Digital Carter returns, uncensored
Europe's stuck in the mud, says former Ofcom head, comms czar
Lord Stephen Carter, the founding head of Ofcom whose blockbuster report provided the basis for the Digital Economy Act, made a return to the public stage this week.
He's at Alcatel-Lucent, and without the shackles of Thick of It-style PR minders, was actually very good value. His brutal analysis of the state of British broadband was as good as any I've heard.
He was speaking at Westminster Digital Forum's Digital Future event in London. Your reporter was chairing the panel.
Although Carter said that many other countries had copied some of the regulatory decisions made by Ofcom – handling the former state telco's wires, or spectrum-trading, for example - many of the assumptions that had informed Ofcom back then “had run their course”. He criticised the new coalition for pushing back his 2012 date for universal broadband to 2015.
“The UK needs telcos more than the telcos need the UK,” he said. Investment decisions are made on a global basis now. He said that the idea of connectivity was changing, to where the value lay. We were already seeing the end of the era of 'free' and recognising that people were willing to pay for stuff – albeit not very much in some cases, and in 'fluid' ways via affinity groups or subscriptions.
So far only the people to capture value form digital stuff were device providers (he didn't mention Apple by name) and “over the top” providers (he didn't mention Google by name), and some service providers.
But he also lamented that telco's main two priorities were reducing CAPEX, then reducing OPEX second, with growing revenue a distant third.
The UK cable industry “has not changed materially since I left eight years ago”, he said. Carter was MD of NTL before becoming the first Ofcom boss. At the same time, he said, we needed smarter, more intelligent networks.
Carter's view now that he was back in industry was that the cost of red tape that came with doing business in 27 EU countries was too high. The US has already caught up in wireless, while “Europe is stuck”. His answer to the red tape was to call for a Europe-wide Ofcom. Whether this actually means less red tape or more depends on whether than the national regulators then spontaneously decide to dissolve themselves. I can't quite see that happening. Can you?
Carter declined to elaborate much on the Google Verizon deal, but agreed it looked significant. Whatever wording the US came up with, he said, operators needed to charge for different services (eg TV) in different ways. Neutrality legislation wasn't needed.
Another senior former Ofcommer, Kip Meek, the outgoing chairman of the Broadband Stakeholder Group, also said the regulator had made mistakes – including his own.
“Some of the decisions we made were too blanket in 2003 and 2004, and cost us dear. The idea that markets make better decisions than officials is hard to argue with, but there has to be neutrality between players.”
He disagreed that speed alone was a worthwhile criteria for measuring broadband success, it needed to be more nuanced. But we didn't need Aussie-style interventionism.
The former Labour administration under Rudd committed $A43bn to increasing nationwide wireline broadband speeds to 100mbps under the National Broadband Network plan. This was an “inappropriate use of national resources”, thought Meek.
I had a couple of minutes to introduce the debate, and pointed out as gently as I could that 17 million households which could have broadband didn't want it. Maybe they were being clever and not stupid, and digital evangelists had a poor record when it came to responding to this – they typically got mad. I mentioned Martha Lane Fox's advocacy of “coercion” to get people on board. That doesn't help, does it?
Most panelists agreed that “build it and they'll come” was not a sensible policy. But a lady from Ofcom's Communications Consumer Panel quango explained that more education was needed.
Anna Bradley is also non-exec chair of the Council of Licensed Conveyencers, non-exec chair of the Soil Association Certification, non-exec member of the General Optical Council and board member of Addaction, “Britain's largest drug and alcohol treatment agency”. ®