Blog Post

Digital Britain Scorecard: So How Did Lord Carter Do?

January’s interim Digital Britain report fell flat, like jelly on lino, because it lacked detail and certainty. We joined the criticism – but, perhaps we forgot at the time, all policy is iterative, consultative and must start somewhere. January was Lord Carter’s opening gambit; he took the industry’s pulse and, whilst the wide-ranging report can’t cure the whole sector’s ills, in the final version (see our reports), he has made in-roads on a broad number of key topics. Overall, in fact, we give him a 7 out of 10 – here’s why…

Broadband

2Mbps guarantee – 8/10: If that 2Mbps guarantee looks paltry, know this: Digital Britain wasn’t about VOD or IPTV as much as giving a high enough percentage of citizens basic enough connectivity that will allow Westminster to stop running off so many leaflets and start moving public services online – for, the government is the UK’s second biggest-spending advertiser. Regardless, demand issues aside and whilst 2Mbps is relatively slow, by bringing the 10 percent of “notspot” homes on to the network Carter is aiming to close what has already become digital divide.

Implementation – 4/10: We only wonder how this will come about. Carter is leaving roll-out entirely up to a new Network Design and Procurement Group, who would presumably hand-pick telcos for the job from bids. But whether the government can simply pass these funds to telcos is questionable under European state aid rules and, right now, Carter has only a partial estimate of available funds of £200 million – not including contributions from a swathe of commercial and public bodies ranging from telcos to the NHS. By earmarking funds from a supposed “underspend” in the BBC’s Digital Switchover Help Scheme, he has both ill-defined the available capital and angered the BBC Trust.

Super-fast broadband – 7/10: Despite focusing precious little in January on the next-generation networks that will truly accelerate UK connectivity speeds, Digital Britain has hit on a creative way to encourage telco investment in speedier infrastructure for the same people currently missing out on 2Mbps. Charging a £0.50 per month levy on the old, copper phone wires may be interpreted by some as a “tax”, but the telcos need incentives to make the investment and the proceeds could be bid for by any operator to part-subsidise their next-gen roll-out. With 17.3 million residential broadband lines in use at the end of 2008, this could generate over £103.8 million per year – but it will be much more by the time the fund is created in 2010.

Intellectual property

Encouraging legal downloads – 4/10: Carter restates opposition to flagrant IP abuse and gives successful services like Spotify and Hulu a pat on the back, but the aim of “a series of commercial agreements and business models that give the consumer or the fan highly affordable and convenient content” still sounds like wishful thinking, while the plan to issue “persuasion and information … with straightforward advice and do’s and don’ts” reads like a school sex education pamphlet. Except that Carter is actually giving industry what it wants – the freedom to try new business models for itself. With this hands-off approach, at least government can’t be blamed if the business still can’t develop attractive reasons to pay for content. In the meantime, Carter is allocating £10 million for a project to help companies test out new monetisation methods.

Warnings and blowing the whistle – 6/10: Carter is placing faith in research like that from EMR and Leading Question that found most illegal freeloaders would stop after receiving a warning. By formalising the process under which ISPs warn customers, he is merely following available evidence – but what if the survey respondents don’t quit like they indicated? That Carter is putting ISP measures like bandwidth throttling on standby if, after a year, the warnings alone haven’t worked shows both how uncertain he is that it will actually succeed and how much patience he is giving to the arms-length idea that industry can police itself.

The Rights Agency – 7/10: Turns out the mysterious body would join ISPs and rightsholders to draw up the code under which Ofcom would order ISPs to act. Again, that’s simply passing the baton to industry – hats off for the hands-off approach but, if everyone couldn’t reach a consensus in time for Digital Britain, what makes anyone think they will under a new agency? And does Ofcom really want to extend its broadcasting remit to ISP anti-piracy investigations?

IP reform – 5/10: No “fair use” copyright clause like that in the US (Carter says it’s difficult in EU law) will disappoint many, but allowing re-use of content for whom a copyright holder can’t be found will place more works in to the public domain. Extra points for ruling out (for now) a law, like that in some European countries, which charges a levy on gadgets that can record or format-shift content – but points deducted for asking Ofcom to assess whether such a law could work in the UK, leading to higher prices on electronics.

Broadcasting

Funding for new Channel 3 consortia – 9/10: ITV (LSE: ITV) has already admitted regional news is becoming unviable so making funds available to new groups who want to replace it could unleash a refreshing, eclectic new patch-work of multimedia news providers around the UK, from GMG and ITN to S4C Bob Geldof’s Ten Alps. These major players are interested, but there’s also an opportunity for smaller, local players, who must step up now before their voices are drowned.

BBC/Channel 4 – 7/10: Carter must walk a tightrope, ensuring that he doesn’t damage the BBC as he takes from the licence fee for other projects. In reality, though, where else will the necessary funds come from (the next-gen broadband already has a levy introduced)? The vision for C4 as “the open new media authority providing the seed-corn for creative innovation in the multi-media world” excitedly puts it back at the online forefront, but the preferred BBCWW tie-up is far from decided upon.

Newspapers

Cross-media ownership relaxation – 7/10: The OFT’s decision, after Carter’s invitation, not to relax competition law to ease consolidation will go down like a lead balloon with hard-pressed publishers, but the OFT has agreed, when a merger case comes up, to seek an Ofcom assessment and Carter is asking the Audit Commission to calculate the effect of council-run newspapers. Coupled with Ofcom’s own ongoing review of media ownership rules, there could be some scant consolation for struggling local rags.