Shaking off the shackles of deregulation

Take a state-owned telco, throw in some austere hardware, a closed, switched phone network and a technophobic population. What do you get? A recipe for world beating ecommerce.

Now take a deregulated multinational, throw in some innovative hardware, a diverse communications infrastructure and a technophile population. What do you get? Some £30bn of debt, credit downgrades, a sell-off of territorial assets to direct competitors, several nights of long knives in the boardroom and global ecommerce ambitions hobbled at the starting gates.

The first example refers to France in the 1970s, which was teetering on the brink of recession in the wake of the oil crisis. The second refers to BT today. In France then, as in the UK today, the government saw an inclusive, information-rich culture fed by technology as the way to build a robust economy.

In 1974, only 12 per cent of France's domestic population owned a telephone and, fearing global recession, the French government set out a bold strategy to roll new electronic services out to the French populace.

Just over a decade later, France Telecom had extended a mainly digital network to more than 90 per cent of the French population, and between 1982 and 1991 distributed five million Minitel dumb terminals free to households.

Despite being a closed network, the Teletel network of terminals and servers was the first commercially successful hybrid of computers and telephony and, six years on from its 1982 launch, boasted 40 per cent of the national population buying goods and services online. Tony Blair would surely love to trumpet such success.

In the UK, eurosceptics eye their nearest neighbours with suspicion. But the French know how to get a Grand Projet off the ground far better than we do.

Projects for the people

This is because they invest directly into projects that will be to the greater good of the population: the transport infrastructure, new stadia, world-class architectural developments, you name it. They get built, they work and their vision is rarely compromised.

The British way, meanwhile, is ... well, pick any grand project over the last 20 years and draw your own conclusions. Legend has it that market forces lead to a trickle-down of quality, efficiency and innovation, despite evidence that these promises run aground when they hit one obstacle in particular: land, and all the vested interests associated with it.

In the UK, he who owns the land, or any network built on it or under it, commands the surrounding economy, and no amount of public/private partnerships, cross subsidising or deregulation will make public services work efficiently under such circumstances.

The French way is not perfect, of course: it encourages nationalism, while the UK has the advantage of being a more diverse society, but if it's a Grand Projet to service that diversity you're after, then you need central investment.

So, the time has come to consider whether a state telco and a non vendor-centric strategy would better deliver on the Government's ambitions to make the UK a hub of global ecommerce.

But if we are to leave it entirely to market forces, monoliths and near monopolies, then we will have to live with our ambitions hamstrung by vested interests, shareholder (rather than customer) value and acquisitive giants that have bought the ear of the policy makers.