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Digital Britain: The Emperor has no signal

Broadband has failed because of our slack-jawed elites

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Ofcom's reluctant publication of a national 3G coverage map is a wonderful thing - it raises questions that politicians, business, the regulator and the Twittering media have swept under the carpet for years. If universal coverage is a common goal, as they all insist, then getting there is going to be very expensive and unrewarding. So much so, that it might actually be wiser not to bother.

Firstly, and most obviously, it shows how far behind Britain is in the broadband derby. We usually hear universal access discussed in terms of the "last mile" which implies that merely one more heave is needed. All we need do, that implies, is trek up to a remote peat bog, tap a crofter on the shoulder, and point him to the new mast with red flashing lights on top. Then all will be well. But the yawning great white expanses on Ofcom's 3G map show how false that is, because it's not just crofters who have a problem getting online. As one commenter notes:

Product: Vodafone Mobile Data dongle

Location: Wivenhoe, home town of University Of Essex

3G: unavailable

Vodafone 2G data download speed: 4 KB/sec

Price: £23.50 per month for 18 months

Shame on the networks for giving us lousy 3G coverage, with Hutchison 3G (who don't really have a choice) an honourable exception. It's only a few metropolitan areas who enjoy decent "mobile broadband"

But wait a minute - why would this be? Are telecoms companies salting away billions of pounds of profits in a great offshore lair, somewhere? Or are they merely reflecting the market's demand for data? Plain vanilla 2G is enough to make a phone call, and that's everywhere.

If the telcos are hiding anything, it's the level of their debt. They're broke, and running on empty (hence the nonstop rounds of refinancing), which explains their renewed focus on mature markets where they can squeeze higher revenues by diminishing competition. The UK is reckoned to be a full 10 per cent less profitable than other European countries, because retailers such as Carphone Warehouse are in the chain, and because of all this pesky competition. It's true that the 3G auctions didn't help, either, sucking £20bn into Brown's piggy bank, and onto quangos like, well... Ofcom.

But this skirts around the main issue - which is that outside the metropolitan areas, the demand for data simply isn't there. We always knew retail data wasn't profitable, and expected data to be subsidized by voice (for mobile) and value-added services.

What we now know, thanks to the 3G map, is just how expensive building out a broadband infrastructure will really be. What it shows us is that the definition of "rural" is much broader than we supposed. An analysis conducted for the Broadband Stakeholder Group last year put the cost of rolling out fibre to every home at almost £30 billion.

During the media orgy of coverage around Carter's Digital Britain report two weeks ago, I only heard one journalist ask the obvious question: why tax all of us for something that 70 per cent of people don't want. That was Jeremy Paxman on the BBC's Newsnight, apparently waking up from a deep slumber.

But it was a lone voice, and I didn't hear anyone - not a single one - go any deeper and follow this to its logical consequence. Which is that maybe people aren't stupid, as the political and media classes suppose, and many find what's on offer from the internet somewhat wanting. Maybe it's not offering compelling services.

Note that TV and radio never had this problem - they did offer something new and exciting, and people rushed out and bought sets without the need for a government subsidy, or patronizing "media literacy" classes. (The original radio license fee predated the creation of the BBC by 20 years). If we assume that people are sentient, rational creatures, then by choosing Sky+ or a gym subscription instead of broadband, they're making a rational decision. Pushing universal access at great expense to the rest of us therefore doesn't make sense.

The fix for that is not to berate people for being stupid, but for the interwebs to do something absolutely compelling. I would suggest that licensed P2P music sharing, for example, may do the trick.

But why can't our political and media elites contemplate this? It's a good question.

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