Digital Britain: well intended but devil in lack of detail

Last Thursday the UK's first communications minister, Lord Stephen Carter, published the much-anticipated report Digital Britain - a plan to secure Britain's place at the forefront of the global digital economy. It portrays the sector as a ray of hope in an otherwise bleak economy and proposes 22 recommendations to make the digital network the backbone of the economy in the same way that roads and railways have been in the past. Lord Carter rightly identifies the need for a comprehensive programme for Digital Britain, although at the moment he seems unsure of how to deliver one.

More thinking needed before the final report in the summer

On Wednesday the IMF warned that Britain is set to suffer the worst recession of any advanced nation during the current downturn. As such, any measures designed to stimulate sectors of the economy must be timely and credible. This means taking the right long-term decisions now to secure a competitive future.

The UK government now has an opportunity to move away from a reliance on the financial sector and make the broadband network the backbone of the economy in the same way that roads and railways have been in the past.

In this respect, the UK is already behind other countries in both Europe and the rest of the world. For instance, the Irish government recently launched a national broadband tender, and the Portuguese government has committed to investment in fibre rollouts. Digital Britain (perhaps unfairly) is seen as the UK's answer to an Obama-style stimulus package. However, on seeing the interim document, the UK is at risk of substituting yet more reports for action.

No fewer than eight new reports will come out of Lord Carter's initiative, with responsibility spanning across three institutions: the Department for Culture Media & Sport, the Department for Business, Enterprise & Regulatory Reform and Ofcom. The government must ensure that Digital Britain doesn't become merely a series of reviews, reports and consultations, but instead is a convincing roadmap for action. The priority should be a focus on spectrum and next-generation access (NGA), after which many of Lord Carter's other objectives become easier to achieve.

Ubiquitous broadband possible by spectrum reform

While the report is characterised by the things it doesn't say, many important roadblocks have at least been acknowledged - in particular the delay to spectrum re-farming and allocation of the digital dividend. A new Wireless Spectrum Modernisation Programme will seek to resolve the re-farming dispute, and if a voluntary solution amongst operators does not emerge then a government-imposed resolution could unfold. With the digital dividend, now would have been an ideal opportunity for the UK to join those other countries that have advocated harmonising the 790-862MHz band to be used for mobile broadband - instead this issue will join the bulging to-do list for the summer.

These unresolved issues could have far-reaching implications for the ubiquity of broadband, since it is hard to define a new universal service obligation (USO) until such spectrum issues are resolved.

Lord Carter's words on the USO perhaps highlight one of the greatest flaws in his report, and that is the lack of attention the government is paying to developments in the sector at the EU level.

 

The current review of the USO Directive being led by the European Commission, despite having been subject to many delays, is likely to produce a proposal in 2009 with an option for legislating in 2010. Any proposal that the government puts forward will have to take into account a change in this Directive.

A missed opportunity to provide regulatory certainty

The European Competitive Telecoms Association (ECTA) recently highlighted these fragmentations in its annual regulatory scorecard and suggested that policymakers should ensure that the EC and national regulators work more closely to translate good intentions into consistent actions. One area where the need for this couldn't be more clear is NGA.

As Francesco Caio concluded last year, while now doesn't appear to be the time to make public money available for next-generation fibre access networks, there is still a role for the government to play - in particular by making available ducts and other physical access to develop a wider wholesale market. However, disappointingly, Lord Carter didn't consider how this or indeed other aspects of NGA should take place in a wider European context. Increasingly, this fragmented approach is impairing the ability of global telecoms operators to deploy Europe-wide services and is hence delaying important investments.

Matthew Howett, Analyst