Comment Articles

Excuses, excuses!

Guy Kewney AnchorDesk

Published: 15 Mar 2000 16:59 GMT

Tony Blair has now gone on the record as wanting to give everybody in the UK access to the Internet "by the year 2005." It's a nice headline, but does it really deal with the problems we're facing?

Far more to the point, I would suggest, are the announcements from NTL and Alta Vista, bringing the price of online access down. Both announcements are, almost certainly, a preparation for the shakeup that the Internet market will get into when BT's SurfTime is launched in April (or May, or June) whenever BT can manage to hire competent staff.

The problem is really very simple indeed. Once you have a flat rate payment method for the Internet, you can stay connected as long as you like. And that means you can send and receive data. And there isn't a voice call in the UK today which is not digitised; that is, it is sending and receiving data.

So if and when Internet access is universal, products like CallServe and Net2Phone can replace the telephone handset; and bang goes most of BT's call revenue. And by the same token, once ADSL is universal, bang goes an awful lot of BT's Switchstream data revenue.

So, if the Government's Internet plans amounted to anything more than hot air, BT's shares would dive. Instead, it was Internet stocks which took fright; people like FreeServe. That's not wrong; on the face of it, when SurfTime starts up, FreeServe will have no call revenue to share with BT. So it makes sense -- if you imagine that somehow, BT will be safe from the changes in the market.

And of course, everybody who watches the market knows damn well that BT will indeed be safe.

It will release ADSL services -- through companies like FreeServe -- and attempt to restrict its usefulness to businesses, and it will try to hobble the service technically so that it isn't easy to set up a rival to its voice call network. Where technical dodges fail -- and they will! -- it will resort to lobbying, claiming that it is strategically vital to the security of the nation, and needs to be protected.

When that happens, the Government will respond sympathetically, and will drag its feet on Internet improvements.