Broadband News

The Digital Britain report is out at last and there was a proverbial rabbit in the hat for Lord Carter to pull out; a 50p per month tax on telephone line connections to raise roughly £150m a year to push back the geographic barriers of faster web access.

Other than that, the report was largely as expected apart from, notably, the idea of a rights body, representing ISPs and intellectual property holders, appears to have been kicked in to the long grass with Ofcom instead being empowered to act if ISPs do not cut piracy through polite letters to offenders, followed by bandwidth throttling and termination.

Switchover leftovers

As expected, any underspend in the fund to help the digital television switchover proceed smoothly is to be earmarked for investing in next generation networks where there may not be a strong commercial imperative for providers. Nobody knows how much may be left over but figures suggest it could be as much as £100m to £200m.

At the same time the BBC is facing part of the licence fee being handed out to commercial local news organisations to ease their financial burden. While the BBC made no claim on unused digital TV switchover money, the BBC Trust was unusually fierce in its criticism of part of the licence fee going to commercial operators and the corporation being used for political aims.

“The licence fee must not become a slush fund to be dipped into at will, leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day,” blasted the BBC Trust’s Chairman, Sir Michael Lyons.

“This would lead to the licence fee being seen as another form of general taxation. The Trust will not sit quietly by and watch this happen.”

Be: Phone tax plans too cautious

Whilst that remained the most outspoken criticism of the day, the aim of the £6-a-year levy on phone lines “to ensure homes in the most rural and isolated parts of the UK will have access to the fastest provision possible”, caught the eye of Felix Geyr, Managing Director at Be Broadband.

While many commentators, perhaps not reading the full detail of the 200-odd page report, have jumped to the conclusion the tax will fund an exciting fibre roll out, he believes this is not as brave as the government could have been and could see people being offered basic broadband in hard to reach areas.

“We’re not against the levy, but it would have been Be’s preference for this investment to have been put into providing the next generation of broadband,” he told SamKnows.

“As a specialist broadband provider whose members have a clear need for higher broadband speeds, we will continue to invest in our networks to provide tomorrow’s broadband and are keen to hear the Government’s plans for investment in this area.”

Virgin Media: Happy with distinctions

This was not so much of a concern for Virgin Media who, as one might expect from a fibre provider concentrating on areas of highest demand, was pleased to see the government acknowledge that low demand areas need separate provision.

“The government is right to focus on Digital Britain, not just digital cities,” a Virgin Media spokesperson told SamKnows.

“The government has a potentially useful role to play in supporting and promoting network investment in those areas of the country where it's clear the market won't provide and, at first glance, its proposals seem like a balanced response."

Piracy: Opportunity missed?

Before the final report was delivered yesterday, Lord Carter had talked about setting up a rights body between ISPs and content owners which would formulate guidelines and fund policing the web.

This never materialised in the final report, the government is to consult on, and then hopes to pass, a law that will compel ISPs to cut piracy by 70%, within a year of the law coming in to force. This will be backed up by legal provision for Ofcom to insist details of serial infringers are collected and passed on by ISPs so legal action can be taken.

The reaction from Felix Geyr, managing director of Be Broadband is that this is largely what is happening anyway.

“Be has always complied with any legal requirements that get sent to us from the appropriate legal authorities,” he told SamKnows. “We will continue to do so with the announced requirement for ISPs to send warning letters to customers who regularly engage in unlawful downloads.”

TalkTalk: Onus should be on content owners

However, as ever with piracy, opinion is divided. TalkTalk is unimpressed with the continuation of a policy which it believes places an unfair burden on an ISP to effectively snitch on its own customers while placing no responsibility on content owners to protect their assets.

“The Digital Britain Report fails to acknowledge what almost every informed commentator knows; that determined filesharers will find a way around any technical roadblock that can be put in place,” a spokesman told SamKnows.

“Our position on filesharing has always been clear; we refuse to disclose our customers’ details unless the case against them has been proven in court.
“This remains our view and, while we’re pleased the report reflects this, we’ll be participating in the forthcoming consultation to ensure that our customers’ rights are protected. Technology is moving fast in this area and there are already a number of proven ways that people serious about file sharing can avoid detection.

“There is only one sustainable and practical solution to the problem and that is for rights holders to adapt their business model and make their content easy and cheap to access legally online.”

Social divide could still be there

Nevertheless, one must never forget the social inclusion spirit at the heart of the Digital Britain report which, amidst wrangling over piracy and other issues, can be forgotten. John Pull, founder of dystalk, a help site for people living with dyslexia, and their families points out that wider availability of higher-speed broadband is essential if important information is to get out to people across the country and not just to the cities. He reveals that people in rural areas visit a third fewer pages and a spend a third less time on the site. He believes this is down to the site concentrating heavily on video content. Whilst he believes the Digital Britain report is good in theory, he believes it may not speed up the net sufficiently for all to enjoy basic video services and so the social divide will continue.

“Many 2Mb packages in reality provide the user with much slower download speeds than this, and for sites like dysTalk that have a lot of video content this simply isn't fast enough,” he says.

“More encouraging is the recognition that it would be "undesirable" for the "final third" of homes to be left without superfast next generation broadband. However, the tax they have proposed to pay for it looks like it will fall far short of what will be needed to implement the requisite infrastructure even with the support of a private provider such as Virgin Media. People in rural areas shouldn't be holding their breath for the arrival of superfast internet anytime soon."

Deloitte asks: Is there a market?

A final point should be left to Chris Williams, Media Partner at Deloitte who posed a very simple question to SamKnows. Amidst all the excitement and controversy over rolling out super-fast fibre broadband networks to wider areas, will there actually be sufficient demand?

He points out there is ‘no guarantee’ of take up. His overriding advice is that network builders talk to media and technology companies to ensure there is a compelling service. “Online services need to offer something new that the customer will value significantly above today’s alternatives - to drive a desire for increased bandwidth,” he insists

Hence he predicts the rosy picture everybody paints for fibre is not guaranteed and that supply does not necessarily build its own demand. Regardless of how the money is found and the regulations are laid out, if people do not see faster, fibre access as a ‘must-have’, its future remains unclear, he insists.