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Britain needs a real digital revolution

Allister Heath
<div>YET another wasted opportunity: that must be the verdict on the government&rsquo;s ludicrously over-hyped Digital Britain report. Neither of the two main relevant public policy issues was addressed satisfactorily: the quality of Britain&rsquo;s communication infrastructure, which is scandalously poor; and the BBC&rsquo;s destructively anachronistic dependence on the taxpayer.&nbsp;<br />&nbsp;</div>
<div>Our broadband and telecoms systems are not up to scratch and are making it much harder to operate successful businesses, especially smaller start-ups. The real problem is not so much that 11 per cent of the population lives in areas where broadband is unavailable. While that is regrettable, those of us who live in cities should not have to subsidise those who choose to base themselves in remote rural idylls (and even today, it is possible for individuals or businesses to install technology that would allow high-speed access in remote areas, albeit at a steep cost).<br />&nbsp;</div>
<div>The real problem is that the quality of the telecoms infrastructure remains poor even in London. It beggars belief that 3G mobile signals are regularly unavailable in parts of Greenwich or Richmond; it makes no sense that landline phones don&rsquo;t work properly in some offices; it is absurd that broadband download speeds are so slow within the M25, compared with what is on offer in some Asian or Scandinavian economies. That is where the real problem lies; chucking a few million pounds of taxpayers money at these and other problems will not help. Instead, market solutions must be found. One way forward may be to consider new business models whereby companies such as the BBC, which has put huge pressure on the system with its high-volume film downloads, could be asked to pay a usage fee to boost capacity. It may even be the case that many of these problems will eventually iron themselves out as the investment programmes of existing telecom firms and mobile operators pay off.<br />&nbsp;</div>
<div>What is clear is that it makes no sense, as the government is proposing, for BBC licence fee money to go towards funding universal broadband access. The licence fee is an anachronism in today&rsquo;s media age; top-slicing bits from it to spend on other things is not the answer. The proposal to make 3.5 per cent of it potentially available to other media companies that want to provide &ldquo;public sector broadcasting&rdquo; is a waste of time. The licence fee should be abolished altogether as soon as possible, and replaced by a voluntary BBC subscription which would also give access to the iPlayer service.&nbsp;<br />&nbsp;</div>
<div>Most people would probably choose to pay, even if the subscription fee were 20-30 per cent higher than the licence fee; but this reform would end at a stroke the dumping of billions of pounds worth of free content onto the airwaves and the web, crippling the likes of ITV and swamping the online efforts of newspapers and other media groups. It is also important to understand that the very concept of public service broadcasting is now obsolete. Everything can be made available online at a very small cost; this will become even more true as we move towards being able to access vast online libraries of video content. Local news in particular can and must be provided commercially, without subsidies distorting the marketplace.<br />&nbsp;</div>
<div>It is time for a real revolution. What a shame the Digital Britain report failed to live up to its radical name. <br />allister.heath@cityam.com</div>