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Q&A: E-commerce minister on broadband rollout
Part I: Stephen Timms MP tells ZDNet UK what he thinks of government subsidies for broadband, and the idea of classifying broadband as a 'universal service'
Stephen Timms, MP for East Ham, was appointed e-commerce minister last month. In one of his first interviews since starting his new job, the man at the heart of government policy on issues such as broadband, 3G, digital television and Wi-Fi explained what he hopes to achieve at the Department of Trade and Industry.
Q: Perhaps you could start by outlining what you hope to do in your new job -- is this a job that you have wanted for quite a while?
A: It's certainly a job that I've always thought I would love to have, yes. I think we are at a point where a lot is happening. Broadband, for example, is starting to really get interesting now that we're seeing 20,000 new connections a week. I actually think there are good reasons for optimism about broadband. Then we've got third-generation mobile, where we're expecting services to go live towards the end of this year. With Digital TV, we have had a setback with ITV Digital (which collapsed in May), but within the last week we have discovered there are six parties interested in acquiring the digital terrestrial TV licences. So, in all three areas I think there is good ground for optimism, and I think we're really well placed to make a success in all three of those. My job is to live up to the targets that we have set, such as making the UK the best place for e-commerce by the end of 2002, and my sense is that we're actually well placed to achieve those targets. Broadband is certainly something that our readers are interested in. Although they're pleased about price cuts, many readers are concerned about rollout, and the fact that only two-thirds of the UK are covered by BT's ADSL network. Do you think the lack of rural broadband is a problem, and what do you think the government should do about it?
I think there are a number of things we can do. There are some interesting examples where public-private partnerships are addressing this issue, such as in Cornwall where EU money is subsidising BT's ADSL rollout, and also in Wales. There may be scope for more of that partnership approach elsewhere, with or without EU money. Another really important lever that we can use is the aggregation of public sector demand. If we can identify the public sector customers for broadband and bring them together then there is the possibility, I think, of making it viable for service providers to roll broadband out to them, and then everyone else in surrounding areas can benefit. We're going to be saying more about how we think that will work soon. And I guess the other angle is other technologies, such as satellite. So, there are some challenges here without doubt. At the same time, we are seeing the take-up of broadband really growing, and there is a sense that the proportion of the country that we thought was going to be offered broadband on commercial grounds is growing quickly. I think that as the commercial case grows we are going to see a higher level of access to broadband. Some parts of Britain are so sparsely populated that they have no chance of being offered broadband in the foreseeable future. Is there a case for using UK government money to help these areas?
Well, there are things we have done, such as the £30m government fund that is paying for initiatives in some areas. There may well be scope for more initiative of that kind. It is never going to be the government that pays for "broadbanding" large parts of the country, but we can pay for pilot schemes that develop new approaches to the problem. However, I suspect that being a customer of broadband will be the biggest contribution we make to the rollout of high-speed networks in more rural areas. Many other countries are spending large sums of money on rolling out broadband to rural areas. Do you think that if we aren't doing the same, and we don't achieve broadband rollout as quickly, there will be long-term damage?
If you look back to the development of ISDN, similar arguments were being made. Government money wasn't used then, and if you look at the situation today I think it's hard to argue that the country suffered because of that. In a recent press release, you said that broadband could help to deliver "higher wealth creation and living standards". Do you see broadband as a way of improving society?
I do see it as an enabler for the development of the economy, yes. With the issue of broadband in rural areas we certainly need to ensure that opportunities are widely available, because there are areas that are losing out. Do think there will be a point in the future when broadband becomes defined as a universal service -- in the same way that everyone is entitled to basic telephony services today?
Well, again, people used to ask that about ISDN. I think the definition of a universal service is something that needs to be kept under review, but I don't think there is a case at the moment for adding broadband to the list. And again, I remember what happened with mobile phones. At one stage there was a worry that the extension of mobile was going to create difficulties. Instead, I see that even the asylum seekers who come to my constituency surgeries have them -- so it hasn't proved to be a problem. I think we can actually look to the ordinary commercial process to deliver most of the country with broadband. I certainly don't see a case for a change at the moment. The danger with going down that road is that you create a kind of dead end that would actually hold up progress rather than enhancing it. The Broadband Stakeholders Group made 14 recommendations late last year, and the government accepted 13 of them but wasn't prepared to offer tax breaks for infrastructure rollout. Was that the right decision?
Yes, I think it was. We can see that we're starting to make very good progress (with broadband rollout), and part of the reason for that is the very commercial approach that has been taken to broadband. Since that report was published, as you know, we've seen some big changes. I met the chairman and chief executive of BT last week, and they both emphasised that broadband is at the heart of BT's commercial strategy. So, yes, I think it's important that people don't look to government money as the way forward. We can look to the normal commercial process to deliver broadband to people. It is government's responsibility to help the market, and to keep an eye on what's going on, but it's not going to be government money that pays for the infrastructure. Last year, Douglas Alexander made a speech in which he asked BT to cuts its prices. Some months later BT's wholesale prices came down -- since when plenty of DTI press releases have talked about BT "responding to the challenge" set by Alexander. You said that you met with Ben Verwaayen and Sir Christopher Bland last week -- is there anything that you're now pushing them, or another company, to do in the same way that Douglas Alexander pushed BT on prices?
The discussion I had with BT were very much of a "getting to know you" type nature. It certainly true, though, that there has been a very big change with BT's broadband strategy, following on from what Douglas said. It's a welcome change. I expect that the comments made by Douglas were an element in changing the thinking at BT, and I'm also sure there were other elements that came into the thinking. And of course it's clear from BT's share price that the market has taken a very positive view of the change of heart on the part of BT as well. I'll be keeping a close on eye on what all the players are doing -- BT, the cable companies, the retailers, the ISPs, the mobile companies -- especially with 3G coming soon. And I will want to keep closely in touch with the whole industry, because it does seem characteristic of this industry that people are very ready to volunteer ideas and comments and suggestions and I really want to be taking advantage of that. Since getting the job people have been emailing me with their congratulations but also offering their suggestions, and that's very encouraging. Next Page: Why the collapse of ITV Digital doesn't mean the government will miss its analogue switch-off target
A: It's certainly a job that I've always thought I would love to have, yes. I think we are at a point where a lot is happening. Broadband, for example, is starting to really get interesting now that we're seeing 20,000 new connections a week. I actually think there are good reasons for optimism about broadband. Then we've got third-generation mobile, where we're expecting services to go live towards the end of this year. With Digital TV, we have had a setback with ITV Digital (which collapsed in May), but within the last week we have discovered there are six parties interested in acquiring the digital terrestrial TV licences. So, in all three areas I think there is good ground for optimism, and I think we're really well placed to make a success in all three of those. My job is to live up to the targets that we have set, such as making the UK the best place for e-commerce by the end of 2002, and my sense is that we're actually well placed to achieve those targets. Broadband is certainly something that our readers are interested in. Although they're pleased about price cuts, many readers are concerned about rollout, and the fact that only two-thirds of the UK are covered by BT's ADSL network. Do you think the lack of rural broadband is a problem, and what do you think the government should do about it?
I think there are a number of things we can do. There are some interesting examples where public-private partnerships are addressing this issue, such as in Cornwall where EU money is subsidising BT's ADSL rollout, and also in Wales. There may be scope for more of that partnership approach elsewhere, with or without EU money. Another really important lever that we can use is the aggregation of public sector demand. If we can identify the public sector customers for broadband and bring them together then there is the possibility, I think, of making it viable for service providers to roll broadband out to them, and then everyone else in surrounding areas can benefit. We're going to be saying more about how we think that will work soon. And I guess the other angle is other technologies, such as satellite. So, there are some challenges here without doubt. At the same time, we are seeing the take-up of broadband really growing, and there is a sense that the proportion of the country that we thought was going to be offered broadband on commercial grounds is growing quickly. I think that as the commercial case grows we are going to see a higher level of access to broadband. Some parts of Britain are so sparsely populated that they have no chance of being offered broadband in the foreseeable future. Is there a case for using UK government money to help these areas?
Well, there are things we have done, such as the £30m government fund that is paying for initiatives in some areas. There may well be scope for more initiative of that kind. It is never going to be the government that pays for "broadbanding" large parts of the country, but we can pay for pilot schemes that develop new approaches to the problem. However, I suspect that being a customer of broadband will be the biggest contribution we make to the rollout of high-speed networks in more rural areas. Many other countries are spending large sums of money on rolling out broadband to rural areas. Do you think that if we aren't doing the same, and we don't achieve broadband rollout as quickly, there will be long-term damage?
If you look back to the development of ISDN, similar arguments were being made. Government money wasn't used then, and if you look at the situation today I think it's hard to argue that the country suffered because of that. In a recent press release, you said that broadband could help to deliver "higher wealth creation and living standards". Do you see broadband as a way of improving society?
I do see it as an enabler for the development of the economy, yes. With the issue of broadband in rural areas we certainly need to ensure that opportunities are widely available, because there are areas that are losing out. Do think there will be a point in the future when broadband becomes defined as a universal service -- in the same way that everyone is entitled to basic telephony services today?
Well, again, people used to ask that about ISDN. I think the definition of a universal service is something that needs to be kept under review, but I don't think there is a case at the moment for adding broadband to the list. And again, I remember what happened with mobile phones. At one stage there was a worry that the extension of mobile was going to create difficulties. Instead, I see that even the asylum seekers who come to my constituency surgeries have them -- so it hasn't proved to be a problem. I think we can actually look to the ordinary commercial process to deliver most of the country with broadband. I certainly don't see a case for a change at the moment. The danger with going down that road is that you create a kind of dead end that would actually hold up progress rather than enhancing it. The Broadband Stakeholders Group made 14 recommendations late last year, and the government accepted 13 of them but wasn't prepared to offer tax breaks for infrastructure rollout. Was that the right decision?
Yes, I think it was. We can see that we're starting to make very good progress (with broadband rollout), and part of the reason for that is the very commercial approach that has been taken to broadband. Since that report was published, as you know, we've seen some big changes. I met the chairman and chief executive of BT last week, and they both emphasised that broadband is at the heart of BT's commercial strategy. So, yes, I think it's important that people don't look to government money as the way forward. We can look to the normal commercial process to deliver broadband to people. It is government's responsibility to help the market, and to keep an eye on what's going on, but it's not going to be government money that pays for the infrastructure. Last year, Douglas Alexander made a speech in which he asked BT to cuts its prices. Some months later BT's wholesale prices came down -- since when plenty of DTI press releases have talked about BT "responding to the challenge" set by Alexander. You said that you met with Ben Verwaayen and Sir Christopher Bland last week -- is there anything that you're now pushing them, or another company, to do in the same way that Douglas Alexander pushed BT on prices?
The discussion I had with BT were very much of a "getting to know you" type nature. It certainly true, though, that there has been a very big change with BT's broadband strategy, following on from what Douglas said. It's a welcome change. I expect that the comments made by Douglas were an element in changing the thinking at BT, and I'm also sure there were other elements that came into the thinking. And of course it's clear from BT's share price that the market has taken a very positive view of the change of heart on the part of BT as well. I'll be keeping a close on eye on what all the players are doing -- BT, the cable companies, the retailers, the ISPs, the mobile companies -- especially with 3G coming soon. And I will want to keep closely in touch with the whole industry, because it does seem characteristic of this industry that people are very ready to volunteer ideas and comments and suggestions and I really want to be taking advantage of that. Since getting the job people have been emailing me with their congratulations but also offering their suggestions, and that's very encouraging. Next Page: Why the collapse of ITV Digital doesn't mean the government will miss its analogue switch-off target
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