Stewart’s £150m reward for rural correctness

Being a pain in the arse works sometimes.

So, hats’ off to Penrith and The Border MP Rory Stewart, who got  George Osborne to set aside an extra £150m so that up to six million people living in mobile not-spots might actually get a signal.

Stewart organised a Commons debate, possibly still the best-supported debate ever, to get Ofcom to increase its mobile coverage target, and with it, high speed 4G coverage, from 95% to 99%. The motion passed unanimously.

But it came at a cost. Shortly after the debate Stewart went public with tales of being told in dark corridors that uppity first-time MPs needed to shut up and watch the big boys at work.

Obviously, it took more than “a few words to the wise” to intimidate a man who first walked 6,000 miles in two years through Pakistan, Iran, Afghanistan, India and Nepal, and later ran an Iraqi province during the height of the military adventure there.

As I recall, Stewart worked out that it would cost an extra £210m to build the masts to provide 99% coverage, so Osborne has not been over-generous to Stewart. But it is proof of Stewart’s resilience and his ability to work behind the scenes as well as in front.

While this is a coup for Stewart, it’s too soon to call it victory in the battle to get the UK a globally competitive broadband infrastructure, if today’s BT broadband outage, which affected large parts of the UK for hours, is any sign.

 

 

How to drive economic growth in the UK

Economic growth, or rather the search for it, is the big buzzword these days.

It’s always good to look at the numbers, because as Robert Townsend, author of Up the Organisation, the best business book I ever read, said, if you aren’t in it for fun or profit, what are you doing here?

The Office of National Statistics has published some business demographics data. It found that at the start of 2010, the 4.5 million UK private sector enterprises employed some 22.5 million people, and had an estimated combined annual turnover of £3,200bn.

Small and medium enterprises accounted for 59% of the jobs and 49% of the turnover, but they represent more than 99% of enterprises.

Number of enterprises in the private sector, UK, start of 2010.

	Enterprises	Employment	Turnover	Average turnover per employee
		thousands	£millions
All enterprises	4,484,535	22,514	3,212,315
SMEs (0-249 employees)	4,478,595	13,316	1,561,793
All employers	1,193,965	18,982	3,000,522
With no employees	3,290,570	3,532	211,793	59,964
1-9	989,845	3,717	431,378	116,055
10-49	170,410	3,363	482,225	143,391
50-249	27,770	2,703	436,397	161,449
250 or more	5,940	9,198	1,650,522	179,444
Source: ONS

ONS found that of the 280,000 business that started up in 2004, only two-thirds survived to three years, and less than half (46.8%) were left after five years. The figures since the banking collapse may prove much worse.

One can argue whether the start-up rate of 6.2% (start-ups vs existing businesses) is good enough. Probably it is not. But it may be more important to support existing SMEs for the following reasons.

Almost all are one-man bands, sole proprietors and self-employed. They will turn over, on average, just under £60,000.

Companies with up to nine employees do much better, earning on average just over £116,000 per employee. Firms with more than 250 staff enjoy turnovers of almost £180,000 per employee. Which provides evidence for Adam Smith’s argument that the division of labour and task specialisation leads to economic wealth.

So if the government wanted to encourage economic growth, it would encourage existing SMEs to hire more people.

Telcos wrong to charge for delivery

It would be wrong to let internet service providers charge content providers like Google, Netflix and iTunes for delivering content to customers, says Communications Chamber partner Rob Kenny. (This item is cross-posted from Br0kenTeleph0n3)

In a point by point critique of a telco-commissioned AT Kearney paper, Kenny demolishes arguments telcos are using to persuade regulators and politicians to let them to charge content providers for delivery.

Source: R. Kenny – 10% of users cause 55% of net traffic.

In doing so, he strengthens the argument for other countries to follow the Dutch and pass laws that guarantee net neutrality, in other words, that telcos should not discriminate between different types of traffic, and continue to use their “best efforts” to get the bits to their destination as fast as possible.

Kenny’s most telling line is a quotation from Gary Bachula of Internet2, a US non-profit consortium of government and academic network researchers intent on building the next generation internet.

Bachula told the US Senate in 2006, that, based on seven years’ experience of running advanced broadband networks for five million users, “… we seriously explored various ‘quality of service’ schemes, including having our engineers convene a quality of service working group. As it developed, though, all of our research and practical experience supported the conclusion that it was far more cost-effective to simply provide more bandwidth.”

In addition, Kenny points out that the top 10% of internet users are responsible for 55% of the traffic. Why charge content providers when users generate the traffic, he says.

Kenny also shows that peer to peer traffic represents more than 30% of internet traffic. Charging content providers without addressing file-sharing between users would be “incomplete”, he says.

Besides, large content providers use massive server farms close to users to improve customer experience. This lowers the impact on the telcos’ core network, reducing their claim that content providers are free-riding and should therefore be liable for charges.

Kenny’s critique supports evidence gathered by German consulting firm WiK Consult that showed the incumbent telcos will only invest in new infrastructure (eg fibre networks) where threatened with competition, mostly from cable TV operators.

Kenny shows that the support the AT Kerney report offers telcos is deeply flawed, and thinly disguises their determination to stave off competition, keep their monopoly over access to end users, keep prices high and the market inefficient.

Unless governments and regulators ignore these special pleadings, incumbent telcos are unlikely to play a meaningful role in achieving the ambitions set out in Europe’s Digital Agenda and, closer to home, Digital Britain (revised).

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UK cities to meet on EU digital single market

How to remove barriers and create a true pan-European digital single market will the subject of a series of meetings between EU officials and local representatives in October and November in the UK and Europe.

There will be two London meetings on 24 and 25 October. The first will discuss Londoners’ response to the Digital Agenda.

Rural broadband will be high on the agenda at the Cardiff and Edinburgh meetings, with Cardiff also discussing eHealth, eGovernment and other uses and applications, the participation of Ofcom Wales, ICT research and innovation prospects.

City councillors from Birmingham, Manchester, and Bristol will meet local stakeholders and provide feedback to the EC director-general Robert Madelin at a London meeting.

Times and venues are still vague, as are whose opinions are deemed worthy of attention.

The meetings, intended to chart local courses of action, are a follow-up to a similar series a year ago just after the European Commission published its Digital Agenda.

A report on those meetings just published found that 1900 civil servants, regulators, industry representatives, members of parliaments, universities, NGOs and consumer associations attended, averaging 75 per country.

The report said press coverage was not an objective of the exercise as such, adding “some (countries) actively decided not to seek media attention”.

To get on the delegate list contact John Doyle at EC INFSO, Belgium, and Jon Zeff in the media directorate at the department for media, culture and sport, or the office.

Newzbin block will not stop online piracy

The UK high court’s decision to instruct BT to block access to Newzbin, a website that links to allegedly illegal copyright material, will do little to dampen either online piracy or emotional debate about it.

BT said in a statement, “This is a helpful judgement, which provides clarity on this complex issue. It clearly shows that rights holders need to prove their claims and convince a judge to make a court order. BT has consistently said that rights holders need to take this route (through the courts). We will return to court after the summer to explain what kind of order we believe is appropriate.”

BT and TalkTalk are appealing an earlier decision to reject their appeal against their loss of a judicial review to set aside parts of the UK’s controverisal Digital Economy Act that deal with online piracy.

Reacting to the Newzbin decision Peter Bradwell, copyright campaigner at the Open Rights Group said, “Website blocking is pointless and dangerous. These judgements won’t work to stop infringement or boost creative industries. And there are serious risks of legitimate content being blocked and service slowdown.

“If the goal is boosting creators’ ability to make money from their work then we need to abandon these technologically naive measures, focus on genuine market reforms, and satisfy unmet consumer demand.”

ISPA secretary general Nicholas Lansman said, “ISPA has long maintained that this is an issue that rights holders should seek to address in court, rather than through voluntary means, and today’s ruling should go some way to offering clarity on what is a complex area.”

Landsman said he was concerned about over-blocking, the ease of circumvention and increased use of encryption. These were ” widely-recognised”, which meany blocking would not stop online copyright infringement.

“Rather, as the government-commissioned Hargreaves Review recently found, there should be more focus on offering innovative, fully-licensed content services to give consumers what they are clearly demanding,” he said.

Pirate Party UK, which campaigns for an “open internet”, said on Twitter, “Hollywood’s win in the Newzbin case is a disaster for ordinary UK internet users. This could open the internet censorship floodgates.”

The decision comes less than a week after EMI’s former COO of new music and president of digital business, Douglas Merrill, reportedly claimed that EMI’s own research showed the peer to peer downloaders were in fact the music company’s best clients.

According to reports by ComputerWorld Australia, the TorrentFreak blog and Cory Doctorow on the Boing Boing blog, Merrill, a former Google CIO, said they used illegal download sites to sample music before buying the CDs of those they liked best.

The Newzbin case relates to videos and films, rather than to music, but the trade bodies that represent both industries have worked together in the past, notably on the Anti-counterfeiting Trade Agreement (Acta).

According to a new assessment of the legality of Acta under European law, “Acta was controversial both in terms of the process and the substance of the neotations. The decision to maintain secrecy (from October 2007) until the release of draft text in mid-2010 was to prove a significant handicap to public understanding and support of the treaty.”

The study, by the policy department of the European Commission’s external policies department,  found that the provisions against online piracy had been very watered down from the original proposals.

However, it found that ACTA extended criminal measures of indirect commercial benefit. This may contradict the European parliament’s position that acts “carried out by private users for personal and not-for-profit purposes” were to be excluded, it said.

The assessment also said there is no “three-strikes” provision that calls for internet service providers to cut off internet access to infringers, but ISPs are required to provide information about subscribers to rightsholders on request.

“However, this provision is not mandatory. There is no requirement for takedown notices. However, the normal producdures for injunctions and provisional measures will be applied in the digital environment,” it said.

Digital underclass mocks faster broadband

What responsibility and accountability is the UK government willing to take on in the areas of digital access, skills and engagement?

This is the question that must be answered before any other, says the London School of Economics media policy project.

In a dossier published today, the project makes clear that the targets for Broadband Britain remain unquantified (beyond a ‘best in Europe’ statement), and, despite Martha Lane Fox’s chumminess with cabinet ministers, her Race Online 2012 initiative to get the nine million Britons who have not yet tried the internet to go online “is independent of, and therefore not accountable to, government or policy strategies.”

The project argues that in addition to the question posed above, there are three others that shape the actions of market and other players. These are

1. How and at what pace can universal access to high quality, high speed broadband be realistically implemented? Is an aim of 100% access realistic or should a policy strategy consider incorporating concrete plans for intermediaries?
2. Which policy goals in relation to digital skills can be set up and which guarantees can be built in so that the most disadvantaged younger and older individuals are reached by these?
3. Which priorities can the government set for broad and sustainable engagement with ICTs by all sections of the population, (and) which sectors besides education and employers should be involved in this?

The answers are not yet in the public domain.

The project argues that the answers need to be informed by research results also published today that show the emergence of a growing “digital underclass” in Britain.

The LSE’s Ellen Helsper found digital exclusion of the most vulnerable groups has become “entrenched”.

“Gaps based on education and employment persist independent of age or other characteristics. They therefore represent a problem that is unlikely to go away even with better infrastructure or as younger generations grow up,” she said.

Helsper warned that people in these groups were the least likely to access public services as public services became ‘digital by default’, now and in future, despite needing it most.

“The market or third sector will not be able to deal on their own with an increasingly entrenched group of digitally excluded individuals,” the project said. “The policy answers have to be based on and integrated with other (social and economic) policy areas.”

Digital Britain laws to get overhaul

Three out of the 14 projects the UK Law Commission will consider over the next four years in its 11th programme will deal directly with contentious Digital Britain/Digital Economy issues.

They are:

Contempt. The commission will review the law on contempt to take account of use of the internet and other technologies and to ensure courts have the powers they need to deal with contempt in the face of the court. This follows the disclosure via Twitter of the names of people who had brought so-called super-injunctions against the press to prevent them being linked to controversial behaviour.

Data sharing between public bodies. The commission will seek to clarify the existence and nature of legal obstacles to data sharing.

Electronic communications code. This is the regulatory framework that applies to all transmission networks and services (including access) for electronic communications including fixed and mobile)telecommunications, e-mail, internet access,and content related broadcasting. The commission will consider whether the code can be more transparent, user-friendly and efficient in resolving disputes.

Two other projects in the 11h programme may also have a bearing on the digital economy. These include:

Trademark and design litigation, unjustified threats. The commission will look at whether to repeal, reform or extend four provisions that impose liability to pay damages on the makers of an unjustified threat of intellectual property litigation. This could affect rightsholders who threaten to sue for illegal downloading without establishing the true identity of the person who used the IP address at the time of the alleged theft.

European contract law. Commissioners will assess the impact of the EC-generated optional instrument that sets out which laws apply to contracts made between businesses (and between businesses and consumers) from different member states. This could affect continent-wide online shopping.

Law Commission chairman Lord Justice Munby said, “Each area of law we will examine has been identified as being flawed and at risk of creating confusion and injustice. Each demands review and reform.”

The commission received more than 200 proposals from which it picked 14. The details are on the commission’s website at www.lawcom.gov.uk