Why Carter's putting business on the back burner

The government's Digital Britain scheme focuses squarely on the consumer. Natasha Lomas asks: so what about businesses?

During a half-hour question and answer session at the launch of the government's Digital Britain blueprint this week, the penultimate question fired at Lord Carter by the assembled press pack was, did the minister really feel the plan offers enough help for businesses?

Carter's response was rather telling. That it might do more in that department was, he said, "probably one of the fairer criticisms of the report".

But he'd already prepared his counter argument: larger businesses, he said, need less help on infrastructure than individual consumers - "network resilience, pricing, access, capacity, capability questions" are, he said, "very very real for individual consumers".

That's not to say he thinks they are idle distractions for UK Plc but Carter said bigger businesses can use their size and clout as a workaround - by, say, leveraging the revenue generated by a large customer base to buy fatter pipes. (Smaller businesses do get a bit of love - the report earmarks £23m to help SMEs digitise more of their business processes.)

So in other words, when it comes to working out who needs more of a leg up in Digital Britain, Carter reckons it's probably Jack not the Giant. And that logic is fairly difficult to dispute - corporate pockets do tend to be more roomy than consumers' piggybanks. And government should concern itself with ensuring transformational change does not exclude society's margins.

But surely the kind of help you dole out depends on what you're trying to achieve - and if the goal is UK 2.0 with a flourishing 'knowledge economy' built on ranks of prosperous and innovative digital businesses all creating swathes of future-proofed jobs, then perhaps a little more help for the Giant was in order.

Various companies have been quick to criticise the Digital Britain report for overlooking businesses. Paul Lawton, MD of B2B mobile comms company Opal, gives a fairly stock response: "The report has become a missed opportunity for UK business… The focus remains on social use and the domestic user, with the report concentrating much of its content on allowing consumers access to video content.

"Consumer broadband performance is focused on downstream speed only but in the business market the need is to 'share' business information and applications, a two-way process requiring large files and data to be exchanged in both directions."

Cable &Wireless' operations director, Phil Male, is another critic - pointing out that high capacity connections can still be expensive for businesses and that Ethernet is "not widely available". Giving consumers guaranteed access to slow-lane broadband and encouraging them to watch more TV hardly looks like a "cunning plan for restimulating economic growth in the UK", he adds. Whereas encouraging more digital start-ups might be.

So where is Digital Britain's strategy to bring more seed and VC capital to the UK?

Carter has cash up his sleeve for research: £120m for the first three years for a Digital Economy Programme, which includes the funding for three (previously announced) research hubs that will probe the societal benefits and pitfalls of emerging technologies.

He also talks up the business benefits of existing R&D tax credit schemes - with more than £2.8bn of relief claimed by 2006-07, according to the report.

But when you consider the US' tech heartland, Silicon Valley, attracted $10bn of investment funding in 2007 alone, £40m per year to go on research sounds like very small beer indeed. (And while £2.8bn in tax relief has a worthy ring to it, $10bn in VC funding sounds a lot sexier.)

But back to the infrastructure question - it's not as if Carter doesn't realise business comms needs are critical to tomorrow's digital world.

"It will soon not be possible to run a business effectively unless it is equipped with high-bandwidth access to the internet," the report notes. "These are the roads of the 21st century, and alongside a public service requirement for universal access, the UK government must seek next generation access that is scalable to 1Gbps and beyond."

Nor is he blind to the fact other countries are not standing still on capacity. "Internet traffic is doubling every 21 months, and South Korea will be responding to this by rolling out 1Gbps internet in 2012-13," the report adds. "To make a similar investment cost-effective in the UK, we need to reduce the cost of deployment and to create a commercial environment in which investment results in a shorter pay-back time."

So what is the Digital Britain roadmap for getting the UK onto an ultra high bandwidth highway?

Step forward the Technology Strategy Board (TSB) - the quango that's getting £30m to investigate "Digital Britain-related innovation", a woolly jumper of a phrase which knits together a conglomeration of issues - including the next-gen infrastructure question.

Writing in its own document, Our Strategy for Digital Britain, the TSB has this to say on the topic: "To future-proof Digital Britain and enable the services that will be required 10 years from now, we not only require universal access to the network at 2Mbps, but must also plan core and access infrastructure scalable to 1Gbps to 10Gbps. Currently, there is not enough incentive to invest in this infrastructure, as the return on investment and revenue models across the end-to-end value chain are not clear."

And if you thought you just heard something go 'thud' that was probably the sound of a ball being hoofed into the long grass. Ten years from now it's a good bet South Korea's infrastructure will have gone a way beyond 1Gbps. It's rather less certain our national infrastructure will be quite so next gen by then.

What's clear is that Digital Britain's priorities lie elsewhere - making sure individual consumers can get at least a modicum of broadband wherever they live and, once this universal service has been guaranteed, encouraging them to engage with dot-gov and thus save public money on public service delivery.

By 2012, the report anticipates there will be enough 'Jacks' getting familiar with that there internet thing that it will be possible to start a programme of digital switchover for public service delivery. And persuading the majority to go online to get public service information rather than tying up expensive human bodies in expensive government offices means big potential savings.

Let's not forget tomorrow's government will be weighed down with a serious debt burden - those billions spent propping up the banking system and 'quantitatively easing' the economy. Seen in that light, anything that shrinks public expenditure is likely to be priority one in the coming years.

So what's left for businesses from the Digital Britain report? Indirect benefits - and their own ingenuity.

At the press Q&A, Carter pointed out that the development of next generation mobile capability and next generation fixed networks would be an "obvious benefit" to the business community.

Plentiful, ubiquitous superfast broadband should offer myriad opportunities for new business opportunities and/or revenue streams in all sorts of industries. So Digital Britain's message to UK Plc amounts to this: get innovating, your country needs you.