When all the bluster is taken out of the new UK government’s Digital Britain plan, the interim report of which was published this week, there’s precious little left.
The US broadband plan, funded by the new Obama Stimulus package, which includes a $10 billion fix for broadband, goes further and similar strategy plans for France and other European countries are considerably more advanced. But it all sounds very good.
That is until you strip away what’s already been decided, and carve out that which is inevitable. What’s left is a lot of actions that the UK government is going to ‘look at,’ and almost no actions that it is actually planning.
It is, after all, an interim report. It has established which areas are going to be considered by the Labour government, but it is unlikely that very much of the plan will ever be achieved during that government’s lifetime.
The plan contains a 22 point list of items, and here we can go over them point by point.
It says that the government will form a strategy group to remove barriers to adopting Next Generation broadband. Which means the government will try to accede to lobbying from major corporations to take hurdles out of the way, probably by giving tax breaks and not letting rivals use incumbent’s networks.
It says that the government will work with main operators to remove barriers to wider wholesale market. This is the opposite, it means that wholesale access to all the broadband networks should be offered by the major corporations. Unbundling at the local loop will provide a model to approach this, which relied on interventionist pricing by Ofcom. Expect that to lose its teeth somewhat by the time this shakes out. You can’t ask everyone to invest in broadband and then force them to share lines with rivals.
The report also says the Governments will clarify if business rates will apply to premises used for broadband operations ‘ again the offer of another incentive here and the idea of other public incentives is raised, as if to say ‘If the large existing broadband suppliers don’t play ball, we can offer money for others to compete with you.’
One of the biggest areas is the approach to using wireless to help provide universal broadband around the country, and the bribe here is that cellular networks are likely to be allowed to keep their 2G spectrum, which they should currently all be vacating, as long as 3G and other spectrum is built out to reach the areas that 2G has finally reached ‘ virtually every home in the UK. The fact that this has long been lobbied for and was always on the cards, makes this not news at all. Similarly the delayed auction of the 3G expansion band at 2.6GHz, which the review mentions, has to be thought of as overdue and possibly not needed if the 2G spectrum is re-farmed.
The Government says its will also push its regulator Ofcom to play a key role in a pan-European alignment of the Digital Dividend Review Spectrum. There has been something of a haphazard approach to just how much spectrum will be allocated to broadband applications and just how useful it is, and each major European country has come up with its own plans. This was never going to work and this needed to be rationalized, and Ofcom would always have taken the role to speak for the UK ‘ so there’s really nothing new in this either.
Also on the wireless front future spectrum licenses could be made indefinite. In the past these have been allocated for 15 years usually, with a chance (but not a commitment) of being renewed. This will involve some price promises from service suppliers, but would suit existing cellular franchises. The idea behind this is or a government to get just as much back from an ongoing use of spectrum over the years of usage, instead of getting it all up front from an auction. At present finite timed spectrum creates a disincentive to invest once a network is more than 10 years old.
Finally or wireless the sharing of core networks ‘ backhaul and Radio Access Networks (RAN), which are in advanced planning across all of Europe, will be encouraged by the Government, especially on existing 2G networks. Another thing that was going to happen anyway.
One radically new proposal is perhaps the idea that the Digital Television Switchover Help Scheme, which is like the US plan for paying for digital TV adaptors for poorer homes which cannot afford the Digital TV transition, might be extended to include set tops which have a return path, so they can plug directly into a broadband line.
The UK has set aside £603 million ($857 million) for this scheme, funded through the TV License fee, but could set aside more if these were broadened to include a broadband connection to a set top. The only company that would benefit from this immediately would be the incumbent BT which has a service which relies on this, although both Sky and Virgin media the leading DTH and cable operations in the country could clearly adapt their strategy to take a piece of this government handout.
The other big news was that the government wants to take on piracy through the Digital Britain document, talking about introducing a rights agency to come up with a plan to prevent piracy (haven’t we had enough time to do that already?) and work out new ways ISPs can work with rights holders to rat on potential pirates. This is now old hat, both in other countries and the UK, but this is closer to the current position in the US where ISPs are ow helping out.
Another pro-big company move is to come up with a set of legal terms that will result in independent content producers to offer multi-platform rights to broadcasters. At present broadcasters don’t automatically gain rights for DVDs, never mind online uses of content, and the idea is to make it clear that content owners will share the revenue where these are offered up. But the likely outcome is that content owners will just wash their hands of exploiting their content online, and big broadcasters will continue to develop a stranglehold on content, and a unified way of exploiting it, which in our view will lead to a stultified approach to online content provision, rather than innovative and original approaches which new companies bring.
There is a plan for a second BBC, some talk about a universal service obligation (it has to be available to everyone) for broadband, initiatives to advertise the benefits of broadband and educate the public about its benefits and a commitment to web 2.0 from government departments. There is also talk about preserving local communities online, and to explore business models other than simply advertising revenues for online video.
In summary nothing has changed except that a man who is rather knowledgeable about the digital landscape (Lord Carter) has pretty much described what’s going on in that landscape. Let’s hope that the next and final version, due out later this year, will come up with something concrete that can go through the legislation process.