Telecoms is a British success story. In the early 1980s we were way behind the USA, with an old fashioned system with too little capacity, run by a nationalised monopoly. It charged too much and delivered too little, like most monopolies. Working in the City of London I could not get a phone line that would take data from the Stock exchange to my office, a journey of less than a quarter of a mile, without data degradation when it rained, for water got into the cables according to the engineers. At home in Oxfordshire, living a couple of miles from the centre of Oxford, it took months to be supplied a phone as the monopolist couldnâ€™t be bothered to put the cable in to my house.
It was this kind of nonsense that persuaded me to argue the case for a deregulated competitive telephone system capable of offering a competitive challenge to the Americans. The first round saw the sale of BT and the licensing of a single business competitor, cable and Wireless. The second round saw massive new investment in mobile networks, and the third more competition across the board. Over a ten year period we narrowed and removed the gap between UK and US telephony, and created a telephone infrastructure that could support the flowering of financial and business services in the City of London. If we had stuck with the monopoly and all those tedious debates about capital and investment rationing in the public sector London would not have sustained so much successful business.
Today we can still take some pleasure from the huge expansion of mobile telephony, the relatively rapid take up of the internet and the expansion of transmission capacity for data and pictures. We should not, however, be complacent. BT still has a strong market position in the last mile of cable into peopleâ€™s homes, and at the local exchange. These still restrict line speeds and capacity in some cases. Meanwhile BT is excluded from mobile telephony and feels hard done by on some of the regulation it still faces.
The government and regulator need to consult further on how they could allow or encourage more rapid investment in more capacity into homes and businesses, as the demands for more data, film and picture transmission at higher speeds are growing daily. The internet is the new highway of world trade, the new digital railway network for commerce and communication. Britain has done well, but could do better. The public sector could improve its use of internet technology, websites and web communication. The providers need to work harder to ensure the UK is wired for success.