The Government’s plan to add 50p per month to all phone bills to fund next generation broadband networks in rural areas will result in at least 100,000 low income homes being forced to give up their broadband lines. That’s according to Charles Dunstone, CEO of TalkTalk, the UK’s largest provider of broadband to homes.

Later today (Monday 2nd November) TalkTalk’s director of strategy and regulation, Andrew Heaney, will give evidence to the BIS Committee, to outline the company’s concerns. The tax, first proposed in the Digital Britain report in June, has not been the subject of any public consultation. The proposed taxation scheme will last for around seven years, beginning in 2010, raising £40 from every home; a total of about £1 billion.

“This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high priced super fast broadband services,” said Charles Dunstone.

“As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the Government’s plans to tackle digital exclusion by increasing uptake and use of broadband.

“Crucially the scheme is likely to delay next generation broadband roll-out in rural areas rather than hasten it as private investors will wait for public funds to be made available. This will mean that much of the tax will be wasted investing in networks that the private sector would have built themselves anyway.

“I understand that this levy was devised at the last minute after the Treasury refused to make funds available, presumably because they thought it was a bad use of public money.”

TalkTalk will also express concerns to the BIS Committee that the Government has dodged proper public debate on this important issue by including the levy in the Finance Bill which traditionally is not consulted on.

TalkTalk supports well-targeted government aid for broadband and it has backed the universal service commitment to deliver 2Mbps broadband countrywide. However, TalkTalk believe that public funds must be focussed on delivering essential basic services (not for premium services that few want and only where the private sector has been unable to meet demand.

TalkTalk’s views is that it may well be that public funds are needed for next generation broadband but also that we are several years away from that point. Introducing an unfair tax now, according to the UK’s largest provider of broadband to homes,  is premature and will be counter-productive. The Government and Ofcom should, in its view,  focus on enabling private sector investment and ensuring effective competition.

“When broadband first started people said the networks would only reach 60 per cent of the population,” said Charles Dunstone. “The private sector, unaided, actually got to 99 per cent coverage, far further than in most other countries.

“We now need to let the private sector drive next generation broadband as far as it can. Public funding at this stage – in what appears to be an effort to ‘keep up with the Joneses in Korea, Singapore and the Netherlands – is simply going to waste customers’ money and slow down roll-out.

“To tax all phone customers is not even robbing Peter to pay Paul, it’s just robbing Peter.”

About seven million* homes and small businesses are vulnerable to Wi-Fi hijacking and so at risk of being wrongly disconnected from the Internet according to a new study into broadband security released today.


The study coincides with today’s launch of a campaign against Lord Mandelson’s plans to disconnect people suspected of illegal filesharing without a trial.


Don’t Disconnect Us (www.dontdisconnect.us) has been initiated by TalkTalk, Britain’s biggest provider of broadband to homes. The campaign’s website sets out three principal objections to Lord Mandelson’s plans;


1.  It by-passes the courts and gives rightsholders quasi-judicial powers


2. It exposes millions of people to false prosecution since it is based on an approach where those suspected of illegal filesharing will be presumed guilty and have to prove their innocence in order to avoid being falsely disconnected


3. It will do little to tackle illegal filesharing since the main offenders will easily avoid detection by using other people’s broadband connections to download content or encrypting their activity.  Indeed the proposed measures will increase Wi-Fi and PC hijacking and so increase even further the chances of innocent customers being wrongly cut off


The risk of innocent people being disconnected is not hypothetical. Consumer organisations such as Which? have been contacted by dozens of people who have been wrongly accused of filesharing by rightsholders who used a similar method to the one Lord Mandelson is suggesting.


Last week a knowledgeable Parliamentary committee, Apcomm, came out squarely against Mandelson’s disconnection plans saying “this approach [disconnection] to dealing with illegal file-sharing should not be further considered”


The Don’t Disconnect Us website provides a hub for people to learn the latest views on tackling illegal filesharing from around the world, a forum to discuss the issues and a link to a petition on the No 10 website where opposition to the plans can be registered.


The survey of 1,083 Wi-Fi connections, which was conducted by TalkTalk, found that 5 per cent of connections were completely open (ie no security at all), 36 per cent used WEP which is easily hackable and 56 per cent used WPA which is currently fairly secure, though a vulnerability has already been detected meaning it could become hackable soon. Only 3 per cent used the most secure form of protection, WPA2.

Find out more

A new YouGov poll commissioned by the Open Rights Group provides a response to Government proposals to force ISPs to disconnect suspected illegal downloaders.   Nearly 70% of those surveyed said someone suspected of illegal downloading should have a right to a trial in court before any restrictions on internet use were imposed.

Sion Simon, the minister for the internet, insists that disconnection is a last resort.   The growing backlash from internet users, camnpaign groups and now an all-party Parliamentary motion urging a rethink of the policy.   Barely 16% of respondents to the YouGov survey supported automatic curbs based on accusations by copyright holders such as musicians.

The core complains from ISPs is that the proposals require them to bear the costs of protecting a third party’s rights, namely the rights of the copyright holder.   In a context where illegal filesharers can avoid detection by encrypting traffic, or by hijacking someone else’s IP address or Wi-Fi network you can imagine the nighmare involved in policing the proposals.

In other results from the survey, 73% of respondents said they would find their ability to use vital commercial services, such as shopping and banking, completely disrupted or fairly harmed if they were disconnected.  

Last week’s inquiry into the issue of file sharing by the all-party Parliamentary communications group concluded:

“much of the problem with illegal sharing of copyrighted material has been caused by the rightsholders, and the music industry in particular, being far too slow in getting their act together and making popular legal alternatives available . . . . We do not believe that disconnecting end users is in the slightest bit consistent with policies that attempt to promote eGovernment, and we recommend that this approach to dealing with illegal filesharing should not be further considered.”

Ministers continue to stress that requiring Ofcom to demand ISPs take technical measures against people who repeatedly ignore the law, such as capping broadband speed or filesize, is a last resort.

• File Sharing: The Risks
• Music for life – get 50 free downloads

In a narrowly won vote, the French National Assembly passed a draft law that means that illegal downloaders will be disconnected from the internet.

The French policy on piracy has drawn global attention and seems to confirm the hard line stance taken by Lord Mandelson, here in the UK.

The French Socialist Party will appeal to the French Constitutional Court, the highest in France, in the hope that this draft law – like an earlier version – will be declared unconstitutional.

The proposed legislation operates under a three strikes system similar to that mooted by Lord Carter’s Digital Britain report. 

Consumer groups in France have warned that innocent people may get punished.    In addition, the European Parliament is currently considering whether depriving people of their internet access is a breach of human rights.

The proposed ban on access to the internet for repeat offences related to illegal downloading, announced yesteday, drew criticism from both civil rights groups and internet service providers.

Treasury Minister Stephen Timms said that previous plans to restrict users’ broadband speed didn’t go far enough.   Instead the Government proposed the possibility of blocking offenders’ access to download sites as well as banning them from the Internet altogether.

The Open Rights Group, which protects civil liberties in the area of digital technology, said any suspension would “restrict people’s fundamental right to freedom of expression.”

The British proposals shine a spotlight on those Internet Service Providers (ISPs) which host file-swapping sites and requires them to identify and take action against offenders.

The new government proposals require ISPs to issue written warnings to subscribers whose IP address has been spotted on an illegal download site.   Copyright holders would use court orders to access details of any warnings issued by the ISPs, leading to the possibility of civil lawsuita against a suspected offender.

It is relatively easy for determined filesharers to mask their identity or their activity to avoid detection.   In addition, ISPs are understandably uneasy at being asked to ‘police’ the Internet and their members’ Internet usage in this way.  Moreover, there is the blurred issue of content that is available to copy, and defining that from among the massive proliferation of content online will be an expensive and ongoing process.  As usual, the costs of administering such a scheme will fall to ISPs as will the burden of having to explain to users why their connections have been terminated.

The Open Rights Group, which protects civil liberties in the area of digital technology, said any suspension would “restrict people’s fundamental right to freedom of expression.”

But the British Phonographic Industry, which represents the recorded music industry, said the move was “a step forward that should help the legal digital market to grow for consumers.”

As we reported when the Government’s Digital Britain report was released, this is a sledgehammer to crack a nut in that it appears to crompomise all our right to privacy to protect commercial interests.

Related Article – File Sharing: The Risks

UPDATE

In a letter to the Guardian today (27 August 2009), Lord Mandelson has denied that his meeting with David Geffen influenced  the government move to cut-off illegal peer-to-peer filesharers from their internet connections.

He wrote: “The subject of internet piracy was not discussed during our meeting”

“Work on this started long before my holiday in August, with officials submitting advice to DCMS ministers and myself on 3 July. This set out a possible change in thinking and was not the result of any single conversation but followed engagement with a wide range of stakeholders.”

According to the Digital Britain report recommendations ISPs operating within the UK will be required to cut illegal file sharing on their networks by 70% within a year.   New powers will be granted to the communications regulator Ofcom, the report says.

ISPs will be asked to collect data about alleged infringers of online rights.   This infringement can take the form of downloading or uploading content without the prior permission of the rights holder.   ISPs will also be asked to notify infringers that their conduct is illegal.

Persistent infringers may see their details shared with rights holders.   These could include music, film,  games and software companies.   Legal proceedings would follow.

The proposals are set out in chapter 4 of the 245-page report, which is titled “Creative Industries in the Digital World”.

If Ofcom does not see the 70% reduction in filesharing it expects,  government will require it to use its powers to introduce further measures such as the blocking of particular sites and methods of transferring data online in addition to capping the speed and capacity of offenders’ connections.

Your ISP and the Data Communications Bill

What internet users really think about P2P and file sharing

The Digital Britain report’s findings were outlined today at 3.30pm in the House of Commons by Ben Bradshaw MP, Secretary of State for Culture, Media and Sport.   

Analysis and review seem preponderant at the expense of meaningful initiatives.   For example. minimal investment in broadband rollout.   Instead a ‘tax’ is proposed to meet the £3bn costs of intensifying broadband penetration and speeds.   This will take the form of 50p per month per subscriber.  

The statement in brief:

• Enhance the digital infrastructure by aiming for universal access and using funds remaining fromm the digital switchover
• Raising a small levy on all fixed lines to ensure universal broadband coverage to the one-third of the population in danger of being ‘left behind’
• Upgrade all national radio stations to digital by 2015
• Affordability to be helped by a £300m home access scheme giving children access to the web
• Martha Lane Fox to be the Govt’s new web inclusion champion
• Legislate to curb unlawful peer-to-peer filesharing by empowering Ofcom to regulate better to enable targeted legal action by rightsholders in tandem with technical action to limit broadband access to offenders
• BBC Worldwide must be a public service partner with other media groups, like Channel 4
• Welcome Ofcom’s report and BBC’s offer of partnerships but stressed the need for sustainable funding.  From 2013, sharing the licence fee will be possible subject to consultation and alternative proposals.  Trial schemes will be running between now and 2013.
• Public services will be delivered primarily online in order to facilitate modern Government

See our Digital Britain research findings

Here is the full Digital Britain report

In the Times today the Prime Minster, Gordon Brown, writes that “a fast internet connection is now seen by most of the public as an essential service, as indispensable as electricity, gas and water.”

BT recently proposed connecting 10 million homes to fibre-optic.   Virgin Media retaliated with an offer to connect 12.5 million homes to fibre optic.   What was missed in the furore was that both companies are targeting the same homes in prosperous urban areas.   It’s far from ideal. The core issues is that many homes will still be without access to Broadband.

We are running a series of surveys on matters digital. We freely declare an interest in this; as an ISP all things digital are of understandable interest to us.

Early results from over 2,400 respondents to our survey show that the UK public rates Digital Literacy & Skills of most importance to the future success of the UK economy and are least concerned about the Elimination of P2P Piracy.

72% rate Digital Literacy & Skills as vitally or very important to the future of our economy while only 32% thought that the Elimination of P2P Piracy was vitally or very important. In fact 43% said that Elimination of P2P Piracy was hardly or not important at all.

Equal second to Literacy & Skills to respondents of our survey was Broadband in Every Home and Broadband Access for Every Child & Student in the UK. 70% thought Broadband access for all was vital or very important. Higher Broadband Speeds (50-100Mb) followed closely with 68%.

On proposals for a Digital Rights Agency, 47% said it was a good idea, 53% said it was a bad idea or didn’t care. However when asked who should fund a Digital Rights Agency, just 5% said it should be partly funded by ISPs along with Government and Rights Holders. 57% said a Digital Rights Agency should be funded by Rights Holders alone, while 24% said it was a stupid idea and no one should fund it.

Of Digital Britain’s five main recommendations, upgrading Broadband infrastucture was seen to be the most important issue for 39% of respondents.

The Tiscali Digital Lifestyles & Privacy Survey is ongoing so to add your voice to the views on Digital Britain and the wider issues such as Privacy and Social Networking you can visit www.tiscali.co.uk/members

The exponential growth of the internet has led to more opportunities for all of us.

Consider these facts and figures:

– In OECD countries, 267 million people are now broadband subscibers (OECD)
- Information, communications technologies and broadcasting account for between 6% and 8% of UK GDP (DCMS)
- These industries generate a turnover of over £52 billion a year (DCMS)
- The same industries employ 500,000 people in the UK alone (BERR & DCMS)
- By 2012, it is estimated, £1 in every £5 of new commerce in the UK will be online (BERR)
- 94% of UK businesses want higher speed broadband for business (Communications Management Association)
- By 2010 over 80% of UK businesses would want broadband speeds of 10Mbps as standard (Communications Management Association)
- The Government’s ‘Digital Britain’ review, sets a baseline of 2Mbps broadband by 2012 for every home (BERR & DCMS)

It is abundantly clear that decent broadband has economic implications for consumers and commerce. The £3billion price tag of achieving the government’s stated aims is less than the cost of bailing out a bank. Government, rightly, hopes to narrow the digital divide, while boosting British commerce and industry. Who should foot the bill? The Government proposes an ISP tax to enable its ambition and to inform and educate consumers about content copyright on behalf of the creative industries.

The acceleration of internet speeds, according to content publishers, has led to the growth in illegal file sharing. The Government wants ISPs to crack down on persistent illegal file-sharers. This, it is believed, will ensure that the creative industries can sustain revenues which are migrating towards digital delivery mechanisms rapidly. It seems the creative industries want ISPs to act as policemen in this regard.   Why?   How would this work in practice and what implications does it have for privacy?

The Government is proposing that ISPs slow the internet connections of persistent illegal file-sharers. The view of many ISPs is that such measures wont deter pirates. Pirates will just disguise their traffic or turn to other ways of sharing content. The only way to secure the creative industries is by building compelling services that consumers will pay for. Rupert Murdoch believes so. Other digital broadcasters also seem headed down that road. But the creative industries’ intransigence in engaging in a dialogue with ISPs makes this difficult.

As BT recently reported, bandwidth costs money, and files like movies and music take up a lot of that. Tiscali made just that point last year. The situation at the moment is that the ISP picks up the tab whilst content owners get away with free distribution. A possible solution put forward by ISPs is to charge content providers a bandwidth fee for delivering programmes like video and music over their broadband networks. Think about it, it makes more sense than ISPs footing the bill (and passing on the costs).

Of course Government plans will need to be managed and there will almost inevitably arise a new quango for the purpose. “We also intend to require ISPs to collect anonymised information on serious repeat infringers (derived from their notification activities), to be made available to rights-holders together with personal details on receipt of a court order,” states the interim report on Digital Britain. Nice. So ISPs will also have the privilege of paying to snoop on their customers?

As always in these discussions it’s worth pointing out that many South Koreans enjoy speeds of up to 100 Mbps. If they can, why can’t we? Well, in South Korea the Government paid for the infrastructure that enables such high Broadband speeds.

What is your view on Digital Britain and the issues it raises? Who should foot the bill for the expansion of Digital Britain and why? Should ISPs act as internet policemen where copyright infringement is concerned and why? How comfortable would you be with your ISP snooping on your every move by Government dictat?

You can find the interim report at the DCMS website