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)

Whatever it is that drives Rupert Murdoch’s offspring out of the businesses he owns may also bring them back.

Could Elisabeth Murdoch return to daddy’s fold? Sure, according to a glowing profile in the New York Times on Monday of Rupert Murdoch’s elder daughter from his second marriage.

Once ruled out as a possible heir to Murdoch’s News Corp global media empire after her 2000 departure from Murdoch-controlled BSkyB to strike out — quite successfully — on her own, she stirs speculation anew over a possible return … someday.

NYTimes: “Could I foresee a day going back to News Corp.?” she said. “Yes, I could. Do I know how, or when, or what shape that would take? No. I don’t really ever want to leave Shine. So I don’t know how it would happen one day, but it’s certainly not out of the cards.” 

Lachlan Murdoch, Murdoch’s elder son, also left his post as deputy chief operating officer of News Corp in 2005, and is also seeking out media investments.

Elisabeth explains why the apples never fall far from the tree: In growing up Murdoch, she said, “Media was never a choice. You either have it in your veins or you don’t have it in your veins. I couldn’t imagine why you would want to do anything else.”

Will James Murdoch, anointed the heir apparent after his return to News Corp last year to run its Asia and Europe operations, have competition?

(NYTimes)

Keep an eye on:  

• MySpace close to a deal with major record labels like Sony BMG and Warner over a digital music joint venture. (NYPost)
• CBS has nuked “Jericho,” the low-rated post-Armageddon drama that was briefly brought back from the dead by fan demand. (Hollywood Reporter/Reuters)
• The Wall Street Journal’s transition to more breaking news and shorter articles will continue in the coming weeks with a makeover of its Marketplace section. (NYTimes)
• Traditional media companies jumps on the vertical ad network bandwagon.(AP)