Monthly Reports

PRIME MINISTER

Report from the e-Minister and acting e-Envoy - 14 January 2000

Modern markets : getting the market framework right

Telecommunications

1. Telecommunications are the infrastructure of the knowledge economy. Getting the market framework for telecommunications right is therefore a top priority.

2. We are getting the cost of Internet access down by encouraging competition and choice for consumers. BT has recently announced a set of new price packages, planned for launch in the Spring, that will offer businesses and individual consumers a greater choice of Internet tariffs – including both cheaper pay-as-you-go tariffs and un-metered tariffs. Other providers are already offering similar or better deals and OFTEL is working with the industry to ensure that there is fair competition. OFTEL has also announced a new charging system for pay-as-you-go Internet tariffs to encourage competition and bring cheaper Internet tariffs.. Throughout this, our aim has been to maximise choice as well as to minimise charges: we want a range of tariff options available which suit both heavy and light users of the Internet.

3. Growing competition - and the exploding capacity of telecomms networks - will continue to drive prices down. We have already seen this happen for conventional telephone services and expect it to happen in the new higher bandwidth markets as well. BT has announced its plans to roll-out ADSL (the technology that allows high-speed broad-band services on copper wires) across its network this year. OFTEL has set rules so that competing operators will have fair access. OFTEL has also set a deadline of July 2001 for local loop ‘unbundling’ - so that competing telecomms companies will be able to do their own higher bandwidth upgrade of BT’s local network. OFTEL has also announced an investigation into the price of leased lines, which are an important component of network access for companies and of infrastructure for other operators. Carrier pre-selection will give another push to falling prices (enabling you to take greater advantage of cheaper phone companies by nominating a company to handle all your calls, without having to dial a special prefix). We will continue to promote further competition to get the price of high bandwidth services down, for example through licensing new broadband radio services later this year.

4. In December, DTI published the Notice for the auction for third generation mobile radio spectrum. Thirteen groups including 9 potential new entrants to the UK market – have applied to take part in the auction. 3G will enable access to the Internet and other data services on the move.. Along with digital TV, this will transform the digital divide - opening up multi-media to millions of people who may never have a PC in their home. The UK is a leader in Europe – and some two years ahead of the USA in both mobile telephony and digital TV

.5. It is increasingly clear that radio spectrum is one of the most valuable pieces of raw material in the new economy. Britain is good at spectrum management and we have real strength in wireless technologies and applications. DTI’s Radiocommunications Agency is consulting on broad-band wireless uses - which, for instance, would enable everyone in a hospital or school to be connected to each other, to their databases and the Internet, via mobile devices. It will also enable ‘things that think’ to become ‘things that communicate’ - the fridge that reads the barcode on the milk and orders some more; the car that books its own service, and so on. We are trying to speed up release of spectrum for broadband services this year - although the very big wins will come with the switch-over from analogue to digital broadcasting.

6. Stephen Byers and Chris Smith recently wrote to you, and to colleagues, proposing a way forward on modernising broadcasting and telecommunications legislation to reflect the convergence of the two markets and technologies. It is vital that we get this framework right to ensure that change in the industry is not held back by outdated regulation while also ensuring regulatory tools remain available to promote consumer interests and other important public policy objectives.The legal and regulatory framework

7. In modernising markets, we also have to get the legal framework right and to ensure the building of trust in e-commerce for business and consumers supported by effective enforcement. Here too we are making good progress.

8. The Electronic Communications Bill finished its Commons Committee stage in December:

We have been working with the Alliance for Electronic Business to create a self-regulatory system of approved ‘trust service providers’, whose services will guarantee the authenticity and integrity of electronic communications. This is essential if we are to build confidence amongst business and consumers. I am glad to say that the prospectus suggests that it will meet our business and law enforcement objectives. If this progress continues, we will have no need to use our statutory default powers and will therefore keep Part 1 of the Bill in reserve in case self-regulation proves inadequate. We have announced a full review of self-regulation in 2004 so that we can make a decision on whether or not to use the statutory option before the sunset clause expires.

The Bill will allow electronic signatures to be admissible in evidence - a move that will be particularly welcome to business. And it will allow Ministers, by statutory instrument, to modernise the statute book, creating electronic alternatives to paper-based requirements. Ian McCartney is co-ordinating the work of Government departments who are already looking at the statutes for which they are responsible. (For instance, the Lord Chancellor’s Department will use the Bill to provide for electronic conveyancing. DTI have published a draft order in January to allow companies to communicate electronically with shareholders.) I have just written to colleagues to bring forward proposals for action as soon as the Bill is brought into force.

9. Co-operation between Government and industry to ensure a safe and secure environment for e-commerce is being taken forward by the DTI and the Home Office in the Government-Industry Forum on Encryption and Law Enforcement. We are working with industry representatives studying market developments and will jointly make proposals to the Second Forum, bringing together senior representatives of major e-commerce companies and law enforcement, in May 2000.

10. The Regulation of Investigatory Powers Bill to be published shortly by the Home Office will update the law on the interception of communications; regulate the use of other intrusive investigative techniques by public authorities and provide for lawful access to the means necessary to make encrypted data intelligible. The new decryption powers will target the criminal – not the legitimate user of new technologies.

11. Self-regulation and codes of conduct can make an important contribution to consumer confidence in on-line traders - giving consumers assurance that payments are secure, that goods will arrive and that if things go wrong they will be quickly corrected. We announced the setting up of private sector-led Trust UK in the Consumer White Paper, to accredit e-commerce codes such as the Consumers' Association's Which? Web Trader scheme. We also announced in July plans to improve consumer information and advice and DTI launched its Consumer Gateway website.

12. The UK cannot go it alone. We need international agreement on the legal framwork for e-commerce. Within Europe we have made significant progress towards a single electronic market:

We recently concluded the Electronic Signatures Directive. In December we reached political agreement in the Council of Ministers on the Electronic Commerce Directive – crucially, based on the principle of the trader’s country of origin. We are working to improve consumer redress through better out of court dispute resolution for cross border cases in the single market, close co-operation between enforcement authorities and addressing disparities in Member States' consumer laws where they impede e-commerce.We are now working closely with other member states and with the Commission to develop an Information Society Initiative that will form an important part of the Lisbon Summit agenda.

13. More widely, we continue to press for a transparent and liberal e-commerce framework in multi-lateral fora such as the World Trade Organisation, World Intellectual Property Organisation and OECD - for example, we played a major part in developing the OECD Guidelines for Consumer Protection in E-Commerce which were agreed on target last month. We are also pursuing bilateral contacts – most recently, concluding Memoranda of Understanding on E-commerce with Hong Kong and Singapore.

b) Confident people : building skills and access

14. DfEE and DCMS are rolling out a number of initiatives designed to spread access, raise skills and tackle the emerging ‘digital divide’. Building individuals’ skills15. The National Grid for Learning is a programme of over £1bn designed to equip schools and colleges with ICT infrastructure and connectivity to ensure that every child leaves school with competence in ICT and that ICT is integrated with the standards agenda. Over 93% of secondary schools and 62% of primary schools are now connected.

16. City Learning Centres (under the Excellence in Cities initiative), will be located mainly in the deprived inner city schools and will provide state of the art ICT facilities for use by pupils and teachers in those schools as well as in other schools in the area and will also provide a resource for community use for family learning.

17. ICT Learning Centres will be based in a variety of locations (including community centres, libraries and mobile facilities) to serve people living or working in England's most deprived communities (with the focus on the 2000 most deprived wards as defined by the DETR index).

18. UFI Ltd is developing innovative, ICT-based learning materials and on-line support which will be accessible at home, in the workplace and in consortia of centres contracting with UFI Ltd. SMEs will be a high priority target for UFI.

19. Learndirect is a telephone helpline providing free, impartial , comprehensive information and advice to adults on learning and careers. It is managed on behalf of the DfEE by UFI Ltd. From April 2000, it will provide an on-line service which will be linked to the Learning and Work Bank due to be launched by the end of 2000.

20. The IT for All programme, co-ordinated by DTI, now has 3000 centres where people can go to receive an initial experience of new technology. Many of these are public libraries that have been wired up under DCMS's programme for 21st century libraries.

Connecting SMEs

22. Our network of 100 Information Society Initiative local support centres is almost complete. Part of the Business Links network, the centres provide plain-English advice on ICT to small businesses. Direct mailing is being used to stimulate SMEs to use the service and help achieve our target of getting small and micro businesses to world-class standard.

23. In March, we will launch Technology Means Business. Developed with BT, Intel, Microsoft and Compaq, it will ensure that every small business advisor in the UK (not just Business Links but in the banks, accountancy firms, the IT suppliers etc.) is able to deliver effective e-commerce advice to SMEs to an accredited standard.

24. In April, we will launch the Small Business Service's Internet portal for SMEs. This will provide a single gateway to Business Links and other public and private sector services for SMEs, with more on-line services and links being developed over time. It will also include a new e-Commerce Resource Centre. Communications and marketing

25. We also need to ensure that this wide range of programmes is effectively communicated. DfEE, DTI and Cabinet Office are collaborating on a programme of quantitative and qualitative research to inform the way we communicate and market Government policies and programmes in the Information Age area. This will:

• give us a clear understanding of the attitudes and behaviours in relation to the Information Age of our key target audiences (in the general public, in business, and with opinion formers)
• test how those attitudes and behaviours can best be influenced
• allow us to develop a positioning strategy and branding structure for all the programme strands within the Government's Information Age programme, including an overall positioning, language and branding for the cross-Government programme as a whole.

c) Leading edge government : exploiting ICT to transform public services Cross-departmental issues

26. All government departments are now participating in the Government Secure Intranet save three which are in the process of connecting to it. This provides the essential infrastructure for communication between Ministers and officials across departmental boundaries.

27. In March, Ian McCartney will publish a corporate IT strategy for government. Its focus is on developing the platform we need for e-business in Government. It implements a key Modernising Government commitment and set out a vision of how we expect the business of Government to be transformed by new technology in the next decade. The strategy will consider the roles to be played by the centre and by departments in promoting change. The strategy will set common policies on interoperability, data sharing, authentication and security whilst establishing common approaches to the use of specific technologies including the Internet, digital TV and smart cards. Framework policies and guidelines have now been published on call centres, websites, smart cards, authentication and digital TV.

28. Under Ian’s leadership, the Cabinet Office’s study of government IT procurement is under way, designed so that lessons can be learnt quickly and applied to new IT projects even before the study is complete. The team is also working to ensure that other initiatives incorporate the study’s emerging findings - including the Office of Government Commerce, the future management of PFI and the current round of bids for the Invest to Save Budget.

On-line government

29. You recently launched NHSdirect on-line. With over 1 million hits on its first day, it demonstrates how successful the public sector can be – with the right brand and content. British Trade International – a joint venture of DTI and FCO – is making powerful use of the internet to spread export support for British business. The Inland Revenue is proposing to launch on-line tax filing in April. DfEE will be launching Learndirect as a web-based service in April.

30. More and more services such as these will be moving onto the Internet over the next year. The Cabinet Office has recently requested tenders for a new government portal – me.gov.uk – which will be launched in the summer to give personalised, one-stop access to such services. We will need to challenge and inspire all government departments and agencies to make their own on-line services available to citizens through this single portal. We are setting up a new media team, reporting to Alex Allan, to drive up standards of government websites. In addition, you have asked the Performance and Innovation Unit to develop a strategy for the electronic delivery of Government services. The project will identify what services consumers will want delivered electronically and make recommendations about how best to deliver those services in terms of technology and organisation.

31. A new method will be put in place to measure departments’ progress against targets for on-line delivery of government services. In this new approach departments will report on as full as possible range of services rather than on the numbers of transactions in a sample and we will measure progress towards getting 100% of types of services available online, via the internet, EDI or via a call centre. 32. Finally, the Cabinet Office and Treasury have agreed that an independent study should be made of the general level of expenditure that will be needed across the whole of government, the best means of co-ordinating expenditure and the partnership models which are most likely to produce effective results. The study will be carried out by PA consulting on behalf of the Cabinet Office. An interim report in February will support treasury expenditure teams in discussing departmental proposals and the final report in April will inform the outcome of the spending review.

Exploiting Government’s knowledge assets

33. There is a growing conviction that digital content production will fuel the knowledge driven economy. Gordon Brown has stressed the need to ensure effective exploitation of the public sector’s intellectual assets, as well as its physical assets.

34. The White Paper on the Future Management of Crown Copyright, published in March 1999, announced the setting up of the Government’s Information Assets Register providing an electronic gateway to government material. A pilot scheme covering four departments goes live in February.

35. HMSO has established a User Group and two specialist sub-groups to consider how take forward the PIU’s proposals on class licensing, and also to look at a proposed fair trading charter for Government information. The new Digital Content Forum, along with other information industry groups, are working closely with HMSO and DTI on these initiatives.

36. The Information Age Partnership at its last meeting established a sub-group to develop proposals on how government could enable the private sector to exploit government’s knowledge assets to create new products and services.

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