Thursday, June 10, 2010

The UK: The West Ham of broadband

If you work in the broadband or video games industries in the UK and want to know where government policy is heading over the next five years there are two men you need to know - Jeremy Hunt and Ed Vaizey.

Jeremy HuntThe culture secretary and his digital minister - at least I think that's what we call Mr Vaizey, were at a trendy London new media club yesterday to give a first glimpse of their policies.

We did not learn much that was new to anyone who had read the Conservatives' technology manifesto before the election. But there was one very bold pledge on broadband and some rather dispiriting news about tax relief for the games industry, promised by the last government.

Jeremy Hunt repeated the mantra about broadband that we've heard from just about every leading politician in recent years - that a superfast network is vital to our competitiveness and that we must be watchful in building such a network that we do not let a new digital divide emerge.

He made it clear that he thinks the market will do the job, with a little prodding from regulators to free up existing infrastructure and perhaps some cash from the BBC licence fee. But he did announce that he would trial this theory with three rural broadband market testing projects.

The jaw-dropping line in Mr Hunt's speech, however, was his pledge that Britain would have "the best superfast broadband network in Europe" by the end of this Parliament.

That means by 2015, with the spending of a maximum of £300m of public money, the UK will have soared to the top of the European broadband league.

I had a look at a recent study of global broadband performance by Cisco and Oxford's Said Business School to see how far we need to go to achieve this goal.

It puts the UK in 17th place in Europe, far behind the likes of Sweden and Switzerland, with even Slovenia and Latvia ahead in the table. So to use a football metaphor, Mr Hunt is in the position of the manager of West Ham, promising to win the Premier League within five years, without a big budget for new players. Even Hammers fans may see that as a little optimistic.

On tax relief for the games industry Jeremy Hunt and Ed Vaizey had warm words but then made it pretty clear that it would not be arriving in a hurry.

There was talk of the need for approval from Brussels, which could take up to two years, and more importantly of the battle to get the plan past the Treasury.

ELSPA, which lobbies on behalf of the UK games industry, put out a desperately cheerful statement welcoming the fact that Mr Hunt had not ruled out support, and hoping for help in the emergency budget on 22 June.

But the Chancellor George Osborne could have other priorities than helping out the makers of Grand Theft Auto and the like. Just like West Ham fans, the games industry bosses may need to be patient over the coming years.


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