There is a Message Here America

Britain that glimmering island that in many ways is the birthplace of both man’s political aspirations and freedom from want is also in many cases the test case for mobile digital. Britain is somewhere around 3-5 years ahead of the US. Not in technology, but in how to deploy, market it and have politicians screw it all up. –

But wait a minute - why would this be? Are telecoms companies salting away billions of pounds of profits in a great offshore lair, somewhere? Or are they merely reflecting the market’s demand for data? Plain vanilla 2G is enough to make a phone call, and that’s everywhere.

If the telcos are hiding anything, it’s the level of their debt. They’re broke, and running on empty (hence the nonstop rounds of refinancing), which explains their renewed focus on mature markets where they can squeeze higher revenues by diminishing competition. The UK is reckoned to be a full 10 per cent less profitable than other European countries, because retailers such as Carphone Warehouse are in the chain, and because of all this pesky competition. It’s true that the 3G auctions didn’t help, either, sucking £20bn into Brown’s piggy bank, and onto quangos like, well… Ofcom.

Which is in a sense reflected in the current apathy of the FCC, irrespective of pending ‘investigations’. But there is more —

What we now know, thanks to the 3G map, is just how expensive building out a broadband infrastructure will really be. What it shows us is that the definition of “rural” is much broader than we supposed. An analysis conducted for the Broadband Stakeholder Group last year put the cost of rolling out fibre to every home at almost £30 billion.

During the media orgy of coverage around Carter’s Digital Britain report two weeks ago, I only heard one journalist ask the obvious question: why tax all of us for something that 70 per cent of people don’t want. That was Jeremy Paxman on the BBC’s Newsnight, apparently waking up from a deep slumber.

But it was a lone voice, and I didn’t hear anyone - not a single one - go any deeper and follow this to its logical consequence. Which is that maybe people aren’t stupid, as the political and media classes suppose, and many find what’s on offer from the internet somewhat wanting. Maybe it’s not offering compelling services.

The US is ramping for a similar head long rush to round one of a universal service offering with $4Bn in taxes to be doled out. Its a known fact that even if available some 30% will just refused to sign up as broadband is NOT critical to their everyday life. What’s worse is that I have yet to hear any voice other than ourselves pose the question — “why tax all of us for something that 70 per cent of people don’t want?” Why indeed?

What Britain is experiencing is like a canary in a coal mine for the US. We face similar questions and much larger expanse of ‘white space’ in the 3G map than they. For the US it is more problematic. We have 10x their real estate and a carrier base loathe to leave the urban centers as they know that is where the profits are.

Chirp!

Read the whole article here.