Who would have thought it? We are actually good at something. A recent survey suggested that Britain is the second most wired country in the world, trail- ing only the super-connected Danes and trumping, most importantly, the US. Add to this a study last year indicating that the government very nearly met its target to make Britain the best place in the world to do e-commerce, and our natural pessimism over our technological development begins to look like false modesty. Even more surprising is the claim that broadband - or fast, always-on internet access - is a big part of this success. Although other countries have more users, the density and competitiveness of our broadband market has helped push the UK into second place.
For those who follow "Broadband Britain", this is indeed shocking news. We have accused ourselves of being a broadband basket-case, with low take-up, slow connections, an uncompetitive marketplace and few public services that take advantage of faster connections. So what has changed? Is there cause for optimism? And what exactly is all the fuss about what the Prime Minister has called "the transforming technology of our age"?
To understand the impact broadband can have, you need to see it in action. Tony Blair would approve of one particular family from Sidcup. They are not e-literate geeks, but they are none the less model Broadband Britons. Two years ago, they decided to put a broadband connection into their four-bedroom semi, and liked what they found. The father, a teacher at a local school, uses the net to prepare his lessons; his wife uses it to organise local charity events. Their son regularly logs on to lust over cars, while their daughter decided to use it to trace their family tree: "We have always been interested in it, but before we had broadband it took so long."
Each member of the family uses broadband in ways that make sense to them. They think their lives are much better for having it, and wouldn't want to go back. They are the type of family the government wants to see up and down the country. Politicians have been promoting this vision for longer than you might think. The Labour Party's 1983 manifesto, known more for suicidal inclination than technological vision, promised that "a publicly owned British Telecommunications would be given the sole responsibility to create a national broadband network which integrates telecommunications and broadcasting". In the mid-1980s, a newly privatised British Telecom (BT) offered to do exactly that, only to be turned down by the Conservative government.
A decade and a half later, little had changed. Labour's manifesto in 2001 still promised that the government would be working "to ensure that broadband, which allows fast internet access, is accessible in all parts of the country". And there were precious few broadband users. At the turn of the millennium, having been accused of dragging its feet, BT had launched a broadband service for ordinary consumers. Within a few weeks, thousands had declared an interest, journalists had written numerous articles predicting sweeping changes to the way ordinary Britons lived and worked, and the head of BT Openworld, Ben Andradi, had declared that "the advent of broadband . . . is creating a second internet wave". Yet just over a year later, in the autumn of 2001, this optimism looked premature. Britain was in a fierce scrap with Estonia and the Czech Republic for 21st place in the world broadband rankings. Only around 200,000 people had signed up, putting the UK significantly behind most comparable European countries and trailing way behind the world-beating South Koreans.
The government, reacting to growing unease in the industry and media, called a crisis summit. The outcome was a new target for Britain to have the "most competitive and extensive" broadband market in the G7 by 2005, and a new industry body (the Broadband Stakeholder Group) to try and get Britain's house in order. A number of futuristic technologies - for example, 3G phones - have been stillborn without raising alarm. But broadband is different. In theory, it can make businesses more competitive and nations more productive, and give citizens better access to public services. The speed of broadband can dramatically improve people's experience of the internet: it "enables" activities (such as e-commerce) and applications (such as downloading music or videoconferencing) that work clumsily on a dial-up connection. Most importantly, it turns the internet into an always-on, multipurpose tool for families and businesses.
In homes, schools, surgeries, workplaces and the wider economy, broadband has become a measure of a nation's success in the 21st century. At a government-sponsored "e-summit" in 2002, Blair laid out why lagging is unacceptable. He hopes that the UK "has the potential to become a great technological powerhouse, matching the great achievements of the 19th-century industrial revolution with a 21st-century information revolution". (He also enthused about the web's ability to create open government, noting the "one million people from all over the world who accessed the government's dossier on Iraq within hours of its release on the No 10 website".) To get Britain moving faster, he pledged to provide broadband for every school, doctor's surgery and hospital, and promoted a number of measures to make sure that no region of the country was left unconnected.
If the recent survey is any guide, it seems to be working. So what exactly has changed? First, availability has improved dramatically. For most people in Britain, broadband is available either from cable companies or through a technology called ADSL, which involves upgrading traditional BT phone exchanges. The problem at the outset was that lots of people didn't live in cable areas, and most of Britain's 6,000-odd exchanges weren't enabled. This left millions of people without access.
In July 2002, BT, accused by its rivals of stifling competition and harangued by consumers in areas with no connection, established a system of demand "triggers". When enough people said they would sign up, the company would wire up the area. This policy was not without difficulty, and more recently BT announced that it had decided to wire up the lot instead. By the middle of next year, unless you live in a very remote area, the chances are you'll be able to get broadband if you want it.
The second major change is that the price has come down. When broadband launched, it cost more than £40 a month to get connected. But prices have gradually fallen to the point where most companies will now offer connection for £20 a month or less, while some also offer even cheaper (but not quite as fast) versions. At present, there is even something of a "broadband boom", with companies competing with each other to offer cheaper prices.
Third, more people have taken it up. Today, around three million people have broadband, and some analysts suggest that the number will keep growing strongly to reach 14.5 million in 2010. Britain is forecast shortly to overtake France to become the second biggest market in the EU, and most commentators expect the government to meet its target of having the most competitive and extensive market in the G7 by 2005.
So things are looking up? Yes, but there is a long way to go. The early years of broadband have been dominated by problems on the supply side of the market - availability, cost, a ropey service - most of which have been solved. Now the industry must turn its attention to the demand side. While three million users have converted to broadband, there are tens of millions who still can't see the point. And for every family who log on and find broadband useful, there are others who pay for the product and don't change their habits much at all. Convincing those without broadband that it's worth the bother, and persuading those who have it to use it more, will remain a significant problem for government and industry.
Some tricky but familiar issues also remain on the supply side of the market. The super-regulator Ofcom is carrying out a major review of the British telecommunications market and will have to grapple with two long-running problems: how to "unbundle the local loop" and what to do about BT's monopoly position. The first of these deals with the problem that BT still has a near-total monopoly on the "last mile" of infrastructure between local telephone exchanges and homes. The former telecoms regulator David Edmonds tried to get other companies to put lines into BT exchanges. After four years, he admitted that "unbundling has been a painful and often miserable process". It was also a total failure. Now Ofcom, noting a recovery in the telecoms market, seems bullish about trying to get BT to lower its prices and open up this part of the market.
The second, much more difficult question is what to do about BT itself. Advocates of breaking the company up have long suggested the creation of a Railtrack for telecoms infrastructure, with the bit of BT that controls the pipes being separated from the bit that sells the connection. Most analysts seem to think that splitting BT in two would be a complicated and traumatic process: too much pain for too little gain. But the option remains on the table, and the industry will await the conclusions of the regulator's review with great interest.
As if this weren't enough, a cluster of fuzzier issues also needs to be tackled. As more people take up broadband, there will be debate about how it should be priced. Advocates claim broadband should be seen as a utility, no different from water or electricity. At the moment, anyone who signs up pays a flat fee per month, but other utilities cost more the more you use them. This puts broadband providers in a difficult position. If their customers use their connections more, they could find themselves with an unsustainable pricing model.
Even if the current pricing system works, providers have yet to work out exactly how much bandwidth consumers are likely to need, and by when. More pessimistic commentators mutter that other countries already offer connections five or ten times faster than the best available in Britain. ADSL, the current dominant technology for access, only goes so fast: industry experts are already asking what comes next.
So how fast is fast enough? What will people really use their connections for? And what happens to the rest of society as the most connected speed off into the future? We don't yet know the answers. And even if Britain's position has improved compared to other countries, techno-Eeyores shouldn't stop their hand-wringing just yet. Broadband changes quickly. We are at the end of the beginning of the journey, and there will be plenty more to worry about on the way.
James Crabtree is an associate of the Institute for Public Policy Research's digital society programme (www.ippr.org)
