"Digital Britain" report falls flat

A much-anticipated effort by the British government to outline how broadband networks will be the backbone of a recovering digital economy today landed with a bit of a thud. The Digital Britain interim report touts the broadband network and digital technology as the equivalent of “roads, bridges and trains were in the 20th Century" and recommends requiring 2 Megabit per second connections into every U.K. home, but was very short on specifics and didn’t address issues such as funding and regulatory requirements for fiber networks and division of 900 MegaHertz spectrum for wireless broadband.

A previous report from U.K. regulator Ofcom had opposed government financing, said Ovum Research senior analyst Matthew Howett, because “there was still room for private financing to work.” But in the wake of the current credit crunch, there were high expectations that the Digital Britain report, presented by Stephen Carter, minister for Communications, Technology and Broadcasting, would spell out how the U.K. government would address broadband stimulation.

“[Carter] looked at what action needed to be taken to secure the future, and there was a lot of build up for this report, and the expectation that outstanding issues would somehow be solved,” Howett said. “This didn’t live up to that expectation. But it is only the interim report, there is time to offer more concrete ideas before the final report next summer.”

Part of the concern is that time is of the essence as the British economy suffers through recession, Howett said, and the longer regulatory uncertainty remains, the less likely private sources – already credit challenged – are to invest.

Already, a competitive market is providing broadband service at 3 Mb/s to 99% of U.K. residents, but reaching the last percentile is expensive, Howett said. In other European countries, particularly in Scandinavia, municipal funding has been combined with private funding to build open access local fiber networks, he said.

“It’s a little bit disappointment not to see any of this in Digital Britain report,” he said. BT is hesitant to invest heavily in fiber optic access networks “unless they are able to get a decent rate of return,” Howett said.

The other major looming issue that the Digital Britain report didn’t address is the squabble over 900 MegaHertz spectrum. The report does include a five-part plan for modernizing radio spectrum, but most of those recommendations essentially require Ofcom to find solutions.