct for councillors and has passed the matter on to Cardiff City Council's Standards and Ethics Committee.

So it seems Councillor Dixon has joined the growing list of politicians who have found that careless tweets can damage their careers. 1-0 to the Scientologists, then?

Not so fast. When news of the case erupted on Twitter this morning, it rapidly became a cause celebre - or rather a cause for mockery of Scientologisty.

Prominent members of the Twitterati - a crowd which includes many who are free-thinkers sceptical about religion in any form - started retweeting Councillor Dixon's original remark. Very rapidly, the term #stupidscientology became a trending topic on Twitter.

Now there are all sorts of lessons one could draw from this affair - about the dangers of social networking for politicians, the perils of taking on Twitter, the advisability of spending many hours and presumably a lot of public money investigating whether the word "stupid" is sufficiently offensive to constitute a breach of a code of conduct.

But, rather than face being hauled up in front of an ethics committee myself, I think I will allow you to draw your own conclusions.

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So how is the great paywall experiment going at the Times?

We now have two early indications (though neither from the newspapers themselves) and they provide conflicting views on the eagerness of people to pay for their online news.

First came the report from the web analytics firm Experian Hitwise that showed that two thirds of the Times and Sunday Times web traffic had melted away after the paywall went up at the beginning of the month.

At first glance, that should have them doing the conga around the Wapping newsroom. After all, the bosses at Times Newspapers had made it clear they full expected at least 90% of the audience to depart, so if they'd persuaded a third of them to pay to stay, that would be deemed a huge success.

But then this afternoon a site called Beehive City had some figures that may have made the champagne go flat at the Times. According to the site, just 15,000 people have signed up to pay for access to the papers' two websites - and don't forget that there was an opening offer of £1 for 30 days.

Beehive City says more than 150,000 registered during the free trial period but it appears that only a small minority then opted to pay. The Times won't confirm these figures, so why should we taken any notice of an obscure website?

Well Beehive City is run by Dan Sabbagh, who until last November was the media editor of the Times, so I think we can assume that his sources are excellent.

So why the great gulf between the two sets of figures?

Well it's probably not as big as it first appears. Hitwise is measuring traffic which will include many people who arrive at the Times home page and then decide to go no further. And even if there are far fewer visitors, having paid their money they are likely to come to the site far more regularly and spend a lot more time there.

The strategists at the Times always thought that there was a better future in serving a small select audience of dedicated paying customers than a mass of passers-by - but 15,000 looks a little too select.

Still, Mr Sabbagh does have one set of figures which he believes will cheer up Rupert Murdoch and his lieutenants. He says that 12,500 people have so far paid for The Times app for Apple's iPad, which at £9.99 for 30 days is more expensive than access to the website.

Given the limited number of people who have an iPad that is quite impressive, and the app itself is a very enjoyable way of reading the Times on a small screen. Mind you, if like me they find that downloading the Times each day can crash their device they may not be keen to pay up next month.

It's too early to judge whether the paywall experiment is going to work. But at the moment it looks as though readers are happier to pay for a dedicated application, which can be simply downloaded onto a tablet device than to be bothered with going through the rigmarole of registering on a website and then handing over their credit card details.

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If you were to believe the rural broadband lobby there is a simple answer to closing the digital divide between town and country - fibre.

But the cost of laying fibre-optic cable down every country lane still looks prohibitive. There is though another possible solution - wireless.

I think someone must have told TFL Group that we were going to be reporting from the broadband notspot of Felindre near Swansea. The company turned up at the village hall to demonstrate how they could blanket the area in broadband relatively easily.

They mounted a temporary mast on a hill above Felindre, which picked up a signal from Swansea and beamed it down to a receiver unit at the village hall.

Now they can show the locals the joys of a broadband connection with download speeds of about 15Mbps and remarkably fast uploads of over 4Mbps.

Now this won't satisfy the fibre lobby looking for 100Mbps but it could provide a short-term fix for many places. It's important to remember however that the economics are still a little tricky.

Felindre will need to get some cash from the Welsh Assembly - and show that sufficient numbers of villagers are prepared to sign up for the service - before it can move into the broadband fast lane. Or perhaps middle lane.

Update, 1707: Oh, and by the way, the Culture Secretary Jeremy Hunt has come out with something of a bombshell at that broadband summit today.

Last night his department was still talking of being committed to a minimum 2Mbps broadband service for virtually every community. What it was not saying was that the culture secretary was about to postpone that commitment for three years from 2012 to 2015, on the grounds that Labour had not left enough cash in the coffers to do the job.

Even last month Mr Hunt still thought that this 2Mbps target, set out by the Labour government, was "pitifully unambitious". Now he has decided it is in fact too much of a stretch. So if we can't afford 2 megs for all, don't expect the Treasury to come rushing round with the couple of billion pounds BT thinks might be needed to bring super fast broadband to every corner of Britain.

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I've spent the last 24 hours taking the temperature of Broadband Britain on a trip to Swansea in preparation for today's government summit with the broadband industry.

Here's what I found about my own and other people's connectivity as I travelled.

0800 Paddington Station: My phone has locked onto the BT Openzone wi-fi hotspot in the station, one of 8,000 that come free with my contract. Unfortunately it doesn't work - I get taken to a registration page and then on a never-ending loop of "authorisation failed" messages. It's a familiar experience - free and easy public wi-fi still has a way to go in the UK

0900: I'm on the train to Swansea, typing this first entry into the blog. I'd hoped there'd be wi-fi on the train - it's increasingly common - but no such luck. I do have a 3G dongle with me which allows me to get online, though of course the coverage comes and goes as we cross southern England on the way to Wales.

1200: Our first stop in Swansea is the home of Chris Walsh. He's got a 20Mbps Virgin Media broadband line and seems pretty happy. Both Virgin and BT will be bringing fast connections to urban areas like this over the coming years as they roll out their fibre networks. That should mean 70% of the country gets a decent connection.

I decide it would be rude to scoff any of Chris's broadband but checking the 3G speed on my phone I'm getting an excellent signal - around 1.5Mbps upload or download.

1500: But just 10 miles up the road in the village of Felindre we're on the other side of Britain's great digital divide. Here they struggle to get broadband at all because many homes are too far from the BT exchange, and Virgin Media is never going to lay cable up the lanes here.

At the farm from which they run quite a sizeable agricultural contracting business, we find Howard and Julie Price, and we hear a long forgotten sound. The clicking and whistling of a modem tells us they are still using a dial-up connection to get online, and that means a wait of as much as 40 minutes if they want to download a chunky document or some photos.

Howard is not impressed by the argument that it's his choice to live in the wilds - he points out that the M4 is just at the bottom of the valley, and that his business needs broadband just like any other "it's an essential these days."

Then there's a strange coincidence. A van drives up and a man jumps out to tell me about his business which brings broadband to rural areas. Andrew England is scouting out locations to put up a mast so that his firm TFL can beam a wireless signal across the village, promising speeds of around 10Mbps. He tells me his firm can do the job much more cheaply than the likes of BT.

1800: Back in a Swansea hotel to edit our pictures I find that I'm also back in range of a decent 3G signal. So when 5live call wanting me to come on and talk about the prime minister's call for pages glorifying Raoul Moat to be removed from Facebook I decide on an experiment. Using the 3G network I call into the BBC studio via a VOIP application on a tablet computer. The audio quality is fine - if a little tinny - but I'm pleased to have pushed back the frontiers of broadcasting.

2200: We finish our edit and use the hotel wi-fi to send the piece back to London. Experience has shown that this can be a frustrating and time-consuming business. But this time the 65Mb file chugs down the pipe in around 25 minutes. Of course, with a 100Mbps fibre connection it would have got there in a few minutes, but we're happy enough.

0600: We're back in Felindre to broadcast live into BBC Breakfast. But with no 3G network, and no broadband to speak of, we are very grateful that a BBC satellite truck drives up, and points a dish at the sky. Then there's a hitch - London can't see our signal. We can't get on television for our 0620 slot, but find that the pub has just had broadband installed, albeit a very slow connection. We use their wi-fi to broadcast on 5live via software called Luci Live. It works, but with a three second delay on the line, which on radio feels like eternity. Luckily, by 0645 we have fixed the satellite problem and are on air with quality sound and pictures - another connectivity nightmare is over.

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The man standing on a step in his back garden seemed passionate about the internet and what it could do for his country. Addressing a collection of chief executives, some civil servants and a scattering of new web users, he promised to give Britain the fastest, best broadband network in the world.

So is David Cameron the first prime minister who really gets the internet? Or was he, to quote a former Conservative PM, "inebriated with the exuberance of his own verbosity" when meeting so many digital types in one place?

The event in the Downing Street garden was the launch of Martha Lane Fox's Manifesto for a Networked Nation with its audacious promise to get the whole of the UK workforce online by the time Mr Cameron has to face the electorate again.

First, the PM met several members of Ms Lane Fox's Digital Task Force, people who've learned to use the internet in recent years. They sat around the cabinet table telling him their inspiring stories. People like Emilyn Hutchinson, who started using a computer at a shelter for the homeless when she was 17 and is now studying for a degree, or Jackie Seer, who set up an online community support network for people living on her estate in West London.

Then his techie credentials were burnished by his Culture Secretary Jeremy Hunt who told the guests that the PM was the proud owner not only of a blackberry but an Apple iPad - Mr Cameron later confirmed that he sits surfing on the iPad via a wireless network in his Downing Street flat, while watching television. But even Mr Hunt may have been a little taken aback by his boss's subsequent promise to take Britain right to the top of the world broadband league.

The government's recent pledge to deliver the fastest broadband in Europe - which I compared to taking West Ham to the top of the Premiership in five years - already looked a bit of a stretch. Now, apparently we are going to go speeding past South Korea - according to a recent speech by Jeremy Hunt, the UK is currently ranked 33rd in the world when it comes to broadband speed, with an average that is nearly five times slower than that in South Korea.

This Thursday the culture secretary has summoned Britain's major telecoms businesses to an event where they will thrash Britain's broadband future. On the agenda are two pressing matters - first, delivering the minimum 2Mbps coverage promised across the country by 2012, then working out how to build a next-generation network of super-fast broadband which will reach the third of the country that the market will probably ignore.

The broadband suppliers are already sucking their teeth about the cost of laying fibre to every farm - and warning ministers that it will cost more than the few hundred million pounds that they have budgeted. Now it seems the PM wants them to show that Britain can be a world champion.

I have just done a quick search through the BBC web archive and came up with this article from 10 years ago. The prime minister then said he wanted the entire population using the web by 2005, promised that Britain would lead the world in e-commerce, and that all government services would be delivered online.

Now David Cameron does seem a lot more at ease with technology than Tony Blair ever did. But before we decide that he's our first iPM, let's see where we stand in the world broadband league a few years from now.

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Who could argue with a plan to get 10 million people online to enjoy the social and economic benefits already available to other users of the internet? And who could fail to be impressed by the passion with which Martha Lane Fox is pursuing this cause? But, confronted with her Manifesto for a Networked Nation which she's presenting to the prime minister today in her role as UK "digital champion", the cynics will have a couple of reasonable questions - should we really be forcing people online if they've no interest in the web, and where's the money to make this happen?

The manifesto puts forward a convincing case. It shows that, of the 10 million people who are not online, four million are amongst the poorest in Britain. Unsurprisingly, it's people over 65 who are least likely to be online - but a telling graph in the document shows that just under 50% of these "nonliners" earn less than £11,500 a year. The pledge now is to get everyone of working age online by the end of this Parliament, so that they will be able to compete more effectively for jobs when they're in the workforce, and enjoy the benefits of the web once they retire.

But quite a high proportion, when questioned in a recent survey about why they didn't use the internet, said simply "it's not for me". So why force it on them? Well, the document goes on to make a social and economic argument that getting everyone online will benefit both them and the nation.

It says 90% of new jobs require basic internet skills, and a lot of those jobs are only advertised online. It points out that households that are online are getting better deals from retailers, banks and utilities. Children who have internet access at home do better at school and their parents are able to communicate more effectively with teachers - though I'm not clear whether enough research has been done to prove this. And for a hard-pressed government, delivering services online could provide a better quicker way to reach people, and could save money, if it's done correctly.

There are plenty of statistics sprinkled across the report - "if just 3.5% of unemployed non-internet users found a job by getting online it would deliver a net economic benefit of £560m" - but one number seems to be missing. I can't find anywhere an estimate of what it will cost to achieve the manifesto's pledge by 2015.

It's clear that Martha Lane Fox is hoping that much of the work can be done by the private and voluntary sectors. She's asking firms to come up with packages that would enable people to get online for an upfront fee of around £50, and says people should be able to get "easy and affordable" access to the internet, in the same they get access to water, electricity or gas.

There are also, she believes, plenty of things the government can do to encourage wider take-up of the internet which don't involve spending money. Controversially, some of them may involve making some services available exclusively online, giving people no alternative but to use the internet.

But it's hard to see how the pledge of universal web access for the UK workforce - which may well be backed by the prime minister later today - can be fulfilled without some government money. The trouble is, one of the key areas for spreading the message, the education system, is facing severe cuts in its capital spending.

Little noticed in last week's announcement about the ending of the Building Schools for the Future scheme was the fact that 10% of the money in BSF projects is ring-fenced for ICT schemes. Now we've seen that a lot of that money hasn't perhaps been spent very wisely in the past - but some of it has gone towards Home Access schemes which bring computers and an internet connection to poorer families. It's not clear to me now what happens to these schemes, and to local authority-funded internet centres which are helping to teach people about the joys of the web.

So while we will hear plenty of warm words from Downing Street today about the importance of digital inclusion, listen out too for any mention of money to make it happen. Still, in Martha Lane Fox they have appointed someone who won't be afraid to go public if she sees any backsliding. On Twitter yesterday she mentioned a conversation with a journalist about her Manifesto For A Networked Nation. The journalist was apparently "v int. in what govt will do diff. and when" and Ms Lane Fox's response was "me too. wont let them wriggle :) ".

Mind you Martha, if by 2015 your manifesto has proved to be full of empty promises, we won't let you wriggle either.

PS.I discussed these plans on the Today programme this morning before Martha Lane Fox was interviewed about them.

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What would it cost to create and run a government website for three years?

How does £105m sound?

After we covered a couple of stories about government spending on websites and iPhone apps someone got in touch to suggest we take a look at one particular site, businesslink.gov.uk.

The correspondent said this site, run by Her Majesty's Revenue and Customs (HMRC), had cost £35m a year to build and operate for three years and suggested that it had been poor value, delivered an unsatisfactory service to users and proved technically shaky.

I could not quite believe that figure - it sounds an awful lot of money for one site
but it turns out to be true. Businesslink.gov.uk was among the sites singled out last week by the Cabinet Office as very expensive in terms of cost per visit.

When I went to the lengthy document [941.60KB PDF] in which the Central Office of Information (COI) examined central government websites, I found that £35m staring out from a table.

Only the NHS Choices site, at £21m, comes anywhere close. But it has around six million unique users a month, whereas the Business Link site, which offers all kinds of advice to businesses, has just over a million.

The site is the work of a major outsourcing company called Serco, which has sub-contracted the technology to a little business called BT. So how do the costs break down?

The COI report has some detail - £6.2m on strategy and planning, £4.4m on design and build, £4.7m on hosting and infrastructure, £15.3m on content provision and £4.5m on testing and evaluation. What I can't work out is why that cost is repeated for three years.

But I freely admit my knowledge of website development is sketchy so I consulted a couple of experts. One had helped build a customer support website for a major retailer, to cope with similar traffic to that experienced on the Business Link site. That had been built in-house but a supplier had quoted roughly £1.5m to build it, plus £150,000 in annual running costs.

Then I went to Sean O'Halloran at a firm called Hoop Associates which builds websites, mainly for public sector clients. So what was his reaction to that £35m?

"It's a completely unfathomable number, I can't imagine how that could be spent." Mr O'Halloran had an interesting theory though, he claims that government departments are still locked into a big supplier, technology driven way of thinking when it comes to building websites.

"Most of the big sums go on the technology, which is wrong. They should first work out what they want to deliver, then source the technology." He said that these days there were plenty of cheap or even free sources of technology that did not involve going to big companies, but that civil servants felt more comfortable dealing with the kind of suppliers who have always been involved in major IT projects.

To be fair, the creation of this website was driven by the small business community, which thought that the old Business Link network of offices across the country was a waste of money.

Firms told the government they wanted this service delivered online, and the Federation of Small Business told me its members were pretty happy with the results, though they were not aware of the costs of the site.

HMRC and its supplier Serco also put up a robust defence. HMRC said the businesslink.gov.uk site delivered benefits of over £800m a year to companies - a huge return on the £35m invested. I always wonder how those kind of figures are worked out, in the public or private sector.

Serco also cites that £800m figure and goes on to say that it has continually looked for efficiency savings since winning the contract in 2005, and these have amounted to £44m so far. And it's promising more:

"We recognise the unprecedented fiscal challenges facing the nation and we welcome the opportunity to work with Government to continue to deliver even greater efficiency savings."

Earlier this week we reported on the sums being spent on government iPhone apps - which now look really good value compared with the lavish spending on websites.

But there does seem to be a troublesome culture in the public sector when it comes to using technology, whether it is in Whitehall or across the education system, or in the National Health Service.

It seems to involve deciding that you need the latest thing - a smartphone app, a wireless network for a school, an interactive website for small businesses and then putting the job in the hands of a technology supplier, preferably a big and expensive firm. The complex rules on public procurement make it easier for big established - and expensive - firms to win the contracts.

But another culture is now making its presence felt in Whitehall, the open data movement. It involves releasing the vast amounts of data locked inside government departments and letting anyone who wants to hack it into something useful for nothing. Perhaps, in these straitened times, it's this culture which will now thrive.

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Last week the government announced that it wanted to close many of its websites to save money - but should it also be looking at what it spends on developing applications for smartphones?

A BBC freedom-of-information request sought to find out just how many iPhone apps were in development by government departments. We discovered that there were at least six apps, some of them out already and others still in development.

The apps include three from the Department of Health, a quit smoking app, a drinks tracker which monitors your alcohol consumption, and, released in time for the World Cup, the Football Fan Fitness Challenge.

The Foreign Office has a travel advice app, and the DVLA is developing something called Motoring Masterclass, which will apparently show you how to change a wheel, charge spark plugs and other useful motoring advice. The documents released about this show that it will cost £40,000 to develop.

The Department for Work and Pensions has Jobcentre Plus job search for both iPhone and Android phones, developed at a cost of £32,775 plus VAT. The DWP says this had been downloaded more than 50,000 times after 10 weeks on Apple's App Store.

Intriguingly, the Home Office responded to our request by refusing to confirm or deny that it was developing any apps, citing security grounds which absolve it from supplying some in formation under the FOI rules.

We are left to speculate that boffins at the Home Office are developing a secret app to be used by MI5 or Special Branch, perhaps using facial recognition technology.

Now all of these apps are free to download, so is this really a great use of scarce government cash? You might argue that it is an excellent way for government departments to use the latest techniques to get important messages about health, work and transport issues to citizens.

But do people who can already afford a very expensive device really need free help from the government to find a job or quit smoking? One government department pointed out to me that these apps were developed under the previous administration - so don't be surprised if the coalition decides that apps are a suitable case for the axe.

Update 6 July 0800: It appears that there is indeed some scepticism about iPhone apps within the new government. The Cabinet Office sent me this statement:

"The Government recently announced a freeze on all marketing and advertising spend for this year and this includes iPhone applications. While the Government wants to ensure that information and services are available in the most efficient and convenient forms, future spend on iPhone development will be subject to strict controls: only essential activity, approved by the Efficiency and Reform Group, which is chaired by the Minister for the Cabinet Office and the Chief Secretary to the Treasury, will be allowed."

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How is the venture capital scene for dotcom start-ups in Britain?

Hopeless, is what many a young entrepreneur will tell you, as they struggle to keep their businesses afloat without support from investors.

But two new businesses in the UK have proved in recent days that you can get funding if you have the right idea.

The online fashion site My Wardrobe today announced that it had won £6m of funding, in a round led by the European venture capital firm Balderton.

My Wardrobe was started just four years ago by Sarah Curran, who once worked as a sub-editor on Times Online and then set up a real world fashion boutique in North London.

The UK has two other prominent online fashion retailers, ASOS and Net-a-Porter, but My Wardrobe has grown rapidly and its founder believes there is plenty of room in the market for all three.

"They're all targeting different audiences," she told me. "ASOS is very much late teens to late 20s, My Wardrobe is late 20s to 40 plus, and Net-A-Porter is 30 plus, high disposable income."

Unsurprisingly, Sarah Curran is far more positive about the venture capital scene in Europe than many entrepreneurs, but she says you have to be at the top of your game when you seek funding: "if you are passionate about your brand, you know your space, you know your product you know your business inside out, then people are far more receptive."

She admits that when she visited venture capital firms a couple of years ago, she did not find it easy to get a positive hearing. "A lot of the time I was still having to defend online shopping. I think now it's far more accepted."

The sale earlier this year of Net-a-Porter to a luxury goods group in a deal estimated to be worth £350m has helped investors see the value of online retailers.

The My Wardrobe founder says you also have to be at the right stage of your development when you approach VC firms - her business had its first month of profitability last November.

That's a lesson repeated by another UK success story. "You need to be aiming for a large exit and be addressing a big market," says David Langer, fresh from a fruitful encounter with Index Ventures.

He and some fellow Oxford students started a business called GroupSpaces three years ago, which helps anyone with a club or a society organise its activities online.

It now has thousands of customers, ranging from sports clubs to churches, with more than half a million members between them.

What's more, unlike most online businesses, it's not entirely dependent on advertising - groups have to pay for the service once they have more than 250 members and GroupSpaces also earns revenue from handling payments.

Last week GroupSpaces announced that it had secured $1.3m in funding from Index Ventures and a consortium of angel investors.

So David Langer too is optimistic about the UK venture capital scene, though he admits that it's still harder to get funding here than in Silicon Valley: "You need to prove certain things before you're in a position to raise money in the UK, which may be different to Silicon Valley where you may need fewer proof points."

Location still matters - Silicon Valley venture capital firms, with far more capital to dish out than their European counterparts, are unlikely to look very closely at firms which do not have at least an office in California.

But every time a My Wardrobe or a GroupSpaces gets funded, the outlook for other UK web firms gets just a little brighter.

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It looks like one of the more embarrassing foul-ups from a major technology company. First, mounting complaints about the signal problems with the iPhone 4 are mostly dismissed by Apple, with Steve Jobs advising "don't hold it that way". Now the firm has sent out a letter saying it's discovered why there's what it describes as a "dramatic drop in bars" when users hold the phone in a certain way.

It turns out that throughout its history, the software used by the iPhone has been exaggerating the strength of the signal. "We were stunned to find the formula we use to calculate how many bars of signal strength has been wrong," says the letter.

It goes on to explain that iPhone 4 users who've seen their signal drop away from five bars to nothing may actually have been in an area where they were lucky to get any signal at all. Now Apple is promising a software update for all users which it says will give them a much more accurate read-out of reception.

Many people who have owned an iPhone from the beginning have had frequent complaints about dropped calls and poor reception. Now they've found out that the phone was exaggerating its capabilities all along. They are entitled to ask why it has taken Apple three years to work this out.

Apple ends its letter with a reminder to any customers who aren't satisfied with the iPhone 4 that they can return it and get a full refund within 30 days of purchase. One of the networks, O2, says it gives customers a 14-day cooling-off period.

So will this episode have a serious effect on sales of Apple's latest gadget? I doubt it. I walked past an O2 store this afternoon and found a long queue snaking its way out of the door and around a corner. I asked a few people whether they had come to return their iPhones, and they looked at me as if I was mad. "We're waiting to buy one," they said. It may have trouble making phone calls, but the iPhone's fans are so bewitched by its other capabilities, they seem prepared to ignore that.

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So the great experiment which could determine the future of the news industry has begun. Head over to the Times website today and, at first glance, nothing has changed. You can see the front page, with the headline "Husband of 'femme fatale spy' speaks out". But click on the story and you're presented with a page inviting you to pay up.

There's a special offer at first - you can get access for 30 days for just £1. Thereafter it will be £1 a day or £2 a week. So here's the $64,000 question - how many will choose to pay and what will be deemed a success? We already know that about 60% of an audience of some 21 million online readers have melted away in the month since they were asked to register before getting access to the Times and Sunday Times websites.

That's actually not a bad result - the sheer irritation of having to register could have put a lot more people off. Times executives have made it clear they expect to lose at least 90% of their online readers and probably far more. The truth is that if just 5% of the old online audience stayed - that's about a million people - the champagne corks would be popping at Wapping.

There would be plenty of subscription revenue - £100m a year if all those people were opting for the £2 a week option. What's more, they will be extremely valuable to advertisers because, rather than being random visitors passing through for a couple of pages, they will be identifiable, and no doubt prosperous, readers who've handed over some details about themselves.

But will they come? Having wandered around the Times site - courtesy of a backstage pass - it's not immediately apparent that there's enough of the kind of compelling content that is not available elsewhere. There is the promise of extra goodies for subscribers, but they are certainly not much in evdience. It is a very attractive site, and I would certainly miss being able to read - and share - the work of some of the excellent columnists working on the papers.

My suspicion is that the main problem with this experiment is what I'd call friction. Web users have got used to clicking simply from one page to another without hindrance. Any element of friction - the aggravation of having to pay or just log in - acts as an incentive to head elsewhere in a hurry. I tried an experiment this morning, posting a link on Twitter to an article by the very funny Times columnist Caitlin Moran. Plenty of people clicked on the link - but when they were taken directly to the Times pay-station, they all appear to have left without paying.

The old advertising slogan was "Top People Read The Times", and the newspaper group appears confident that plenty of top people still value its journalism to pay for it online. The rest of the news industry is sceptical - but, to use the oldest journalistic cliche of all, only time will tell.

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