The government's e-envoy, Andrew Pinder, called for changes to the pricing of broadband on Tuesday, saying that the spread of high-speed Internet access to the general population is "absolutely fundamental to the continued prosperity of this country".
Pinder, who coordinates the e-business efforts of government ministers and the civil service, said that the rollout of broadband represents a chicken-and-egg situation in which users are reluctant to sign up because of high fees, while providers are unwilling to invest in cutting prices and promoting broadband because of the apparent lack of demand. Offering a cut-rate entry-level broadband service could break the deadlock, he said.
Broadband technologies such as Internet-via-cable and ADSL, which uses telephone lines, create an always-on Net connection that is many times faster than a standard modem connection. Services are now available in the UK, but British Telecommunications now says demand for ADSL has slowed.
"We have a competitive narrowband market... but broadband is still quite expensive," Pinder said, speaking at the Networks Telecom trade show in Birmingham. "It's a big step up to go from narrowband to broadband." He suggested the step be made "more graduated" with a low-cost service that would offer slower access speeds.
InterForum, a government lobbying body that represents businesses such as IBM, Demon, Barclays and Sainsbury's, agrees that pricing is a key issue in the broadband debate. The group's chief executive, Philip Flaxton, said pricing is practically "the single biggest inhibitor" to moving forward with high-speed services.
Pricing is also key to the government's goal of making the UK the best place in the world to do e-business, through legislation, education and infrastructure buildout. But while Britain now has genuine unmetered narrowband access, it trails far behind Germany, the US and Asian regions such as South Korea in terms of the accessibility of high-speed services.
What's more, many IT leaders believe it is not possible to make things go any faster in a world where it is necessary to dig up pavement to upgrade infrastructure. Bill Gates of Microsoft and Craig Barrett, chief executive of Intel, have both recently said that the Internet will remain a narrowband world for the foreseeable future.
Pinder is optimistic, however. He expects that within five years most Internet users will be broadband-enabled, and that penetration will be driven by high-speed content like video-on-demand. "The UK will have the most competitie broadband pricing and the best broadband coverage in the OECD," he said. "We are determined to make sure this happens."
In September, a broadband stakeholder group including industry representatives will report to Pinder, and two groups of consultants will present their recommendations. After that, the government plans to roll out a series of initiatives on how to move the broadband industry.
The government does not plan to sit on the sidelines of the process, but will look to take a "leadership role", Pinder told ZDNet UK. He hopes to get a debate going with the recommendations this autumn, and believes the government can stimulate broadband demand by buying into the technology itself, through public-sector spending.
He hit out at critics who have charged that the government is partly to blame for the current slowdown in the telecoms sector, after it accepted billions of pounds from companies like BT and Vodafone last year in exchange for 3G licences. Instead of picking fights with the government, the telecoms industry should get on with things, he said.
"We need to do something collectively... [the government] plans to combine with the industry to market broadband more effectively."
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