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What does the new coalition government have in store for the Internet industry?

Well this month has seen history made with the formation of our new coalition government. As David Cameron and Nick Clegg start out on their new partnership we take a look at each party’s previous stance on several topical industry issues and suggest how we think the new coalition government will go about tackling them.

Darren Farnden, Head of Marketing

Darren Farnden, Head of Marketing

Reviewing the DEA

Let’s start with one of the industry’s biggest issues. The DEA (Digital Economy Act) has been one of the most talked about topics with debate starting right back at its conception, but the most infuriating thing of all about the DEB was the ridiculous way in which this controversial Bill was rushed through the wash-up and into law.

During the election campaign the Liberal Democrat’s Nick Clegg stated that he believed this was a “stitch-up”. He said “We did our best to prevent the Digital Economy Bill being rushed through at the last moment. It badly needed more debate and amendment, and we are extremely worried that it will now lead to completely innocent people having their Internet connections cut off. It was far too heavily weighted in favour of the big corporations and those who are worried about too much information becoming available. It badly needs to be repealed, and the issues revisited.”

Did he really do his best to stop it being rushed through? Well I don’t think failing to turn up to vote against it during the wash-up really reflects an ambition to stop it! Regardless, it is now law so the question needs to be – when will he repeal it?

Surprisingly, it looks like that is going to be sooner rather than later. Earlier this week Nick Clegg announced his commitment to repeal part of the DEA, in particular the parts concerning disconnection from the Internet and other ‘technical measures’ in response to  illegal copyright infringements aswell as the taking down of websites. He stated “Conference urges Liberal Democrat ministers and MPs to take all possible steps to ensure the repeal of those sections of the Digital Economy Act 2010 which are inconsistent with policy motion Freedom, Creativity and the Internet as passed at Spring Conference 2010.”

It will be interesting to see just how influential Mr Clegg now is within the coalition government as the Conservatives originally supported the Bill and the manner in which it was passed through the wash-up. For his part, David Cameron stated “We had a decision at the end of Parliament: should we try and stop this Bill altogether or should we allow it to go through”. We all know what happened next.

So will we get our DEA review? Let’s hope so. At the moment it looks positive, although the extent of the review and the final outcome is anyone’s guess. It will be interesting to see how our new coalition government works together on this one to solve the previously opposing LibDem and Conservative views.

But it’s not just the way in which the Bill was passed into law or simply the tackling of illegal file sharing that is of concern. The DEA also contains the 2Mbps USC and additional plans for tackling the Digital Divide and it originally contained the [later dropped] controversial 50p broadband tax. So what does the new government have in store for these topics of debate?

50p broadband tax

The Conservatives were extremely vocal in their disagreement of the 50p broadband tax throughout their election campaign and clearly stated that if they were elected they would not re-introduce the tax, instead opting to ‘encourage’ network providers to expand and open up their networks and, if necessary, utilise the BBC’s digital switchover budget to help fund the rollout of the 2Mbps USC. However, the Lib Dems preferred Labour’s original 50p broadband tax proposal.

I suspect the Conservatives will win this fight, as the original 50p broadband tax proposed by Labour was extremely unpopular with multiple stakeholders. The Conservatives’ approach gives the industry a chance to solve the issue themselves first with financial support from an existing fund if required. Personally, I think we will see the Conservatives’ approach win here, although only time will tell if it is successful and we can at this stage only wonder how network providers will be ‘encouraged’ to expand their coverage. This will be an interesting one to watch.

Superfast Broadband

OK, so we have discussed how they will ‘fund’ the Digital Divide either with a tax or through encouragement and further BBC based funding if necessary, but what do they actually think about the controversial 2Mbps USC. Whilst many within the Internet industry have repeatedly argued that 2Mbps is not enough, especially not to position Britain as a world leader in broadband provision, most of the political parties were in agreement of the USC providing 2Mbps access to all by 2012. However they do disagree on superfast access beyond this.

The LibDems appear to mainly agree with Labour, supporting a next generation access target of 40Mbps to 90% of the population by 2017. However the Conservatives have been more ambitious, proposing 100Mbps broadband access across most of the population by 2017. They fail to define ‘most’ though.

However this all seems a pointless argument as BT is already undertaking trials of FTTP (Fibre-to-the-Premises) which provides up to 100Mbps access, has already launched FTTC (Fibre-to-the-Cabinet) products alongside a number of other providers and has already pledged to increase fibre based coverage to 66% by 2012.

The Interception Modernisation programme (IMP)

Another highly controversial issue that the new government has been especially vague about is the IMP. In their original coalition agreement they pledge “An end to storing Internet and email records without good reason” but we are still waiting for further expansion on this.

Many privacy advocates will read this as a potential and much awaited end to the IMP, yet the lack of clarification from either side and the expected backlash from the security and police organisations makes me think this is unlikely to be that straightforward. The IMP is a huge project with an immense cost that effects every UK citizen and I would not expect it to be withdrawn based on a single ambiguous sentence within the initial coalition agreement. This is definitely one to wait and see on but don’t hold your breath.

Bye Bye Mandy!

Over recent years the Internet industry has had many run-ins with Lord Mandelson, mainly due to the fact that he introduced the DEA and that he was responsible for many of the most controversial aspects of the original Bill. However, with the election of the new coalition government it is time to say goodbye to Lord Mandelson in his role of Secretary of State for Business, Innovation and Skills and cautiously welcome his direct replacement, Vince Cable.

It’s also been reported that a new position of Minister for Broadband is likely to be created and rumours suggest Ed Vaizey is a likely candidate for the role.

Let’s hope Mr Vaizey is more open to a balanced discussion, listening to the views of all industries affected by the reforms and less concerned with simply serving the demands of the entertainment industry.

Unfortunately we don’t get rid of Mandy that easily. As a life peer he will no doubt continue to be vocal from his seat in the House of Lords. If that isn’t reason enough for electoral reform of the second chamber, then I don’t know what is. I’d like to say it’s been a pleasure but….

UPDATED: 2pm 20th May 2010

Shortly after this article was published the government published their coalition agreement which states “We will introduce measures to ensure the rapid roll-out of superfast broadband across the country. We will ensure that BT and other infrastructure providers allow the use of their assets to deliver such broadband, and we will seek to introduce superfast broadband in remote areas at the same time as in more populated areas. If necessary, we will consider using the part of the TV licence fee that is supporting the digital switchover to fund broadband in areas that the market alone will not reach.”

Whilst this clarifies their plans to implement ‘superfast’ broadband by encouraging BT and other network providers to “allow the use of their assets” and confirms that digital switchover funds will be used if necessary to reach the most rural areas it doesn’t provide any further detail on the other topical issues such as the review of the DEA or the future of the IMP. I guess we will just have to wait and see on those subjects.

UPDATED: 4pm 26th May 2010

Despite the LibDems earlier promises, it looks like our hopes of a DEA repeal have been shattered. Jeremy Hunt, the new Secretary of State for Culture, Olympics, Media and Sport has confirmed that the Act will not be repealed and its implementation will continue. Unsurprisingly FAST (Federation Against Software Theft) has announced their support of the news, whilst many within the Internet industry including Entanet, will be more than disappointed.

In related news, Ofcom has advised that ISPs with less than 400,000 subscribers are likely to escape the initial crackdown on illegal file sharing, although the final code of practice is not due until the end of the month and may include smaller ISPs in the future.

UPDATED: 3.30pm 23rd June 2010

It looks like we were right about the 50p broadband tax. This week the Government confirmed that it will not be re-introduced but we will see a rise in VAT across all products and services from next January – ThinkBroadband.com: 50p broadband tax dropped, but prices will rise.

Have your say!

How do you think the new collation government will affect the Internet industry? Do you think we will get our requested DEA review? What do you think is the best approach to providing ‘superfast’ broadband? Let us know your views on any of these topics by leaving us a comment below.

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