Digital Economy Bill YouTube Questions

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So, if we take a moment to look at the following responses to questions that the leaders of the three parties involved in the “Digital Debate” on YouTube gave, concerning the Digital Economy Bill:

Sure, we get some tired old rhetoric, as expected. However, the key point here is that both Labour and the Conservatives appear to believe that they’ve done the right thing with this bill. Combine this with the fact that Gordon Brown mentioned a broadband rollout as part of the few ideas that he could during one of the debates, and I think that it starts to become apparently that politicians do not understand the UK “Internet” industry. Where there can be comments as to who is being “looked after” by each party (Cameron even mentions that the bill is most important for the media producers (or ‘rights holders”)) - I think the problem here is that politicians in the UK fundamentally do not understand how this industry operates. I think increasingly we are going to see the UK fall behind in terms of what we can roll-out due to impractical over-taxation, and ideas such as those put forward in the DEA.

Looking simply at two issues:
  1. Fibre Taxation - in the UK, if a business is to light up a fibre pair, as well as any standard taxes (e.g. VAT) that must be paid, then an additional VoA Business Rate is due on these fibres. This can be up to 500/pair/year outside of London, and 600/pair/year in the London metro region [source: Valuation Office Agency].

    Let’s look at what this does for the telecommunications industry in the UK, especially for small players. Since such a company probably does not have a DWDM system, then the relatively cheap fibre runs are now taxed quite highly, should such a company then want to start increasing their capacity, then the additional costs are inflated due to taxation. Where larger players might be able to split these rates over a large number of DWDM channels (up to 32 or 64) a smaller provider might only have one channel - and hence the cost of infrastructure or customer links for smaller companies is inflated, due to the fact that they cannot justify the CapEx required for such multiplexing systems. Even for larger players, this isn’t encouraging large scale fibre build out. If tax is paid per route-KM for every FTT{H,P,C} deployment, then this adds an additional overhead (in avoidable taxation!) to any such roll-out. Hardly an incentive for a commercial entity to begin such a deployment! Alongside the CapEx, OpEx, and business rates you are required to pay - the UK government will tax you just for lighting up the infrastructure they are encouraging you to build! This alone is not helping with any of the three party’s plans for any kind of broadband roll-out, especially to rural areas where there is no profit for commercial entities to roll out such technologies.
  2. Digital Economy Act - Andrew Cormack of JANET (UK) gave an excellent presentation at UKNOF relating to the DEA. There are two key points here:
    • The government (and apparently the Tories) believe that this bill being pushed through in “wash-up” was the right thing to do. Contrast this with the fact that they also appear to be stating that the digital economy (and communications that such an economy provides) is key for Britain. I agree it’s key, we’re a services based economy, and if more services can be provided utilising the Internet, then one of two things will happen. Either the UK will not be equipped to deliver such services globally, and the “Digital Economy” will mean that these can then be out-sourced to other countries - or the UK will be in a position to grow the services that it can deliver, with the considerable skill of the UK workforce, into both global and European markets. Any bill therefore, that affects the manner in which this “Digital Economy” (by which I’m now referring to ISPs and telcos), should therefore, one would have thought, justify reasonable debate by the fully attended (?!) Commons!
    • Westminster appears to have no idea as to who they are legislating for. I am not against ensuring that the creative industries are able to protect their rights - however, this needs to be done in a manner that can be policed without damaging another industry. As Andrew said in his presentation the Government is unsure of how many ISPs are in scope - stating it could be 5, 10, 20 or 450. How can the impact of legislation be considered, if the Government cannot identify the scope? In addition, whilst many rights holders, I would imagine, will say “well, there is very little that is being requested of the ISPs here!” - the technical challenges of implementing mechanisms whereby specific IP addresses, and users can be located, within the timeframes that such complaints appear to take to be progressed, should be costed. I believe that most people within the xSP industry are not going to say “We don’t care about your rights as a content producer”, however, how can the Government expect our industry to pay directly to police this? We don’t care that customer X is pulling data A, B and C - really, once it comes down to working in a larger ISP, we care about getting bit X to endpoint Z whilst ensuring any commercial guarantees that we have made for bit X.
    Another concern following these points is that it appears that very few of the UK ISP industry are being directly consulted here. Whilst there may be involvement - it’s not something that I have seen mention of particularly amongst smaller ISPs in the community. Government should remember that legislation such as this affects all enterprises within this sector, and hence should consider them. The role of incumbents within this country already affects the delivery of many services, we don’t need further legislation to push things further into their favour.
The reason I feel the need to mention this, is that it aggravates me whilst seeing responses such as the above. Politicians cannot absolve themselves of blame for such issues being pushed through in what I feel is quite an undemocratic manner. I’m still not sure who I am going to vote for - but as far as I see it, the huge lack of understanding of the industry within which I work will mean that whoever is in power during the next Parliament will likely not be in the right place to make legislation that actually takes into account how this industry works. Because of this, the UK’s economy will suffer - which is a great shame.