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Eye2Eye: ZDNet interviews the e-Minister, Part 1

Patricia Hewitt grilled on Internet access prices, whether Oftel is doing its job, surveillance and more...

When e-Minister Patricia Hewitt was appointed last July, Labour's Internet policy was a mess. While Hewitt has won over many industry watchers, there are still plenty of questions that need answering.

ZDNet News grilled Hewitt about why Internet access prices are so high, whether BT and Oftel are really pulling their weight in the Internet revolution, why the government is obsessed with online surveillance and what 'e-government' will really mean.

While it is obvious the e-Minister understands the issues and is a clear techno-enthusiast, the politician's mask, I found, is as hard to remove as BT's monopoly.

You are generally regarded in the industry as a minister who understands the problems of the Internet. What achievement has made you proudest since you came to office?

We have simplified government policy so the strategy is about getting the market framework right. The e-communications bill is now on track. It is about getting regulation right, getting Internet access costs down. It is also about getting European laws in place. Getting the people right is about closing the digital divide, making sure everyone has access to new technology. It is also about closing the skills gap, which is a real problem for the ICT industry.

Getting government right is about exploiting ICT to deliver government services online to citizens and form relationships between government and citizens so things are much easier and more convenient. It is also about using ICT to manage government internally so we can get decisions made faster.

Would you agree that access price is the most important factor for getting the average consumer online?

Total access price is the single most important issue. That includes the price of the kit as well as the telephone connection. As far as phone connection is concerned, off peak access prices are some of the cheapest costs in the world but peak time access is still too high.

Costs are falling. BT has announced its new Surftime product -- which BT, Oftel and the industry are working on because they need to agree the wholesale price so we get a range of flat rate tariffs. That will make a very big difference.

Telewest has announced its offer of £10 a month always on flat rate connection and I think we will see a lot of other developments like that over the next couple of months.

Costs are coming down and we are getting the flat rate subscription packages that we need. But what will really make the difference I think is when we move from computers as the main means of Internet access to WAP phones, third generation phones and digital television. We are ahead of the USA in mobile telephony and digital television. The next big leap forward for the Internet gives the UK a chance to be in the lead. We are determined to exploit the chance.

Whilst we're waiting for that, BT still controls 85 percent of the domestic market. Would you agree that BT's actions are crucial to getting people online?

And they [BT] are doing that. They are rolling out ADSL and the first 400 exchanges will be converted in March. Then there is an aggressive rollout programme which will open up broadband to people within their own homes. Behind that there is local loop unbundling which is crucial to driving down costs and bringing competition into the local loop. Oftel and BT have agreed a July 2001 deadline but they hope they can bring it forward by at least a couple of months.

Surftime is coming out and BT is talking about cutting costs before it is even launched. The message I get is that ISPs are unhappy with the cost. Is that the message you get?

There are criticisms and I would love to see local loop unbundling happening faster, but the practical reality is that in order to unbundle the local loop, BT and other telcos have to find practical ways of co-locating, in many cases quite small telephone exchanges. That issue of co-location is not a trivial problem. Nobody wants to see local loop unbundling go wrong because practical issues haven't been sorted out. What BT and the rest of the industry are doing is a series of pilots to make sure there are robust solutions in place. BT and Oftel have made it clear that if it can be done faster than July 2001 they would like it to be brought forward.

Would you agree that BT is dragging its heels and doing the bare minimum?

No. BT has got a very aggressive rollout of ADSL. If that goes to plan and it is hard to get up-to-date DSL comparisons -- by the end of the year we should be significantly ahead of most European competitors because earlier DSL rollouts haven't converted all exchanges and haven't got high take-up.

Part II

Part III