Racing online (well, jogging there, anyway)

A belated welcome for Martha Lane Fox’s Race Online 2012 initiative, launched last week following Lane Fox’s re-confirmation in her role as Online Tsar (having performed, well, exactly the same role for the Labour government). Continuity can, sometimes, be a good thing even in politics.

Some things in the initiative look a bit odd: figures like how much boost to the economy is given by job applications being filled in by currently ‘non-line’ unemployed job applicants do smack of desperation to grab headlines and of trying to compete in the public space; there may well be 10m ‘non-liners’ in the UK but not all these will be of the initiative’s ‘working age’ target group; there is a somewhat hectoring tone to the initiative’s public comment; and, crucially, public spending cuts mean that this part of public policy is going to be increasingly dependent on private sector support – a tautology, in my view, and an ultimately self-defeating one at that.

Nevertheless, the online world is an exciting one and, even if it’s not for everyone, it’s ultimately socially and economically beneficial for people to be wired up – although the Race Online slogan of ‘We’re all better off when everyone’s online’, apart from being a little cumbersome, does look as if it was sponsored by O2 (‘We’re better, connected‘).

Anyway, I was given the chance to recycle this rather old news by the current edition of The Guardian‘s Datablog – which also gave me the chance to re-hash another old theme of mine: that of the cheapness of broadband in the UK. The Datablog produces OECD figures which show that broadband in the UK is just about the cheapest anywhere, whether in terms of purchasing power parities or at nominal exchange rates.

Two points arise, really:

– firstly, the cost of broadband appears not to be an obstacle to getting people online (or, if it is, we’re really in trouble). It is, consequently, behavioural issues that Race Online will have predominantly to tackle if it is to achieve its aims.

– secondly, where is the money going to come from to roll out high speed broadband across the UK? It certainly ain’t coming from consumers’ pockets – not at these prices – and one of the little-appreciated aspects to the Labour government’s proposed landline duty was that it would have shared back a small part (a very small part) of the declining household fixed voice and internet/broadband consumer bills since 2005 as measured by Ofcom (Figure 4.55). Cheap bills for households might seem to be a good thing on the face of it, but there are two problems: it sets a falsely low value on a worthwhile commodity; and a market trend of more and more bandwidth at ever cheaper prices is, ultimately, going to come crashing down as a result not least of an inability amongst network operators to finance the necessary investment.

Openreach’s Steve Robertson today commented that high-speed broadband requires public funds of around £2bn if the government’s ambitious goals are to be realised – words which critically step up the pressure on the coalition. I await the results of tomorrow’s conference aimed at mobilising companies with interest. But, for now, it is increasingly apparent that confidence and hubris are not going to be enough: public policy goals require a public finance commitment if they are to be achievable.

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