Analysis: What Labour should do with the e-minister

Election fever is about to kick in but what will Labour's second term offer the tech industry?
Written by Jane Wakefield, Contributor

As Blair finally gets around to announcing that the general election will be held on 7 June, those in the tech industry are asking how the issues of broadband, e-government and the digital divide will be dealt with in what looks certain to be a second Labour term.

The Internet has featured highly in New Labour's strategy to build a modern society and government. It has made for good soundbites and launched a thousand targets and schemes. But core issues, such as BT's stranglehold on the phone network which in turn is key to rolling out Net services, the substance behind the targets for e-government and the current slump in the tech sector are beginning to overshadow Labour's plan for an e-society.

Just as there was little surprise in the prime minister's announcement of a general election in June, so many industry commentators will be equally unsurprised to see e-minister Patricia Hewitt move on to greater things after the election. As she takes her seat in the Cabinet, her replacement will have his or her job cut out with disputes raging over broadband, e-government and the so-called digital divide.

Hewitt is widely regarded in the industry as a hard-working minister with a good grasp of the issues and her legacy will be the work she did to help roll out cheaper narrowband services in the UK. Britain is one of the few European countries with unmetered access and our narrowband services are widely regarded as some of the cheapest in the world.

But unmetered Internet access was last year's debate and it wasn't an easy task to get where things are today. Huge demand for cheaper narrowband services meant many ISPs rolled out packages before a cost-effective product was available. As with broadband today, providers were reliant on BT and it took a lot of wrangling before Friaco was put on the table. Now offered by a variety of ISPs, it allows operators to provide a cost-effective wholesale narrowband service and means keen surfers can have unlimited Internet access for around £13 a month.

But narrowband is slow, and this year was to be the year the Internet graduated to broadband. Unbundling of the local loop promised to free operators from having to go cap in hand to BT, and Britain was promised to be the best place for broadband in the world. While the e-minister still asserts that the government is on target to become the top broadband player by 2005, there are few in the industry that would agree with her.

"Where is broadband Britain?" asks a spokesman for the UK's second largest ISP, AOL. "In phase one of narrowband access Patricia Hewitt was a tremendous ally of industry. She had a huge energy and understood the issues but we would have liked her to intervene on broadband."

AOL, along with many other ISPs and telcos, is keen to speak to Hewitt's replacement about some of the pressing broadband issues -- the fact that only four or five operators out of the original 35 are left in unbundling, that wholesale services offer no service level guarantees, that interconnect products are expensive, that a succession of surveys have put the UK at the bottom of the league table, that UK consumer prices are among the most expensive in the world.

There have been rumours that with Hewitt moved to a Cabinet post, the e-minister's job will be scrapped. Few think this should happen and most believe that the electronic issue should be important enough to warrant its own chair at the Cabinet table.

"The role should be enhanced rather than dissipated," says Energis director of regulatory affairs Carl Gibson.

Energis is still involved in unbundling but has been vocal in its complaints and due to BT foot-dragging has cut back on its investment in the process. It is also currently embroiled in a row with BT over wholesale broadband services, a discussion which has all but broken down.

While Energis is looking to telecoms regulator Oftel to sort out the problem, it hopes that the new e-minister is also fully aware of how important broadband is.

"The broadband infrastructure is the most important infrastructure after roads and it needs a government minister to take care of it," he says.

A Cabinet-based e-minister is also an idea supported by left-wing thinktank Demos. But Demos is less concerned about access and the platforms for broadband than by the issues surrounding e-government. "The first priority of the new e-minister should be shifting the emphasis of targets from times to outcomes," says Demos researcher Daniel Stedman-Jones.

In other words, forget the target to get all services online by 2005 and concentrate instead of making sure that online services are useful, relevant and likely to be used by citizens. E-government will be the crucial first step towards more joined-up government and more democracy for citizens, Demos thinks.

It will be a testimony to the need for electronic commerce and getting it right in the public sector will be a hugely important symbol to both consumers and businesses, believes Stedman-Jones. "Most other things will follow from making services good and accessible," he contends.

To this end it should be one of Labour's jobs to unite the disparate roles of the Cabinet office and the DTI (Department of Trade and Industry) under one head, preferably a Cabinet post. "A Cabinet minister would be a strong symbol and one head would send powerful signals to the public sector," says Stedman-Jones.

The third strand in the e-minister's portfolio is to avoid the opening of a digital divide in society between information-haves and have-nots. This is perhaps the hardest job for the new minister, following a savage select committee report on current strategy and revelations last week that its free PC and digital TV policy is in disarray.

While no-one is currently putting names forward for a Hewitt successor, one thing is very clear. Whoever it is will have their work cut out to make sure Labour's ambitious digital pledges are kept.

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