It is difficult to overestimate the importance of the decisions to be taken as a result of Lord Carter’s report on Digital Britain, an interim version of which was published yesterday. Britain is in an unprecedented recession and there is an urgent need to generate new jobs to fill the gap caused by the collapse of financial services. Our best chance is to exploit the digital revolution, not only because it is a vital ingredient of economic growth but because Britain has a competitive advantage – generating content for it.
Lord Carter’s report covers many activities, from illegal web downloads to providing a rival for the BBC – rightly seen as a cornerstone of Britain’s digital strength – in the provision of public service broadcasting. But his most important proposal is for broadband to be available for every home by 2012. This would happen at speeds of ‘up to’ two million bits of information per second (2 Mbps). That is roughly what is needed to do video conferencing or use the BBC’s iPlayer. Further into the future, the report urges the government to consider whether public incentives are needed to finance ‘next-generation broadband’ with speeds up to 10 or even 50 times faster – 100 Mbps – for more sophisticated uses.
The big question is whether the 2012 target of ‘up to’ 2 Mbps, which many users would regard as too modest for their current needs, is enough when parts of the world already have 100 Mbps and when the demand for services is exploding. The argument about bringing the huge capacity of fibre optics to the home, and who should finance it, has been going on for well over 20 years and it still has not happened, though it is now planned for new homes. The usual argument against fast broadband – that there would be no demand – has been blown apart by the video revolution. Bandwidth demands from the iPlayer alone have proved too much for the system at times. We know from innovations in the pipeline – including high-definition TV, remote medicine, remote education, life-sized video conferencing and the rapid growth of ever more sophisticated virtual worlds and multiplayer gaming – that the demand for bandwidth will be huge. If Britain is to succeed in encouraging industry to supply equipment and content then we cannot err on the side of caution.
The Broadband Stakeholders’ Association says the cost of upgrading to 20Mbps by running fibre to a box near the home would be £5bn, only a fifth of the £25bn cost of fibre right into the home. That will not deliver the national need for a very high speeds that other countries will be enjoying. The government is currently shelling out tens of billions of pounds to bail out the banks. In such circumstances it seems almost modest to invest £25bn to ensure that Britain has a digital infrastructure to give us an advantage in exploiting all the new services that will spring up during the rest of the century.
Building a network does not guarantee that it will be used. The government’s 2Mbps commitment to universal broadband by 2012 is not like BT’s obligation to deliver phone lines to every home. It is more like a statement of intent. At present some 60% of households in the UK have broadband. This is not bad by international standards, but it means that 40% do not have it, either because they cannot afford it or they do not want it. Lord Carter is suggesting steps to combat this, but it is not going to be solved by market forces alone. If it is not solved, an even bigger digital divide will open up between the broadband elite and the rest. The elite will have access not just to the instant knowledge and the best seats at major sporting and cultural events, but to the unfolding opportunities in education, health and the job market. This is unacceptable. Like water and electricity, broadband is fast becoming something that everyone is entitled to have