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Three days after he unveiled a vision of Britain’s digital future – and how the taxpayer is going to pay for it – Lord Carter, the communications minister, is already eyeing a summer flit to France.
For the man who hopes to see Britain carpeted with superfast fibre-op-tic broadband, it is a double-quick exit from the government.
Carter, former chief executive of the media regulator Ofcom, who has also run NTL and the J Walter Thompson advertising agency, insists it was always part of the plan.
“New ministers arrive, take a brief and run with it,” he said, drinking lemon tea in his Westminster office at the Department for Business, Innovation & Skills. “The next stage [of Digital Britain] is a much more traditional role of political and Whitehall delivery. I am not a professional politician and I have never had an ambition to be one.”
Who carries forward his plan in the final months of this Labour government remains to be seen. Someone will be needed to lead a battle with the BBC after Carter said a £130m slice of licence-fee money should be diverted for the first time in its 87-year history to guarantee regional news bulletins on ITV.
On top of that, Carter has concluded that the national network of optical fibre, promising internet speeds of more than 40Mbps, will require a £1 billion subsidy funded by a £6-a-year tax on every telephone line in Britain. Hardly a vote winner.
BT and Virgin Media, which stand to benefit most, were overjoyed. Others such as Carphone Warehouse and BSkyB were furious.
To those who say his Digital Britain report was long on ambition but short on resolution, Carter believes his legacy lies in infrastructure. He counts the liberalising of mobile-phone spectrum, switching radio from FM to digital by 2015 and a better broadband network as changes that should foster a digital economy.
However, he points out that the first thing that will have an impact is that the government will spend its annual £15 billion IT budget in a more coordinated way.
“The role of government as a procurer and the way in which it helps set standards will have a significant lasting effect,” he said. There are also big plans for e-government, including a digital switchover of public services that would make applying for a student loan or registering for the electoral roll almost exclusively an online process by 2012.
Back on the telephone tax, which is intended to run from next year, Carter said that nobody had told him behind closed doors it was a bad idea. “Publicly they seem to be saying it, but privately they are not.”
Why could he not extract money from the Treasury? “There are a lot of demands on the public finances right now and it seemed to us that, in this market, we have a hypothecated tax at the moment, called the licence fee for content. If we want a fixed, optic-fibre infrastructure that covers virtually the entire country, can we find a way of having a small fixed levy to facilitate the building of it? We are trying to do that in a very forensic manner.”
At the BBC, he believes he can enshrine the wider distribution of 3.5% of its £3.6 billion licence fee to other public-service providers without damaging the corporation’s future – something Sir Michael Lyons, the BBC Trust chairman, is fighting hard against. “It is not the BBC licence fee, it is the television licence fee,” said Carter. “In the law, the government of the day is required to decide how much of that fee goes to the BBC.”
There lies one of Carter’s problems. Whatever Digital Britain puts in train, the Conservatives can unpick should they seize power next year, including the next BBC licence fee negotiation in 2013.
He denies that any of his project’s overarching ambition has been curbed by the government’s vulnerability, including no definitive resolution to the future of state-owned Channel 4. “It is good political froth but it really is not accurate,” he said. “I don’t know what it is that people are saying we should have been more determinative on.”
Talks to create UK joint ventures with BBC Worldwide to prop up C4’s finances, have yet to yield a deal. The government will increase the BBC’s borrowing headroom if it helps but Carter said he never wanted to force them together.
“That would have been the government imposing, that would have been wrong,” he said. “As the government, whenever you do something that affects the market, you have to get the public policy objective with minimum market distortion.”
His crackdown on internet piracy starts with internet service providers (ISPs) sending letters to repeat offenders and passing data to music and film companies to give them the chance to prosecute. But it could take another 12 months before Ofcom has the leeway to use powers to slow down offenders’ connection speeds and block certain websites.
If Carter is frustrated by the reception Digital Britain received, he is hiding it well – mostly. “I would say to the cynics: most of them are not queueing up to give their lives to public service,” he said. Carter did briefly, but then, like the fastest internet connection, he sped off.
WHO DOES BEST
WINNERS
BT:stands to benefit from a £1 billion subsidy for a national optic-fibre broadband network.
Radio:switching off FM signal by 2015 will save millions.
Mobile operators:tax on phone lines will drive people to mobiles.
Computer games:could get tax breaks like those for the film industry.
Local newspapers:easier merger regime.
LOSERS
BBC:diverting £130m of the £3.6 billion licence fee for the first time to pay for ITV regional news will loosen its grip on its income stream.
Film and music makers: still subject to losses from illegal downloading, which costs the industry about £500m a year.
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