Time for our adolescent internet policy to grow up

One of the biggest issues to receive only a limited about of attention during the election campaign was the future of broadband in the UK and the differences of opinion between the parties on how to roll out next generation broadband networks.

Despite a vague sentence or two in each of the party manifestoes suggesting that next generation rollout was important to the country, the debate on how to actually achieve this goal was brought up at the beginning of the campaign and then neatly brushed under the carpet where it remained until it was alluded to again in the Queen’s speech.

Now at first glance, that may not seem terribly surprising. After all, technology issues are rarely big vote winners.

However, if looked at more closely, the UK’s service economy with its emphasis on entrepreneurial success needs a super-fast broadband infrastructure to remain competitive. The ability of the internet to create jobs should also not be underestimated and, in this respect, broadband could have been a vote winner.

There is a fundamental conflict at the heart of our new coalition government when it comes to next generation rollout.

The Conservatives have always recognised that the scale and cost of an upgraded broadband infrastructure was beyond the means of government spending, even in the good times. As a result, private investment needs to be harnessed to make things happen in an efficient and affordable way.

It is acknowledged that there will be some remote areas of the country where it simply will not be possible for private companies to justify the expense of upgrading the internet infrastructure for such a small number of customers at the other end.

However, the Conservatives plan to use some of the BBC licence fee for this purpose as a way of ensuring the upgrade is complete across the whole country, redirecting to better use a charge on households that is already fixed until 2014.

The Liberal Democrats have previously disagreed with the Tories on how to pay for next generation networks, favouring instead Labour’s plans for a Broadband Tax, adding 50p per month to the cost of a landline telephone bill.

The introduction of an additional tax that does not address the national deficit is likely to be very unpopular at a time when the coalition government is going to be forced to make a lot of other difficult and potentially unpopular decisions, and the Queen’s speech has rightly confirmed that the 50p tax will not be pursued.

Broadband policy has been given to the ebullient Ed Vaizey, whose ministerial role will straddle the Department for Culture, Media and Sport (DCMS) and the Department for Business Innovation and Skills (BIS), which is led by the Liberal Democrat’s Vince Cable.

Vaizey, and the new Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, formed David Cameron’s shadow creative industries team and are well versed in the previous administration’s Digital Britain report.

They believe, rightly, in the importance of private investment, in the need to empower private companies to take this risk, which is vital if the future of British broadband is to be resolved quickly, and in creating conditions, such as duct sharing, in which competition between providers can develop.

Despite promises in the Queen’s speech to make this issue a priority, this will still be a difficult one for the coalition to resolve, but that does not make it any less important and progress must be made in the near future if the UK is to remain globally competitive.

Hitherto, the UK has relied exclusively on Virgin Media to bring high speed broadband to our homes and businesses. Abetted by regulatory dithering, BT has delayed its own fibre access investments.

If Britain is to emerge from the global economic crisis as a competitive and entrepreneurial nation then it needs to have the tools in place to help it co mpete. Broadband policy has stumbled through too long an adolescence; now is the time for it to grow up and face its responsibilities.

Professor Martin Cave is a leading telecoms economist.Martin.Cave@wbs.ac.uk