-Ted Higase is managing director Europe, Middle East and Asia at Global Crossing. The opinions expressed are his own.-

The government-proposed Digital Britain initiative is living in the dark ages, especially if its authors expect UK businesses to believe that a transmission of two megabits per second is "superfast".

Having adequate underlying infrastructure is critical to the success of Digital Britain and that requires investment and commitment to ongoing innovation. Internet foundations must be robust enough to deal with demand for business use in particular, but a successful Digital Britain needs to be about gigabits not megabits.

In the same breath, before businesses begin to jump on-board the Digital Britain bandwagon, they must understand the race to gain a competitive advantage isn't won purely on speed. The service must also be up to scratch with adequate provision to ensure the systems can cope and with alternative measures available should a problem arise.

One of the benefits that an improved communications network should provide businesses is the ability to work more flexibly, where remote workers can access networked information more effectively.

But by the time the scheme is rolled out, the changes will already seem outdated and some of the benefits unambitious. Fundamentally the customer is not interested in the speeds, only in the services they can use and in today’s climate the opportunity to cut overheads via remote or home working relies on the ability to provide employees access to rich media applications.

Video conferencing and the use of technologies like Voice over Internet Protocol (VoIP) are a much hyped benefit of faster broadband and offer the potential of cost savings, enhancements to business performance and reductions in the time and money spent when employees are out of the office environment. Thus, the UK economy will receive a much needed boost.

The industries’ reaction to the proposal has been mixed. With BT as the major provider of the underlying services for broadband, any government plan is heavily dependent on expansions of its next generation network. BT plans to roll out "super-fast" broadband of 20Mbps or more, but the company has warned that the government's Digital Britain plans may need some new thinking even to achieve this, urging the government to be more precise about what services people will use, and what performance is needed, Tim Whitley, BT's corporate strategy director said in an August interview.

For our part, Global Crossing suggests Ethernet services as a more cost effective, resilient managed service providing flexible connectivity between any two locations and avoiding dramatic speed variations in some areas. With a network capacity up to 1Gbps, this system has the capacity to achieve the desired results, not just to meet immediate needs, but to cope with long term changes and developments beyond the next few years.

Before asking businesses to invest more money in internet technologies, it's imperative that the planned foundations outlined in the Digital Britain report are robust enough to deal with the demand. Providers must put in place adequate investments to ensure issues around quality of service and, in the worst case scenario, service drop outs are avoided.

Businesses, Internet Service Providers (ISPs) and consumers need an internet infrastructure that guarantees a reliable service and that copes adequately with high levels of traffic across the country by the 2012 target. Otherwise, there is the real possibility that the UK’s businesses could fall far behind their global counterparts.

The UK government’s grand reworking of digital policy, due out Tuesday, has something for every one to chatter about — from funding for a further broadband buildout to reworking television licensing fees to how the country faces up to the issue of media piracy.

But final publication of the Digital Britain report on Tuesday follows the marked deterioration of the economic environment as well as the collapse of the political muscle needed to marshall the report’ more ambitious changes through Parliament.

Stephen Carter, the former U.K. cable executive, named as U.K.’s Minister for Communications, Technology and Broadcasting only nine months ago, plans to leave the government soon after releasing the report.

The current political crisis has Gordon Brown’s government running scared even from the restructuring of the post office. It’s hard to see the Prime Minister creating a major digital legacy for his administration starting from here.

Sanford C. Bernstein has repeatedly argued that British policy is “inching toward a managed economy” in communications. The investment firm makes a rather extreme case that the hobbled fixed-line operator BT Group could win at the expense of successful satellite TV provider BSkyB. It’s hard to see how.

The hefty interim report (click here for 86-page PDF file) calls for, among its 22 action points, a universal service commitment to broadband. But no analyst who closely follows the subject is prepared to make a commercial case for broadband buildout to underserved areas. The closest thing to business case is for high-definition video delivered over landlines. But less costly alternatives exist in most populated parts of Britain, either from satellite or terrestrial providers.

That’s why the government is involved in the first place. While cheap, plentiful broadband may sound like a great vote-getter heading into the next election, the issue is just as likely to produce a backlash when voters tally up the potential costs. At 2-megabits per second, January’s interim Digital Britain report did little to answer the broadband industry’s complaints that Britain has fallen behind in terms of the competitiveness of Internet speeds.

Digital technology policy is a dead sexy matter for politicians of all stripes to opine about. But driving through actual policies changes that would dramatically expand support for digital technology always founders when it comes time to hard budgetary decisions, vote-counting and execution.

Rather than representing a sea change in UK policy thinking about technology, perhaps the most important outcome of the digital strategy revamp will be as a marker in Britain’s slow move away from hands-off communications policies toward continental-style government regulation.

 
Image Credits: UK Dept for Culture Media and Sport and Broadband NotSpot (http://www.broadband-notspot.org.uk/about.html)

Comcast is cutting the price of its super fast 50 megabits Internet access service to $116.95 a month in most markets, less than year after launching the service at $139.95.

In fact, now that Comcast has started bundling the service with its phone and video services, subscribers will be able to get the so-called ‘Wideband’ even cheaper that $116.95. Wideband will effectively be priced at $99.95 if it is bought with one of those other services from the largest U.S. cable operator.

The new pricing strategy kicks off nationally on June 15.

Comcast has been aggressively rolling out its version of the wideband cable technology and says it now reaches around a third of the homes its systems pass in the United States.

Many Wall Street analysts think super-fast Internet access could be the killer app for cable companies rather than their traditional dominance in video. The cable operators meanwhile are concerned that programmers are giving away TV shows for free on Hulu and other websites. Their key concern is the fear of ‘cord-cutting,’ meaning that many users will end up canceling their cable TV service.

But the analysts point out that cable operators will continue to have some leverage as they’re well positioned to offer the kinds of Internet speeds that subscribers will need to deliver high-definition video pictures.

(Photo: Reuters of Austrian skier Strobl)

AT&T says it sees a lot of promise for the netbook and the connection fees that come with the devices as a growing source of revenue as consumers look to take broadband connectivity on the road. But will consumers be as enthusiatic to sign another contract for the service? Click below to hear AT&T's President of Mobile & Consumer Markets talk about what he sees as the future of the netbook.

AT&T: Netbook popularity on the rise from Reuters TV on Vimeo.

After much speculation and guess-work, President-elect Barack Obama has chosen his former Harvard Law classmate Julian Genachoswski as nominee for chairman of the U.S. Federal Communications Commission.

Genachowski, who has been Obama’s technology advisor, had been on most people’s guess-list for a new “chief technology officer” post with the incoming administration — though some outlets had called it last week on his FCC appointment.

So who is Genachowski? Well, most outlets believe he should understand the future of media as he’s held several posts at Barry Diller’s Internet media business IACI and he’s previously been a chief counsel for former FCC Chairman Reed Hundt, the chairman under former President Bill Clinton.

That experience will help with two big upcoming Internet-related issues. The first is Obama’s ambitious plan to invest in broadband technology expansion as part of his economic stimulus package.

The second more challenging issue is Net neutrality, the idea of an open and level Internet for all players regardless of their size. The FCC chair will be trying to manage the expectations of Internet service providers, content companies and everyday consumers.

But top of the list of his Genachowski’s to-do list will be ensuring the congressionally mandated conversion to digital television on Feb. 17 goes smoothly. Obama aides have backed an idea to delay the planned transition to avoid millions of televisions going blank.

(Photo: Reuters)

Keep an eye:

• Warner Bros. seeks 10 percent cost cut, could mean layoffs - (AP)
• Monster.com is taking a humorous approach in a new ad campaign (NY Times)
• Golden Globes gets smallest TV audience in years - (Reuters)

The U.S. Federal Communications Commission today ordered the largest U.S. cable TV operator Comcast Corp to change how it manages its broadband network. The regulator concluded that some of Comcast’s tactics unreasonably restrict Internet users who share movies and other material.

The 3 to 2 decision supported by two Democrat commissioners and the Republican chairman,  is precedent-setting. It could kick-start a long-simmering ‘net neutrality’ debate between advocates, who believe Internet access should always be open without interference, and some Internet service providers, who believe they should be allowed to manage Internet delivery in order to provide the best service to all users. The FCC seemed to support the former group.

“Subscribers should be able to go where they want, when they want, and generally use the Internet in any legal means,” FCC Chairman Kevin Martin said in a statement.

 Here are some reactions:

We are disappointed in the Commission’s divided conclusion because we believe that our network management choices were reasonable, wholly consistent with industry practices and that we did not block access to web sites or online applications, including peer-to-peer services. We also believe that the Commission’s order raises significant due process concerns and a variety of substantive legal questions.  We are considering all our legal options and are disappointed that the commission rejected our attempts to settle this issue without further delays.

Sena Fitzmaurice, Comcast senior director, Government Affairs

I believe today’s FCC action sends a strong message to the industry that the Commission intends to take Internet freedom principles seriously and will act to protect the integrity and openness of Internet commerce and communications.  Vigilance by regulators and policymakers, coupled with a commitment to act when necessary, is vital to thwart the emergence of new bottlenecks to competition and innovation.  I commend Chairman Martin, as well as Commissioners Copps and Adelstein, for their recognition of this fundamental tenet of realistic telecommunications policymaking. 

Rep. Edward Markey (Democrat),  chairman of the House Subcommittee on Telecommunications and the Internet.

Today’s order makes it clear that there is nothing reasonable about restricting access to online content or technologies. Moving forward, this bellwether case will send a strong signal to cable and phone companies that such violations will not be tolerated.  But the fight is far from over. A duopoly market — where phone and cable companies control nearly 99 percent of high-speed connections — will not discipline itself. We look forward to working with the FCC and Congress to ensure proactive measures keep the Internet open and free of discrimination, and accessible to all Americans.

Josh Silver, executive director of Free Pres (Free Press was one of two parties that brought the complaint against Comcast)

No one has seriously questioned the right of network operators to reasonably manage their networks.  They will continue to do so after this Order.  But, there is nothing reasonable about the use of techniques that indiscriminately target applications or protocols, regardless of their use.  This is something that anyone who cares about the free and open Internet should be concerned about.  Equally important, all free markets require transparency in order to be effective.

Gilles BianRosa, Chief Executive Officer Vuze Inc. (Vuze was the other party to bring the complaint against Comcast)

There is no longer any doubt that ISPs have the right to use network management tools to address unlawful activity - including the theft of copyrighted music.  We applaud Chairman Martin’s clear affirmation that ISPs may use technology to prevent the theft of copyrighted works.  There is a crystallizing consensus among governments around the globe that ISPs should be taking affirmative steps to address piracy on their networks.  It is our hope and expectation that ISPs here will accelerate their efforts to work with us to address online piracy.

Mitch Bainwol, Chairman of Recording Industry Association of America.

The  FCC  should  be  careful  what  they  wish  for. If network operators can’t manage traffic loads one way, they’ll need  to  do it another.  By banning  discrimination based on application  or  content,  the  FCC - and  Net  neutrality proponents  more  broadly - are  pushing  network  operators closer  and  closer  to  what  is  increasingly  their  only  viable alternative option - Usage Based Pricing.  UBP might just be the  best  thing  that  ever  happened  to  the  network  operator crowd.  And it might be the worst thing that ever happened to applications and content.

Craig Moffett, analyst Sanford Bernstein

(Photo: Reuters / FCC’s Kevin Martin)

Walt Mossberg, the world’s most powerful technology product reviewer, opened the final session of the D: All Things Digital conference with an angry tirade against the s-s-s-low state of broadband in the United States.

“WE ARE VERY SLOW,” Mossberg complained of U.S. Internet access speeds.

The target of 61-year-old Uncle Walt’s wrath was Kevin Martin, 42, the boyish-looking chairman of the Federal Communications Commission, who was punished on-stage before an audience of high-tech industry insiders.

Mossberg: “You are the head of the FCC. How have you allowed this to happen? I AM DEAD SERIOUS. HOW HAVE YOU ALLOWED THIS TO HAPPEN?

Martin: “I am not sure I am solely responsible. I am also not sure the charts capture the whole story. I think you do have to put in the context some of the demographics of the United States and some of the countries we are competing against.

Mossberg: Does that explain why we pay $12.50 per megabit in the United States as opposed to $3.09 in Japan and $3.70 in France? Why are we paying four times as much?

Martin: Yes it does. Because it costs a lot more to build out in more rural areas and people who live further apart… We have a history of averaging some of the cost to make it affordable for people in Montana.

Martin should have seen it coming. Mossberg has been on a crusade over slow broadband speeds for some time, including a call to stop calling slower-speed DSL “broadband.” It’s just one of the many things that annoy him about how computer and consumer electronics industries treat their consumers. Other pet peeves include junk programs pre-installed by PC makers Mossberg calls craplets and any device that doesn’t aspire to Apple-scale product design genius.

Here are the stats that Mossberg and Martin were debating:

(Photos: Reuters)