by Alistair Maughan

Digital Economy Act – UK needs more outward-facing digital policy to compete in global market

Aug 18, 2016
IT Leadership

The first column I wrote for CIO UK, back in 2010, was on the Digital Economy Act 2010. Fast forward six years and here we are again – with a new Digital Economy Bill, intended to lead to a new Digital Economy Act. Although I’m tempted to re-use the same headline (“landmark or lame duck?”), the timing of the latest bill – announced in the Queen’s speech in May 2016 but published post-Brexit vote – leads to more fundamental questions about whether the UK will need more than a piecemeal Act of Parliament if it’s to maintain whatever position it currently enjoys in the global digital economy.

Much has changed since the 2010 Act. Technologies that seemed advanced then – such as cloud computing – now comprise mature markets, and have been replaced by Big Data, robotic process automation, the Internet of Things and blockchain/distributed ledger technology as industry favourites. Also, the EU has both announced and pushed forward its Digital Single Market initiative.  And, of course, the UK has voted in favour of Brexit.

The UK government clearly believes that the UK sits at the top table in terms of the global digital economy. But how does the country retain its position? And, if and when Brexit happens, how will the UK seek to replicate the advantages of being within the world’s largest free trade grouping in terms of the flow of digital goods and services?

In the light of the Brexit referendum decision and the EU’s announcement of a slew of digital single market measures – both in June 2016 – the Bill risks being seen, at best, as merely a stop-gap series of piecemeal measures and, at worst, as an irrelevance. Not that the Bill’s measures are unwelcome, of course – merely that, without a lot more government support and legislative initiative, the Bill is not going to close the gaps that risk opening up when Brexit takes the UK outside the EU digital single market.

Content-wise, the Bill’s primary focus is infrastructural – especially targeting internet and broadband connectivity. It includes a range of measures designed to:

  • Take the initial steps towards requiring ISPs to comply with any request from a UK citizen to provide broadband services at a speed of at least 10Mbps (the so-called Universal Service Obligation), or pay out compensation. The target 10Mbps threshold doesn’t seem particularly onerous, given that the current average broadband speed is 18.6Mbps and the UK Government’s definition of superfast broadband is 24Mbps. However, the Universal Service Obligation will be reviewed over time and the 10Mbps figure will rise as and when Ofcom deems higher speeds appropriate, to ensure that the broadband coverage remains “sufficient for modern life”;
  • Implement a new Electronic Communications Code that provides rights for communications providers to install and maintain equipment on land. The changes ought to reduce the cost of infrastructure roll-out, incentivise investment and improve connectivity;
  • Amend the Communications Act 2003 to add a power for Ofcom to specify requirements in relation to arrangements for end-users to switch ISP;
  • Protect children from pornography and harmful online content by introducing age verification measures for adult content – effectively prohibiting pornographic material from being made available on the internet unless it is made available in a way not normally accessible by under 18s;
  • Amend Ofcom’s regulatory responsibilities;
  • Improve the delivery of public services, including a new “Data Sharing Code of Practice”;
  • Strengthen the Information Commissioner’s enforcement powers and to protect individuals’ rights, including via a new “Direct Marketing Code of Practice” which will provide protection for individuals from spam email and nuisance calls.

It’s hard not to conclude that the Digital Economy Bill is inward-looking and relatively infrastructure-focused.

The UK government may argue that a solid, reliable internet backbone is an essential element of a world-leading digital economy. And, while that may be true, the inevitable next step must be to move quickly on to more outward-facing digital policy issues designed to help the UK compete effectively in the global digital economy.

The UK government will need to work out how to stem any loss of competitiveness when Brexit takes the UK outside the EU Digital Single Market and, perhaps more interestingly, what options Brexit presents the UK government to create a welcoming home for digital businesses freed from some of the regulatory constraints that the EU Digital Single Market may involve.