Minister for Digital Britain on the 50p tax and what happens after 2017...
Has the UK been too slow moving towards next-gen broadband? Why did the government opt to tax telephone lines to help fund fibre rollouts? And what are the chances of the Next Generation Levy making it onto the statute books before the General Election? silicon.com's Natasha Lomas sat down with the minister for Digital Britain, Stephen Timms, to pick his brains on the UK's high tech future.
In its Digital Britain whitepaper the government identifies a clear link between the nation's economic prospects and take-up and adoption of IT - also noting that, internationally, the UK is falling behind in this high tech race.
"The digital economy underpins our whole economy and builds our national competitiveness," the interim Digital Britain report states. "Our readiness to adopt digital technology has driven productivity gains throughout our wider economy. Over the last 10 years the UK has been consistently closing its historic productivity gap with the other leading European economies, based largely on our take-up and adoption of digital technology.
"But our productivity still lags well behind the US and we face new challenges from the innovative companies of the successful Asian economies."
The onward march of fibre broadband in Asia, where governments in countries such as Japan and South Korea have been enthusiasts for fibre, is well documented. Even as far back as 2005 Japan was adding millions of fibre to the home (FTTH) subscribers every year. Research published last autumn by analyst house Ovum notes that Asia Pacific leads the world in both FTTH and fibre to the cabinet (FTTC) subscribers, with the region accounting for a massive 77 per cent of worldwide subscribers. North America is next with just 16 per cent, while EMEA has a paltry seven per cent.
At the back end of last year the Hong Kong Broadband Network operator began offering a symmetric 100Mbps broadband service to around two-thirds of the Hong Kong territory for just 99 HK dollars per month - less than £8. Contrast that with BT's recently launched consumer fibre broadband service - which is only available to a minority of the population in places where exchanges have been fibre-enabled - and the UK's fibre offerings look more than a little shabby.
BT's fibre service is both more expensive (more than double the price) than the Hong Kong 100Mbps service and significantly slower in upload and download speeds - with just 'up to 10Mbps' and 'up to 40Mbps' respectively.
But what does the minister for Digital Britain, Stephen Timms, have to say about progress on next generation access in the UK? Has the UK been too slow moving towards next-generation broadband?
"I don't think we've missed [the boat] yet - I think as long as we're able to move quickly now then we'll be fine but we do have to move quickly and it does have to be public support for rolling out next-generation broadband," Timms told silicon.com.
"It's not going to happen on its own. That's the reason for the 50p phone levy... So I'd say no reasons for panic yet but we've got to get a move on."
The 50p per month Next Generation Levy on copper telephone lines proposed in the final Digital Britain report is the government's answer to ensuring next-gen broadband reaches...
...'the last third' of the nation. BT is in the midst of a programme of enabling its exchanges for fibre broadband but its commercial ambitions stretch to covering less than half (40 per cent) of the UK's population by 2012.
The government claims the levy will raise £1bn to push the rollout of technologies such as fibre broadband to at least 90 per cent of the nation by 2017. The levy undoubtedly has a laudable aim but is not without its critics - the Conservative Party has hit out at the choice of a telephone-line tax to fund next-gen broadband, for instance.
So why did the government settle on phone lines as the vehicle for the next-gen fund - rather than arguably more relevant technologies such as fixed-line (and mobile) broadband connections?
Timms said the government was seeking "a simple and modest charge which is easy to collect and easy to define".
"If you look at what's happened to phone bills over the last three years they've fallen on average by more than a pound a month in each of the last three years so against that background 50p across every phone line that's a very modest charge," he told silicon.com. "We're going to be exempting people who're on the social tariffs anyway and I would favour a broad base for this rather than a narrower base."
The minister added that the government was reluctant to tax mobile users as the industry has already contributed billions to the Treasury when it paid for 3G spectrum licences.
Timms reiterated his determination to get the Next Generation Levy - which will be included in the Finance Bill - before Parliament "this side of the election". However he added: "What I can't say to you is absolutely for sure what will happen to that bill, what Parliament will do to it. And particularly in the run up to an election the opposition is in a rather stronger position than it otherwise is - but as the minister responsible it's my firm intention to legislate for the 50p levy this side of the election."
"My hope would be that the Conservatives would see the sense of having a guaranteed funding stream that can support the rollout of Digital Britain. I think it's the right policy and I hope that in due course that'll be their view as well," he added.
But what is 'next-generation broadband' when it's at home? The Digital Britain report is shy on defining exactly what is meant by this phrase - it does not set out a specific speed requirement, for instance, or champion a particular technology such as fibre broadband - envisaging instead a patchwork of wired and wireless technologies delivering the UK's future broadband needs.
The government is currently consulting on Digital Britain's next-generation broadband proposals - and its consultation document notes: "Next Generation, or super-fast broadband, is difficult to define, but is generally accepted as offering connectivity at a considerably higher speed than available currently. This connectivity is currently delivered through a variety of fibre optic technologies but in the future will also be delivered through wireless means, such as satellite, mobile and other technologies such as WiMax."
Asked whether Digital Britain should have championed fibre broadband technology specifically, Timms shook his head. "I don't think we should say that everybody has to have a particular technology one day. We should be saying that everybody has access to the kind of services that fibre gives you access to," he said.
Services the government hopes will be supported by Digital Britain's emphasis on current and next-gen broadband infrastructure include telemedicine and teleworking, according to Timms. But public service access and delivery is also a big focus.
"Increasingly we need to be offering public services online," said Timms. "Things like benefit applications, job seeking you can already do online and actually that's a very good example of a public service having been transformed by the technology - one of the reasons that unemployment has been kept at a much lower level over the last year than people thought because we've got a really good job centre service with good technology supporting it so we want to use the technology for public services."
Beyond 2017, Timms speculated the 50p levy may be kept in place to plug any next-generation access 'notspots'.
"The rollout will have to carry on beyond 2017," he said. "It may well be that we will keep the Levy in place after 2017, it'll continue to generate revenue and then we can use it to extend the rollout further.
"In due course we'll want everybody to have next generation access but I think 90 per cent by 2017 is a good target to be aiming for."