We either need to break up broadband monopolies or nationalise connectivity
The internet and broadband connection has become a fourth utility and a market we need to take just as seriously to protect consumers from rising prices, writes Jon Seal.
Think about it, if the water stops how long will it take you to notice? Turn off the internet, and with the majority of us glued to the phone or computer, you’d notice within seconds – very quickly the internet has become the fourth utility on par with gas, water and electricity. Similarly, they all share one thing, despite there being many recognisable brands who are able to bill you, there is a central nervous system owned and managed by one operator – they are de facto a monopoly business with only the government holding them to account in their cycled price plans.
Consequently, providers and consumers are at the behest of any upstream price changes. Which providing wording is correct, they can enforce both within a contract despite the contract terms, as well as putting up prices for new customers.
Unlike our European counterparts, the connectivity infrastructure is monopolised which is why only 8 per cent of homes in the UK have full-fibre broadband compared to 71 per cent in Spain. Connectivity isn’t just for social media, it is the backbone of business globally.
The lack of competition in the market is to the detriment of connectivity and innovation, which in turn impacts business and opportunity. Infrastructure is not being upgraded and improved, like electricity, water and gas distributors which are also monopolies, the set-up is behind the curve and there is lack of regeneration to improve the network.
In the middle of no-man’s land, these monopoly markets are pulled between the stakeholders of the businesses that service them and the government that attempts to regulate them. It is a chicken and egg situation, with no one wanting to ask the other for more.
Therefore, we should either open it out fully to the market so businesses can compete for customers, or nationalise it so that the responsibility solely lies with Government. There are pros and cons to both approaches – either way, we need to get out of the present limbo.
If we open up the market, it should naturally drive competition with businesses investing in research and innovation to ramp up connectivity, at the same time making it financially more competitive.
The other route will see the government having to make decisions on upgrading the network; which is also no bad thing. Where it is a new utility and fundamental to economic output and modern life there will be a vested interest in keeping it fit for purpose.
There is no overnight solution, but with a general election penciled in for next year the political parties need to address the lack of infrastructure in the room. Last month, saw the creation of the Department for Science, Innovation and Technology – an outward acknowledgement that the future of the country – be it in education, healthcare or business – revolves around new technologies aided by communication and connectivity. Decisions need to be made one way or another to keep businesses online.