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Ovum: "a poverty of ambition" in Carter Report for broadband Britain

By 2012 all of Britain will be able to access a broadband connection with a minimum speed of 2Mbps through a universal service commitment. It will be funded mostly from £200 million of public funding, but will be supplemented by wider mobile coverage obligations on mobile operators.

Whilst attractive to people who currently don’t have a connection or anything like 2Mbps (an estimated 7% of the UK), it is still quite significantly below the current average headline speed available in the UK (the report makes no mention of actual speeds) and in this respect a digital divide will continue to exist.

Unexpectedly, as well as the 2Mbps commitment, Carter also outlined proposals to guarantee superfast broadband for the one-third of the country that BT and Virgin Media are unlikely to serve. Under the plan, from 2010 all current fixed copper lines would be subject to an annual tax of £6, which will make up the Next Generation Fund. This will then be made available on a tender basis to any operator and will provide a part subsidy for the deployment of next-generation broadband.

Whilst a pleasant surprise, Carters plans appear ill thought out. Firstly, the model follows a similar approach to the one originally taken in Australia, which the government eventually abandoned in favour of building a fibre-to-the-home (FTTH) network itself after concerns that a fibre-to-the-kerb (FTTK) solution (most likely what the fund will enable) would not represent value to the taxpayer.

FTTK would mean speeds of up to 50Mbps by 2017 – hardly future-proof when compared to other countries.

Secondly, the introduction of a specific tax on fixed lines rather than using general taxation hasn’t been used elsewhere. It may have the effect of accelerating the pace of fixed-to-mobile substitution, which would only serve to reduce the size of the fund and provide a signal to the mobile sector and in particular to mobile broadband, which Carter admits himself is unlikely to deliver true next-generation bandwidth.

A lack of vision for the protection and promotion of digital rights

Despite attempts to ensure we all have access to the Internet, Carter also is ready to take it away.

One of the most contentious issues of late both in the UK and elsewhere in Europe has been the issue of illegal file sharing over the Internet and what should be done about it. The proposals have ranged from the outright banning of persistent file sharers (the preferred option in France) to implementing technical solutions to make the experience so dreadful that paying is the only option.

Britain has decided not to go down the “three strikes and you’re out” route, instead ambitiously expecting to reduce unlawful activity by serving written notification to the abuser and then informing the content owner of their identify for them to take further action. If this proves not enough to deter people then bandwidth restriction will be considered.

This might work in the very short term, but ways around the restrictions would soon be found.

It would have been more forward looking to reassess the whole system of digital rights and access to online content. Trying to apply 18th century rules in a 21st century world isn’t sustainable and will not foster the creativity that is expected to make use of the digital infrastructure. Expecting this approach to work highlights one of the report’s greatest weaknesses and almost fails to capture the debates that have been taking place, particularly around network neutrality.

It will fall to Ofcom to deliver on the recommendations

Whilst the imitative was likened to the building of roads and bridges of the past, it clearly lacks the scale, funding and ambition.

Leaving the criticisms aside, Lord Carter has evolved the way of thinking about the future approach to regulating the communications sector, and his departure from the department is a setback. Ofcom is very competent as an economic regulator, but it has been shown to lack the strategic joined-up thinking that some aspects of Digital Britain require.

The task now is to find solutions to the recommendations Carter makes, and in many instances this falls to the body that was already doing just that: Ofcom.

From Matthew Howett, Ovum senior analyst and leader of the regulatory service.