Agenda for Action in the UK:  Continued



5.1 As an Information Society, the UK has a lot going for it. It has a liberalised telecommunications regime, substantial network investment, very strong telecommunications and broadcasting companies, a healthy publishing industry and established library and information networks. Like the US, it also has a head start in that English is recognised as the common language of the Internet and is increasingly becoming the common language of global communications. Given all these advantages--and more besides--the UK should be a world leader of the Information Society.

5.2 What is needed now is a concerted effort to pull together all the current UK initiatives, many of which are excellent, into a coherent whole. Although the United Kingdom currently enjoys several competitive advantages in the communications sectors, as is always true of competitive advantages, we must use them or lose them. There is at present a window of opportunity which offers a chance for the United Kingdom, led by its Government, to exploit the potential of the Information Society to the full. The Committee's enquiry focused on the barriers to the development of a National Information Infrastructure (NII) in the United Kingdom, with a view to making a series of recommendations on the steps needed to establish the UK NII. Although it was not initially the Committee's intention to review the current regulatory regime in the UK, a substantial number of witnesses identified problems with this regime as a major barrier to the development of Information Superhighways. One major concern is that the relentless trend towards convergence of the telecommunications and broadcasting industries has not yet led to a convergence in the multiplicity of regulatory bodies operating in this field. Our recommendations for change in the current regulatory regime are given in paragraphs 5.18-5.48 below.

The UK Information Society Task Force

5.3 Most other countries which are aspiring to build their own National Information Infrastructures have the following features in common:

5.4 Several countries, including the US, have set up high-level NII task forces and advisory councils to identify and articulate the critical issues to be addressed in the development and application of information and telecommunications technologies for the benefit of industry and of society as a whole. The national task forces typically bring together ministers and senior government officials with representatives of the private sector. They act as a focal point for action across government and nation-wide, and their activities are publicised, not least on the Internet itself. We were particularly impressed by the work of the US Advisory Council on the National Information Infrastructure in advising the Secretary of Commerce on a national strategy for promoting the development of a NII. The 36 members of the Council were drawn "from among America's most accomplished individuals in telecommunications, electronics and computer software and hardware, entertainment, broadcasting, labor, as well as educators, public leaders at the State and local levels, and leaders of the disabled and other interested communities."[1] The Advisory Council's publications convey a sense of co-operation between the private and public sector, as well as the impression that the Council had identified not only aspirations for the US NII, but how they might be achieved. The benefits of the Information Superhighways policy of the US administration raise the possibility that if the UK Government adopted a similar approach by appointing its own high profile advisory body, it could assist in the creation of the Information Society in the UK, as well as helping UK plc to recognise the full potential of its world class telecommunications and broadcasting industries.

5.5 In the UK, as in the US, the private sector is heavily engaged in building the Information Superhighway infrastructure. But unlike the US Government, the British Government has not had the benefit of a high profile national task force involving the private sector to help create the Information Society in the UK. There has been a plethora of announcements of Government initiatives: those highlighted by the Lord Privy Seal include the creation of the Central Information Technology Unit (CITU), the DTI's Information Society Initiative, the DTI's Multimedia Industry Advisory Group, the DfEE's Education Superhighways Initiative, the Technology Foresight Programme and the creation of the "rather catchily entitled" Cabinet Committee, GEN 37 (QQ 1054, 1064).[2] The Committee warmly supports all these initiatives. We were also impressed by the considerable achievements of the Minister for Science and Technology in driving forward the use of IT both within his own Department and more widely, and by the sense of drive, leadership and enthusiasm which the Lord Privy Seal conveyed in discussing his own new role as Chairman of the Cabinet Committee. We view the Prime Minister's creation of the GEN 37 Committee as a positive step, and were encouraged that it was discussing such issues as the Prime Minister's vision of a computer project for the Millennium, and the concept of "IT For All". But despite the Lord Privy Seal's exceptionally frank and helpful evidence, the tradition of secrecy which still to a certain extent surrounds Cabinet Committees is likely to ensure that little is known about GEN 37's work. Indeed, few people seem to know of its existence. It is a far cry from an American-style Task Force.

5.6 We consider that the results of GEN 37's work should be given a higher profile, as should the role of its Chairman. A national champion of the Information Society--a UK Al Gore--could speed its development, although Cabinet-wide commitment is needed to give the development of the Information Society the priority it deserves in the UK. We recommend that GEN 37 should produce and publish regular policy reports, following the example set by the Cabinet Committee on Competitiveness.

5.7 Moreover, despite the creation of CITU and GEN 37, the inter-departmental and inter-agency co-ordination needed to drive forward a nationwide initiative is still lacking. The Committee's enquiry brought acutely into focus the absence of a channel for sharing information about the Government's current policy between departments and agencies, let alone adequate co-ordination. As a result there is a sense of a great deal of world-leading development taking place in the United Kingdom, accompanied by a serious risk of opportunities being missed and the wheel of technological innovation being re-invented in hundreds of disparate pilot projects which are currently being tested up and down the country. As a nation we have failed to identify our aims and objectives for becoming an Information Society. Unlike other countries who are leading the way in developing the Information Superhighways, we have no national targets for the installation of broad-band infrastructure and no timescale for Government-led action. Government has conducted no detailed analysis of the number of jobs we stand to gain or lose.[3]

5.8 We recommend that a top priority for CITU should be to involve all Government departments and agencies and local government authorities in a nation-wide survey of the possible benefits and disbenefits of developing a National Information Infrastructure and its applications in the UK.

5.9 The number of different bodies involved in promoting the use of IT in schools brings sharply into focus the need for co-ordination not only in the formulation and implementation of policies, but for a channel of regular communication between ministers and senior officials working for all the various agencies working in this area, as well as the DfEE. In the public sector alone, the National Council for Education Technology, OFSTED and the Teacher Training Agency gave evidence to this enquiry in addition to the Department.[4] We received a cri du coeur from the NCET about their own lack of leverage in policy making, about the need for the DfEE, OFSTED and NCET to be rowing in the same policy direction, and about the fact that if the teacher training framework does not ensure that new teachers are trained in IT "we have the system moving against itself" (Q 264).

5.10 Sticking to the example of the education sector, we acknowledge the work of the DfEE and associated Departments in the Superhighways for Education initiative (see paragraph 4.63 above). The number of responses--431--to the consultation exercise indicates the extent of interest in IT applications in the education sector, and the follow-up report, Superhighways for Education: The Way Forward provides a useful scoping exercise which highlights some of the main areas for further action, such as teacher training, where the Government looks to the TTA to take the lead in England. But the 24 glossy, well-presented pages of Superhighways for Education: The Way Forward bear no comparison to the report prepared for the US National Information Infrastructure Advisory Council on Connecting K-12 Schools to the Information Superhighway.[5] This report takes as its starting point the premise that "connecting all of America's public K-12 schools to the national information infrastructure (NII) would be valuable and is achievable." It identifies three main challenges--funding, teacher training and educational content--and provides an economic analysis of various options for connecting schools to the NII. The report is longer, less glossy and more helpful in suggesting possible courses of action than the Superhighways for Education documents. Several of our witnesses, not least the Lord Privy Seal (Q 1069) and the Director General of OFTEL (QQ 1045-1048), highlighted the "can do" philosophy of many American citizens as a significant factor in building the US NII. We consider that in the context of creating the US NII the publication of clearly written "how to" information has played a significant part in fostering the "can do" philosophy.

5.11 The Lord Privy Seal provided a helpful written memorandum (pp 553-558) in response to this Committee's question of how the UK Government, without a Task Force, matched up to that of the US in achieving each of the nine principles identified in the US National Information Infrastructure and Task Force Agenda for Action. This memorandum served to convince us further that a great deal of progress has already been made in the UK, and that the lack of a central dynamic focus not only obscures this progress, but acts as a barrier to its further development. Although we hope that the work of GEN 37 can be given more publicity, by definition a Cabinet Committee comprises ministers--in the case of GEN 37 at a very senior level--meeting behind the closed doors of Whitehall. It is not well placed to tap the energy, expertise and enthusiasm of the private sector, or to conduct the nationwide publicity campaign which we are convinced is needed. We have therefore concluded that a further organisation is needed, to fulfil a high profile, nation-wide, as opposed to a Government-wide leadership role.

5.12 To assist the Chairman of GEN 37, and to encourage a nation-wide debate on the creation of an Information Society, we accordingly recommend the creation of a UK Information Society Task Force (ISTF) by the end of this year. The ISTF should be chaired by an enthusiast. Its two main functions should be to act as a think tank to Government, and to ventilate views on the creation and development of the UK Information Society. There should therefore be a presumption that its reports will usually be made public, and should be presented to Parliament as well as to the Cabinet Committee. It should, however, retain the discretionary power to advise the Government in a confidential capacity where it sees fit.

5.13 The ISTF should have the task of identifying barriers to the development of the UK Information Society, and recommending the appropriate remedies. One of the first jobs of the ISTF should be to draw up a policy document setting out its advice to the Government for a UK agenda for action, involving both the private and the public sector. This should be disseminated as widely as possible, with the aim of encouraging a national debate along the lines of the debate which the KickStart report has engendered in the US. Following the example set by such Task Forces in other countries, information about the activities and publications of the ISTF should be made available on a widely-publicised site on the World Wide Web. This should include an e-mail address encouraging citizens to participate in a nation-wide debate on the shaping of a UK Information Infrastructure. It should include links to other key web pages, so that, for example, a teacher could use the ISTF site as an easy access point for specialist advice on in-service training, IT applications, assistance available from charitable bodies, etc.

5.14 The members of the ISTF should be drawn from government (including regulatory bodies), industry, commerce, consumer and academic interests. Since the development of the Information Society should be a national objective, we would wish it to represent the full diversity of interests, expertise and opinions across society as a whole. We believe that with the leadership of such a Task Force, the UK could make the best of its advantages, and gain a sense of purpose in building an Information Society open to all.

5.15 We would envisage the membership of the Task Force being similar to that outlined for the US American Advisory Panel in paragraph 5.4 above, with the addition of representatives of publishing companies and the printed media. A good starting point when looking for members for the Task Force would be the Technology Foresight Information Technology and Electronics (ITEC) Panel, whose Chairman and members gave clear and convincing evidence to our enquiry. In April 1995 this Panel, and that on Communications, published reports which are relevant to the building of the Information Society in the UK. The Communications Panel recommended inter alia that the UK's regulatory regime should evolve to allow the UK to gain the maximum economic and social benefits from the convergence of telecommunications, broadcasting, electronic publishing and information technology. It also recommended that the Government should set an example to industry and to the public by becoming a leading-edge user of telecommunications and information technology, and that every school should be connected to public broadband digital networks giving access to high quality, interactive, educational software, including video-on-demand. The ITEC Panel's recommendations included a call for a national Information Superhighways Initiative and emphasised the need to remedy the issues leading to the UK's low competitive ranking for computer literacy.[6] The experience of the Technology Foresight Panels leads us to consider it essential that the Government should publish written responses to any reports made by the ISTF. Otherwise there will always be a tendency for what may be useful recommendations to sink without trace.

5.16 Other countries which are developing NIIs have set targets for the development of broadband networks, roughly centred on the beginning of the next millennium. We accept the view put forward by the Lord Privy Seal (Q 1062) that the danger of any Government imposing such targets is that it can misjudge the situation. Nonetheless, we consider that the agreement between Government and the private sector of specific public sector infrastructure objectives in the UK, for example for connecting all schools to the Internet, and all GP practices to their local hospitals, would serve a two-fold purpose. First, it would serve to indicate that the technology of the Information Superhighways of the future exists today and can act to the benefit of us all, rather than being a distant future dream. Second, it would give all those concerned in building the Information Society goals at which to aim and against which to judge our progress.

5.17 The ISTF would play a crucial role in proposing and monitoring the delivery of policy objectives, thus both helping and stimulating GEN 37 to deliver the necessary decisions in government. We were surprised by the Northern Ireland Office's lack of response to our enquiry, which, in contrast to the responses by the Scottish and Welsh Offices, indicates a possible failure to grasp the potential which the Information Society could offer all parts of the United Kingdom. Moreover at present, in the absence of cross-Departmental commitment to the Information Society it is difficult to see how even a simple target might be delivered in practice. For example, one barrier to the development of Internet use in schools which emerged in evidence was the inclusion of many teachers among the "information can-nots". An obvious long-term solution would be to require IT training to be a prominent feature of training courses for new teachers, but eliciting information on that alone entailed circular correspondence between the Department for Education and Employment and the Teacher Training Agency. For Parliament, there is an issue of the Next Steps Agencies, however unwittingly, being less susceptible to parliamentary scrutiny, and certainly less accessible, than policy Departments.[7] The wider issue is that of the policy initiative needed to resolve a problem, which could be addressed relatively simply and cheaply, falling between the stools of Department and Agency. This is not just a question of "Turf Wars"--inter-Departmental struggles--which may occur. It is an even more serious one of no single Agency or Department thinking that it is their particular responsibility to take the initiative. GEN 37 should act to identify such problem areas, and, where necessary, identify the Department or Agency responsible for action.

Regulatory policy

5.18 The United Kingdom has led the world in liberalising its telecommunications infrastructure. The Government's policy in this area has been highly successful. Witness after witness stressed the vital contribution this had made to the development of the Information Society in the UK. Particularly impressive was the fact that major players, including CompuServe, Mercury Communications, Microsoft and Nortel, emphasised the importance of the deregulated telecommunications environment to their operations in the UK. It is in the nature of reports of this kind that the emphasis of their recommendations--in this case our Agenda for Action--is on areas where change is needed. This must not obscure the fact that competition is, and will be, the key to the development of the Information Superhighways, and the UK telecommunications market is arguably the most competitive in the world. This is a UK success story on which we, as a nation, must build.

5.19 The UK's lead in opening its domestic telecommunications market to external competition has not been paralleled by equivalent action in other countries. We welcome the firm lead which the European Commission is taking in attempting to open up the telecommunications markets in all EU Member States, and agree with the Director General of DG XIII that this must be the top priority in this area.

5.20 Several US companies, including AT&T, NYNEX, US West and TCI have benefited from access at preferential prices when interconnecting with telecommunications networks in the UK. Despite the recent passage of the US Communications Act, UK companies wishing to invest in the US telecommunications market still face restrictions. In common with several of our witnesses, including OFTEL, "we are still not satisfied that the US market is as open as it might be" (QQ 1038-1040). We urge the US Government to demonstrate the strength of its commitment to building the Information Superhighways by lifting the restrictions which are currently frustrating the aspirations of companies such as BT and Cable & Wireless to expand their activities in the US.

5.21 In addition to liberalising telecommunications infrastructure in the UK, the Government's regulatory policy has attempted to foster network competition through tough controls on BT, as the previous monopoly network operator which still enjoys the majority share of the domestic telecommunications market. OFTEL summarised this policy in evidence in the following terms:

5.22 The word mosaic[8] conjures up positive images, which the current map of cable network operators in the United Kingdom does not necessarily inspire. As the ITC told us (p 491) "although much of the publicity surrounding the launch of what was called the cable revolution in the early 1980s related to interactive services, cable operators currently have two distinct businesses of a not very innovative nature: the distribution of cable television channels and the provision of a plain old telephone service. Other services are being explored or trialled but the picture is of a series of different initiatives, often localised, without a strong national theme." In other words, the cable companies are not developing the entertainment services which they were expected to in 1981. This is a fact of life, rather than anyone's fault.

5.23 What need not be accepted as a fact of life is the present restriction in the licences of BT, Mercury and certain other Public Telephone Operators (PTOs) on the conveyance of entertainment services in their own right. In 1990 the Government's consultative document Competition and Choice: Telecommunications Policy for the 1990s[9] proposed not to remove this restriction. In the Government's own words, "a majority of respondents disagreed with the proposal and supported an earlier lifting of the restriction. They argued that a continuing restriction would delay the introduction of new technology and innovative services and that, provided BT and the other PTOs were required to grant reasonable and non-discriminatory access to their networks, more effective competition could be expected to emerge."[10] The Government decided in 1991 not to act on this majority view, but were persuaded instead by the arguments of the cable companies against allowing telecommunications operators to convey entertainment services. The 1991 White Paper announced "while there may be room for debate as to the degree of risk to those companies' investment plans if the restrictions on the PTOs conveying entertainment signals were to be lifted, the Government's conclusion is that the potential benefits are not sufficient to outweigh that risk."[11]

5.24 Since 1991 the "room for debate", not all of it constructive, has continued. There has been a dynamic increase in the number of companies providing telephony services in the UK, and the cable companies are investing heavily in providing optical fibre networks. Over five billion pounds has already been invested in cable infrastructure in the UK, and by the end of the decade it is estimated that about 12 billion pounds will have been invested in this infrastructure (Q 52). But the cable companies have, for the most part, either not chosen or have not had the resources to develop the wide range of interactive services which other countries are seeking to develop. Critical mass is essential for network operators to develop the new advanced applications, both in the United Kingdom and on a global basis. The present regulatory structure was designed before the Information Age became a reality. When privatisation and market liberalisation of the British telecommunications industry began in 1984 the new cable communications operators were expected to provide a range of entertainment services, which BT is not allowed to offer. The fact that in 1996 cable operators would derive much of their business from telephony was not anticipated. In allowing the persistence of "asymmetry"[12] in the hope of encouraging network competition, the Government and OFTEL may not be acting in the long-term interests of the British consumer.

5.25 The 1994 report by the House of Commons Trade and Industry Committee on Optical Fibre Networks was motivated by "concern that Government policies could be hindering, or not sufficiently encouraging, the development of the most advanced infrastructure and services, and that this could result in the UK falling behind other countries, with damaging consequences". That report considered that early lifting of the restrictions on the PTOs would be likely to promote investment in broadband infrastructure, and recommended changes in regulatory policy, including the removal of the restriction on PTOs conveying or providing entertainment.

5.26 The Government's response, published in November 1994, rejected the Committee's recommendations for regulatory changes. At that time, the Government considered that "in the future ... the relative importance of regulatory issues is likely to recede, as competition becomes even more established in communications services. The issues for the industry will then focus on applications and services, and consequently other roles of Government will become more important, such as being a consumer and purchaser of services and in facilitating research and experimentation."[13] This prediction has not yet materialised and all too often the protracted, and on occasion somewhat bitter, debate over the regulatory framework in the UK acts as an unnecessary distraction from the development of the broadband infrastructure, and by extension its applications and services, in the UK. This must stop.[14]

5.27 In evidence to this Committee the Director General of OFTEL explained that he intended to start to review the policy on whether BT should be allowed to convey broadcast entertainment to homes "for Government to take a view at the beginning of 1998, which means the work will start in 12 months" (Q 1034). We believe that this review has already become overdue. The attempt to go against the powerful trend towards convergence of the telecommunications and broadcasting industries is unlikely to succeed in the long term, and in the short term is preventing BT from developing its role in service provision. The US already enjoys a dominant position in this industry; one effect of the UK's current regulatory policy is to assist its global competitors.

5.28 OFTEL's review of the restriction on BT having a national broadcast conveyance licence is not intended to cover the restriction on providing broadcast entertainment services, which OFTEL itself said was "arguably of greater commercial significance than the restriction on conveyance" (p 545). Mr Cruickshank said that "the issue as to whether BT can be a provider, ie like Sky and have its own programme content, is something for the Government and the Government has continued to see ... 2001 as being an appropriate time for that to be considered" (Q 1041). We consider that the restrictions on telecommunications companies either conveying or providing broadcast entertainment services in their own right should be reviewed as a matter of urgency, with the aim that both reviews should be completed by 1998. We acknowledge the Government's position, which is that the billions of pounds of further investment needed by the UK cable franchisees if the Government's objectives are to be achieved would be put at risk if the 1991 White Paper framework were reviewed prematurely, and that any adjustment of policy could markedly alter the current market value of existing cable franchises.[15] Nevertheless, taking all the relevant factors into account, we consider that full competition should be allowed from 2001, to capitalise on the enthusiasm for the use of new technologies which the millennium celebrations are expected to foster.

5.29 A further restriction on BT has been the price cap. OFTEL has proposed a reduction in the coverage of the price controls to those parts of the market where competitive choice is proving slowest to develop. We welcome this proposal, and the commitment that the period of price control from 1997-2001 will be the last. We are particularly glad that OFTEL has not seen fit to extend the proposed new retail price controls to broadband services (pp 549-550).

5.30 The "local loop"--the part of the telephone network from the home to the exchange--is vital to the development of a UK NII. The use of radio is likely to be of key importance in providing the local loop in rural areas. We welcome the Government's announcement that it will be awarding three licences for radio fixed access in the 10 Ghz band to provide ISDN services, together with a further two licences in the 2 Ghz band to provide services in remote rural areas, including much of the Pennines (p 527). In view of the dramatically growing demand for radio spectrum we also welcome the publication in June 1996 of the Government's White Paper on Spectrum Management: Into the 21st Century, which aims to improve the way in which the finite resource of the radio spectrum is managed so that future growth in demand can be accommodated.

Regulatory convergence

5.31 Convergence--in particular, the breakdown of old distinctions between the broadcasting and telecommunications industries--raises a number of difficult issues with respect to regulation. We are moving out of an era of relatively tight regulation of broadcasting, which could be exercised by the Independent Television Commission because it enjoyed the leverage over broadcasters provided by its power to grant access to the scarce and valuable "commodity" of a broadcasting channel. We are moving into an era in which there will not only be a multiplicity of television channels, but where the types of information and entertainment that used only to be "broadcast" by television and radio companies can be delivered to (or downloaded by) people along a variety of networks, including telephone lines.

5.32 At the same time, the divide between the two main types of devices through which such entertainment and information products are received--the relatively cheap television, which can be found in almost every household, and the much more expensive personal computer, which can be found in perhaps one in five--is being blurred by technological change. To receive the variety of services made possible by the digital revolution, televisions will become "cleverer" (and more expensive), while network computers are being developed which are cheaper than existing PCs (and "stupider"--that is, only as clever as they need to be to carry their owners into the world of information superhighways to which their telecoms supplier will provide access).

5.33 Meanwhile, questions are also being raised about the regulatory regime for telecommunications. This was developed to manage the transition from market dominance by the original state-owned national telecommunications monopoly to a fully competitive telecoms market, in which the customer enjoys real choice between a number of network suppliers. So evolution was to be expected; indeed, the Director-General of OFTEL has frequently indicated that he would consider it a success to have brought the industry to a point at which his office was no longer needed. But this adds to the need to review the regulatory structure, and to begin looking forward to a rather different regime.

5.34 The key questions concern the role of, and relationships between, the Independent Television Commission (ITC), OFTEL and the Office of Fair Trading (OFT). There is a secondary issue as to whether the maintenance of a further body or bodies concerned with broadcasting standards and complaints, beyond the ITC itself, any longer makes sense. A larger question concerns the validity of any national regulatory regime in an era of satellite broadcasting, global information superhighways, the European Single Market for business and the extension of the role of the World Trade Organisation into such key issues as intellectual property rights. But if the UK does not put its own regulatory house in order, the chance of it living comfortably in the global village is all the more remote.

5.35 In the present regime, there is clearly considerable overlap--or difficulty in drawing boundary lines--between the ITC, OFTEL and the OFT. This is not, of itself, an overwhelming argument for change: a little competition between regulators may even be healthy. But changes in broadcasting and telecommunications are going to make these overlaps greater, these boundaries harder to draw, and therefore tend to increase uncertainty amongst the regulated.

5.36 Uncertainty can be expensive. A confusing and overlapping regulatory regime is a cost burden on business. Awkward boundaries can create economic distortions, leading to a misallocation of resources. Meanwhile, the boundaries as presently drawn require excessive attention to be devoted to semantics rather than substantial issues. It will become increasingly difficult, for example, to say what does and what does not constitute "broadcasting", so that the remit of a broadcasting regulator will be constantly up for debate.

5.37 If we want our regulators to carry out useful functions on behalf of society, rather than count angels on the heads of pins, we must refocus attention on the specific purposes of regulation. If the United Kingdom is to maximise the potential for economic growth and human satisfaction offered by the digital revolution, it needs a regime which is logical, light and clear.

5.38 What is regulation for? Broadly, the purposes of regulating these two industries can be categorised under two headings. Regulators are concerned with competition and content. Of course, these two concerns themselves may interact: the purpose of protecting competition is not to satisfy some arcane principle of interest only to economists, but to prevent the customer suffering from unjustifiably high prices and restricted content. Nevertheless, there are issues to do with decency, quality, public service and national culture which are distinct from issues of competition. At present, some of these are dealt with by regulators who are also concerned with competition, some are not. It is the Committee's view that they are best dealt with separately; that maintaining the distinction reduces the risk they will simply muddy the waters of competition policy, leading to outcomes which satisfy no clear set of criteria.

5.39 The first question, therefore, concerns the role of OFTEL. OFTEL is, pre-eminently, an economic regulator--and that is how it sees itself. A mark of this successful focus is the extent to which it has managed to devolve certain non-economic aspects of its work to self-regulatory industry groups. But will it, in future, continue to make sense for competition issues in telecommunications to be dealt with by a body dealing only with this one industry? Is there, in other words, a role for OFTEL in the future? One possible option would be for its scope to be broadened to cover all forms of broadcasting--becoming, in effect, OFCOM (Office of Communications).

5.40 In our view, however, this is not a long-term solution. While it would resolve certain boundary issues in the short term, they would merely re-emerge around the newly-defined territory. The overlap with the OFT would meanwhile be increased. For the analysis of competition issues the key question is the definition of the "relevant market" within which a company is operating--according to circumstances, this may be wider or narrower than the communications industry as defined for regulation. While certain issues in broadcasting (for example, whether one company may be able to establish and abuse a "gatekeeper" position for subscription television) may seem to be industry-specific, they are best analysed according to the general economic principles underlying competition policy. A competition authority unconstrained by artificial sectoral limitations is, ultimately, the proper resting-place for such responsibility.

5.41 Competition policy is, of course, itself up for review. Nowhere is the question of whether a distinct national regulatory regime can be maintained, when Brussels has competence with respect to trans-European competition policy, brought into sharper relief than in the audio-visual industries. These are, after all, increasingly dominated by European and indeed global companies. To abdicate all national regulatory responsibility would, however, be quite wrong. It would leave a vacuum; there are still many competition issues which fall to national authorities to resolve. What is however clear--and generally agreed--is that national competition policy should be reformed to go more easily with the grain of the European regime; at the same time, we hope, encouraging the reform or at least refinement of the Brussels regime.

Content regulation

5.42 If competition issues in the communications industry were to be dealt with by the same authority involved in resolving these across other industries--the OFT or whatever successor emerged from the reform of competition policy--is there a role for any industry-specific regulator at all? There are those who argue that content regulation is bound to fade. They argue that days when a government body could restrict what is seen in people's homes before a certain hour of the day, for example, are clearly fading: if the VCR[16] has not undermined the "threshold", satellite broadcasting and the availability of multi-media products via the Internet clearly will.

5.43 While it is a mistake to leap ahead of reality in regulation--terrestrial, time-specific, non-interactive broadcasting is still the dominant source of audio-visual entertainment in people's homes--we must look ahead to a time when controls on this form of broadcasting would cover only a small proportion of what is available. This raises concerns about the protection of privacy, the control of pornography, libel, fraud and general enforcement of the criminal code in the Information Society.

5.44 American experiences in attempting to restrict the carriage of pornography along the information superhighway have given force to those who believe no content regulation will be possible. Clearly, we are entering a world in which parents in particular will need to accept more responsibility for what they and their children see and hear. Quite old-fashioned technology, like the off switch on the television or computer, will still be available to them; while new filtering devices are coming on to the market and service providers are beginning to construct closed worlds, or "walled gardens" within their online services. By differentiating the parts of the Internet world to which subscribers buy their travel ticket, they can enable parents or schools to close off access to the red light districts. The market, in other words, is itself generating a range of solutions to these concerns about the new, unregulated world.

5.45 Where these are deemed to be inadequate, and government intervention is needed, it is also clear that as much as possible should be agreed internationally. There are no customs posts in cyberspace. The ability to circumvent national restrictions on the Internet, entering information superhighways via another country's telecommunications network, is already evident. It is also plain that no one country can protect the intellectual property of its citizens satisfactorily: global agreement and enforcement will be ever more necessary in the digital age, with its revolutionary potential for unlimited, perfect reproduction. Finally, any attempt to "hoard" encryption systems for the benefit of one country would seem misguided. Export is simply too easy. But again, there are issues here which must be resolved internationally, to ensure that the defence and law enforcement agencies of national governments are not emasculated by the growth of the Information Society.

5.46 Nevertheless, it would be wrong to conclude, here and now, that there will be no role for some kind of national successor to the ITC and the non-economic functions of OFTEL. There may still be need for an agency concerned with some non-competition issues relating to the content of what is provided via the networks of the future. Competition and self-regulation will ensure many social objectives are met. But the functions of the ITC will not simply disappear overnight. The transition will require sensitive application of an evolving regulatory regime.

5.47 Moreover, governments of the future may wish to ensure that the communications industry continues to carry out certain public service functions. These will be best monitored by an agency which is distinct from the competition authorities of the future. Such issues as how the principle of universal access should evolve in the information age will need to be kept under review. There may continue, for some time at least, to be some residual licensing role to be carried out, and some public service objectives to be met in the execution of such a role. The role of Britain's public service broadcaster, the BBC, in such a world--and the access of the BBC to the citizens it was created to serve--is one of the issues that will have to be considered in such a context. It is not too soon for consideration to begin of these difficult issues of public policy.

5.48 To sum up our recommendation for the near future, we consider that by 1998 a new regulatory regime for both telecommunications and broadcasting will be needed, distinguishing between issues relating to competition in the provision of networks and services, and issues relating to content. We were encouraged that the European Commission has suggested a timescale for consideration of this problem leading to legislative proposals in 1998 following a wide-ranging debate next year. We call on the Government, OFTEL and the ITC to play the fullest part in the EU discussions on this subject.

"Undesirable" content

5.49 One of the Internet's greatest attractions is the infinite variety of its content. The ease of small-scale publication on the Internet with the aid of desk-top publishing software means that almost any material can be attractively and professionally presented by a single individual. But the very openness of the Internet to all the weird and wonderful facets of human life has its downside, which is reflected in growing concern about the minority of material published on the Net which is much more weird than wonderful, and some of which is downright unpleasant. There is particularly widespread concern over easy access to sexually explicit material, including paedophilia, and material relating to drugs, religious cults and racist groups.

5.50 Even if it were desirable, it is unlikely that censorship of Internet content will ever be possible, partly on technological grounds, partly because of its global nature. The best hope of controlling the circulation of undesirable material on the Internet is self-regulation. Just as there is no single "killer application" for the Information Superhighways of the future, so too there is no single "killer solution" to the new problems which will inevitably be associated with the information revolution. We agree with ICSTIS, which has a considerable amount of relevant experience in supervising standards of telephone information services, that a package of measures is likely to be needed combining technological solutions with an effective and flexible Code of Practice and system of industry regulation. We join the Government in urging the Internet Service Providers' Association to implement a Code of Practice covering the problem of unacceptable material on the Internet. ICSTIS should be used as a model for consumer protection in Internet-based and other similar services.

5.51 Much of the concern about undesirable material on the Internet centres on the possibility of children accessing adult-rated material. For school use a number of "walled garden" environments already exist, which do not allow access to the sites which cause such concern. In the work environment employers may prohibit their employees from joining newsgroups, which may contain some of the more explicit material available on the Net. We have no doubt that where there's a will there will always be a way to by-pass the filtering software which is now becoming widely available. Nonetheless, we consider that such software, which allows, for example, parents to identify categories of information which they do not wish their children to see, represents a significant step forward. We call on the Government to express its support for the Platform for Internet Content Selection (PICS) as an industry standard.

5.52 There is also concern--which we share--about the spread of racist and anti-semitic material on the Internet, including anti-semitic literature masquerading under the guise of "revisionist" history. As the use of the Internet and other means of "superhighway" communications develops, so too will its potential for increasing international tensions. We have in mind, for example, material published electronically by extremist religious groups. We also noted that although special police branches in England and Wales use the Internet for intelligence gathering about race hate material there is no specific monitoring. The Home Office, in collaboration with its international partners, should keep this situation under close review.


5.53 Using IT to "re-engineer Government", as is planned in Singapore, could make life easier for individuals, particularly those who are heavily dependent on state benefits and public services for their support, and for industry, whilst at the same time stream-lining Government Departments and helping to prevent fraudulent benefit claims. We welcome the fact that CITU has been looking at the technology, costs and benefits of the further exploitation of IT to deliver greater efficiency in government. As the Lord Privy Seal told us, "IT is making it possible to restructure our dealings ... with the consumer ... in a way which will not necessarily align or even recognise the divisions between Government itself internally ... we once had no choice but to deal with clients agency by agency ... IT now makes it possible for the details of Government organisations to become really irrelevant to businesses and the citizen ... it holds out the possibility of a one-stop-shop" (Q 1055). Clearly there are difficult calculations to be made of whether the cost of providing the systems and public access terminals would be balanced by the administrative savings. We were encouraged that CITU is already addressing these issues (QQ 1058-9, 1080)[17] and note that the Government of Singapore hopes to save public money by introducing its own one-stop-shop terminals, whilst at the same time improving Government's service to the citizen.

5.54 The Inland Revenue's pilot system for the electronic submission of tax returns by approved tax agents is expected to save both the agents and the Department money, as well as speeding up the tax filing process. By April 1997, when the Self Assessment regime is introduced, all approved tax agents should be able to submit electronically self assessment tax returns on behalf of their clients.[18] Subject to satisfactory evaluation, we recommend that this project should be extended to enable any tax payer who wishes to submit his or her return electronically to do so.[19] Pilot projects, such as the Cambridge Childcare Project, should be developed by public/private partnerships with a view to placing a "front end" across the vertical divisions of government departments, thereby creating a virtual "one-stop-shop" for those seeking information.

5.55 We also noted the Lord Privy Seal's frank analysis of the need to manage change within Government if a policy of using IT to re-engineer Government were to be adopted. "Pretty dramatic organisational changes ... will have effects on public sector employment. That in itself is a form of change which is going to need internal management and care and sensitivity for public employees. There is going to be a need for training. There is also ... clearly going to be a need ... to avoid turf wars within Government. So far, as far as I can make out, the co-operation between Government departments has been enthusiastic and good but of course when it comes to talks about ... paying for these matters then we begin to see blood all over the various carpets" (Q 1060).

5.56 Despite protestations of ministerial co-operation,[20] concern about Turf Wars has continued to be voiced. News International thought that there had been a certain amount of "jockeying for position" between the DTI and the DNH, which for the most part was being resolved. They also believed that "the ITC and OFTEL ... see avenues down which both of them could justifiably go, and perhaps are to some extent not jockeying for position but certainly staking out their ground. By all means let them fight this out as long as it does not inhibit progress while they are doing it, which is the important thing" (Q 991). We agree, and were glad to see that the Lord Privy Seal was clearly aware of this problem as an unnecessary and unwelcome impediment to the development of the Information Society in the UK.

5.57 Many witnesses referred to the need to unlock British content for the development of services. One way of achieving this would be the development of demonstrator projects, particularly as public funding for such projects need not necessarily clash with EU discipline on state aids (Q 651). We recommend that the DTI develop a Content Foresight Initiative as part of its Technology Foresight programme.

5.58 We welcome the European Commission's INFO2000 programme, which focuses on information content providers in its aim to stimulate the development of a European multimedia industry. We also applaud the DTI for drawing the attention of UK companies to this programme with a special factsheet as part of its Information Society Initiative. Funding available for selected projects under the programme will be up to 50 per cent, and about half the total budget is to be spent on selected European multimedia collaborative projects. Although the DTI has noted that competition for INFO2000 grants will be strong, it has also stressed that companies which are successful in their applications "can reap rewards going beyond finance for a particular project. They can forge new alliances with innovative European companies and win footholds in expanding overseas markets."[21] We hope that British companies will participate wholeheartedly in the INFO2000 programme.

Government information

5.59 There are three major obstacles to adopting an "Open Government" policy for use of the Internet in the UK. First, in the absence of an overall policy regarding the electronic publication of Government information Departments are free to pick and choose what information they publish. Second, there are conflicts between the need for Departments and Agencies to maximise revenues and the desire to make government information widely and freely available. Third, although some UK public sector web pages are commendably well designed--OFTEL's, which has links to BT and Mercury, is a particularly good example--many are not.

5.60 Promoting the use of electronic publishing to facilitate widespread access to Government publications is one of the most important steps which Government could take to encourage the development of the Information Society in the UK. The Government has written to Departments to try to encourage them to place consultative papers on the Internet. We agree with the Lord Privy Seal that "encouragement will help", but not with his assertion that "in the end it is a matter for individual departments" (Q 1075). Writing "encouraging" letters to Departments is not enough. The goal should be that all Government publications providing information of widespread interest to citizens should be made available free of charge in electronic form. This goal would need to be co-ordinated across all Government Departments and Agencies to promote uniform standards and to ensure that this policy objective is achieved in a timely and orderly manner. CITU, which is already working on the important concept of an electronic "front end" for Government information, has a key role to play in this area.

5.61 We recommend that the Government should set all Departments and Agencies minimum standards for the electronic publication of information. These standards should cover (i) the categories of information to be published electronically, for example, all press releases, (ii) minimum time standards for the electronic release of publications,[22] (iii) common presentation standards, so that all Government electronic publications have the same "look and feel", irrespective of the Department or Agency in which they originated, and (iv) the timetable to be adopted for making each category of publication available free of charge in electronic form. In particular, we call on the Government to announce in their response to this report that from henceforth all Green Papers will be available for consultation electronically.

5.62 We attach particular importance to the timely availability of Government information on-line. As a general rule, for example, press releases covering important announcements are highly sought after for at most a few days, so leisurely electronic publication timetables which result in them going on-line when interest in them is either extinguished or subsiding cannot be defended. Most WWW users must have had the depressing experience of locating a website which promises to provide the information they need, only to discover that it was last updated longer ago than they can bear thinking about. On-line Government information will need regular updating to guarantee, insofar as this is possible, its accuracy. All Departments would need to be aware of the on-going nature of this commitment, and of the price tag--and the effort--which will be attached to achieving it. We firmly believe that the benefits of such a major, Government-wide commitment would far outstrip the costs, and consider the recommendation outlined above to be one of the most important in our Report.

5.63 Several witnesses considered that the Crown copyright regime hindered the availability of official information in the United Kingdom and that its abolition, or relaxation in certain areas could significantly benefit the information and electronic publishing industries. It was suggested that the absence of a similar regime for official information was one reason for the USA's leadership in the development of the Information Superhighway. We recommend that the DTI should establish a Copyright Working Party to examine these concerns.

Towards universal access

5.64 The Information Society is not an exclusive club. Every British citizen should be able to become a member. In the long term, the aim must be that a majority of homes will have access to the Information Superhighways, perhaps via a low cost, low memory terminal or a television set-top box. But until this ideal is achieved, and, indeed, as a necessary stage towards achieving widespread knowledge, skills and use of IT, special arrangements will need to be made for public access. Demand for such access has already been demonstrated in the UK by the spread of cybercafés providing access to the Internet, often with personal assistance, known as a "hand-holding" facility, available as an optional extra, as well as the refreshments more generally associated with cafés. These cafés[23] can provide a good opportunity for accessing the Internet for the first time, but they are expensive.

5.65 A range of resources, applications and models for service delivery will therefore be needed to enable all citizens, their communities and the nation as a whole, to reap the full benefits of the Information Society. Public libraries in particular have experience of providing information through different media to many people. Their facilities can be used for lifelong learning; recreational use; answering day to day queries and problems; accessing business, community and local and national government information; and for accessing the national heritage of literature and art. We support the finding of the DTI's Multimedia Industry Advisory Group that "it will become important that the public has access to multimedia and on-line services regardless of their location and personal circumstances ... public access points to networks and equipment capable of handling multimedia applications could be established in libraries, community centres and other public buildings."[24] A range of locations is likely to be needed, including, as the Lord Privy Seal and the Head of CITU suggested, some Post Offices (QQ 1055, 1059).

5.66 Public libraries and CABs can also provide a supportive environment in which people can try out new technologies to which they might not otherwise have access, either at home or at work. Their staff should have the skills necessary to ensure that these facilities are exploited for the benefit of users. The combination of access, comprehensive coverage, skilled and supportive staff and powerful new technologies should mean that public libraries are well placed to help minimise the gap between the "information rich" and "information poor". We recommend that a nationally co-ordinated initiative to enable the benefits of the Information Superhighway to be delivered using public libraries be developed and supported by Government as part of the Information Society Initiative. The possibility of developing FreeNets[25] run by public/private partnerships, along the lines of the American and Canadian models, should be examined.

5.67 The Citizens Advice Bureaux could become more effective and efficient if all their bureaux were linked to an on-line database system to make unnecessary the regular manual updating of their current databases, designed in such a way that it would be simple for volunteer staff without IT training to operate. The system should be so designed as to allow the collection of statistical information on the categories of problems on which advice is sought, and this statistical information should be made public at regular intervals.

5.68 On 27 June 1996 the Director General of OFTEL issued a statement on Improving access to the Information Society for Education and Public Access Points. This statement announced OFTEL's intention of encouraging "the telecommunications industry to adopt a responsible attitude to enable affordable access to advanced telecommunications services for all educational institutions and public access points. It will challenge the industry to demonstrate that regulation in this market segment is unnecessary by developing a collaborative approach which:

5.69 Mr Cruickshank explained to the Committee that the hope was "to act on a voluntary basis with the industry and with the education community to complement what they are doing already--because remember the cable industry are committed to link-ups and BT are doing it unconditionally". He saw his own role as being "to complement that, to put in place de facto, I hope, a universal service. There are a lot of schools and libraries which are not on this network because they happen to be in the 15 per cent area which nobody is interested in and so some better working together ... is necessary. I am engaged on a crusade, not a regulation." (Q 1052) We welcome this announcement and the Director General's initiative in setting up a Task Force to consider these areas, and encourage him on his crusade. This will provide an opportunity to discover whether a voluntary approach to universal service will be sufficient and, if not, what further action is required.

5.70 Perhaps partly as a result of the widespread use of English, which is the common language of the Internet, in the Commonwealth, several Commonwealth countries are amongst the world leaders in developing Information Superhighways. Developments in Singapore, Canada and Australia, all of which have a higher gross national product per capita than does the UK, are particularly advanced. At the same time, some members of the Commonwealth are amongst the poorest countries of the world. As a means of helping to bridge the gap between "information haves" and "have-nots" within the Commonwealth, we recommend that a programme of information-sharing and mutual assistance between Commonwealth countries in developing the use of Information Superhighways should be set up. The Government already supports a number of Commonwealth activities, including Commonwealth scholarships, the Commonwealth Secretariat, the Commonwealth Foundation and the Commonwealth Fund for Technical Co-operation.[26] The Foreign and Commonwealth Office should pursue our recommendation within these existing mechanisms for co-operation.


5.71 IT will play a major part in the working lives of all today's school children. Their future prosperity--and that of the nation as a whole--is likely to depend in no small part on the extent to which they leave school well skilled to become citizens of the Information Society. This is a matter which concerns many people, and should concern us all. Despite centres of excellence--which we support as test-beds for future more widespread developments--many schools remain poorly equipped with computer hardware and software, and with the personnel needed to support it. Although the costs of connection and teacher training are not inconsiderable, the purchase and installation of hardware is the largest upfront cost in equipping schools to exploit IT to the full. In some cases, use of older equipment, or least-cost technology where this is feasible, may reduce the cost. At St Matthew's Primary School in Cambridge, for example, we saw 12 perfectly serviceable 386 PCs, which had been donated through the initiative of a parent who worked for a bank which no longer needed them, being used with great enthusiasm by a group of pupils.

5.72 In America a number of schemes are in operation to encourage the recycling of used computer equipment from businesses and individuals. One such organisation is Gifts in Kind America, which connects companies willing to donate computers to needy school districts and nonprofit organisations. In 1994, Gifts in Kind America reported $118 million in donations, and total donations from this organisation had reached $100 million by the end of the first six months of 1995.[27] The UK needs to foster a similar sense of community-wide involvement in building the Information Society on this side of the Atlantic. We were therefore greatly encouraged by the creation of Free Computers for Education, which is encouraging companies nation-wide to donate computers for school use,[28] rather than allowing them to join the thousands of computers which are thrown into skips and landfill sites each year when companies upgrade their hardware. We call on companies nation-wide to support this scheme wherever possible, and for CITU and the CCTA to take the necessary steps to ensure that all Government Departments and Agencies allow suitable equipment which is no longer needed to be recycled in this way.

5.73 Adequate teacher training and support is essential if British schools are to take full advantage of the opportunities offered to them by the new information technologies. The aim must be that all teachers have adequate IT skills to enable them to feel comfortable about exploiting the benefits of IT to the full where this is appropriate for their teaching. As a simple first step towards this aim, we recommend that all initial teacher training courses should contain an IT module as an essential requirement. Despite the vital need to remedy IT skills shortages amongst teachers, our enquiry identified the need for improved co-ordination between the DfEE and the various agencies working in this area before this need can be addressed fully. The ultimate responsibility for sorting out the present confusion over who should be taking the lead in improving teacher training in IT rests with the Secretary of State for Education and Employment. We call on the Secretary of State to investigate this area as a matter of the highest priority for her Department.

5.74 The Government should also support the development of aids to in-service IT training for teachers, including video and CD-ROM. The possibility of providing an out-sourced service for schools, enabling them to pay a fixed, subsidised rate for a level of service including a specified band width and help-desk support, should be developed, based on the experience of the Withywood project at Bristol.

5.75 Lack of a sufficient range of appropriate educational materials means that on-line teaching methods are not at present a suitable means for delivering the essential elements of the core curriculum to the vast majority of pupils in British schools. We see a case for promoting the use of IT in schools through the development of interactive materials, and would like to see a far greater range of CD-ROMs specifically addressing the National Curriculum, in maths and science as well as in the arts. The need for educational content addressing British curriculum requirements should be addressed by a targeted R&D programme, for which public funding should be made available to encourage private sector initiatives in this area. We were also impressed by the use made of the local Information Highway during our visit to the North Carolina School of Science and Mathematics. This school is a test bed for information technology applications in education, and through electronic links was connected to seven regional "cyber campuses", thus spreading access to the first rate facilities enjoyed by the school's own pupils.[29] We see potential for similar links being established in the UK. These could enable outstanding schools to become centres of excellence in one or a number of subjects, and could also improve communications between pupils and specialist teachers, particularly in remote areas.

5.76 It should be a requirement that all new school building projects involving classrooms, laboratories and libraries should incorporate the installation of a local area network. Consideration should be given to including a requirement to cable schools in all new licences to cable companies.

5.77 There is already a danger of children from poorer households being disadvantaged in homework provision as compared to those from households who can afford appropriate hardware and software. This problem should be addressed by a combination of schools keeping suitably-equipped classrooms open "after hours" to allow homework to be done on site, together with special financial provision to support computer access in after-school clubs, since these are mostly used by poorer households.


5.78 The possibilities opened up by on-line training facilities are vast. In America, the Advisory Council on the National Information Infrastructure reported that "the desktop PC enables workers to draw on such diverse resources as online multimedia networks and live, interactive video conferences. From earning a master's degree or doctorate to receiving new product training, employees will increasingly come to rely on the Information Superhighway to further their career goals."[30] We would like to see a similar understanding of this potential in the UK. In North Carolina the Information Highway is being used to deliver education in prisons. We recommend that the Home Office should investigate the possibility of HM Prisons following suit.[31]

Higher education

5.79 In common with some major companies, but not all, the UK Higher Education sector is privileged in its access to an advanced broadband infrastructure. SuperJANET is the closest equivalent the UK has to a Superhighway backbone at present. Witnesses were divided over whether SuperJANET should be made more widely available to business use. It could not be widely used by business without significant upgrading of its capacity, although this could potentially be paid for by business itself. We recommend that a study be undertaken to assess the likely need for business access to SuperJANET, and, if a clear need is identified, that the DTI and DfEE consider funding mechanisms that might be appropriate to permit such access by industry for research purposes.

5.80 The Higher Education community has gained great advantage from the use of the Internet, particularly for e-mail and in facilitating international collaboration in scientific research. The system, however, is under strain. We noted concerns from the research community regarding inadequate access by research scientists to international sites. International collaboration is essential to the research and academic communities. We were impressed by US evidence of work in progress in some institutions to launch a priority service, for which a charge may be made to academic staff and faculty. The US National Science Foundation (NSF) has announced a Connections to the Internet programme to fund high-performance links from campuses and laboratories to the NSF's dedicated high-speed Internet backbone. The aim is for the entire network to gain capacity. Ultimately the NSF approach "could give everyone the chance to use "over-night express," "first class," or "third class" depending on content."[32] We recommend that UKERNA investigate the possibility of providing a similar service in the UK as a solution to the reported problems with international connections.

Health Care

5.81 Despite the impressiveness of the technical wizardry and clinical expertise engaged in telemedicine, the Committee considers that the most widespread benefits from the use of the Information Superhighways in healthcare are in the areas of administration and communication. An unacceptable amount of many, if not most, medical practitioners' time is spent bogged down in routine administrative tasks, chasing the "right" form, or an elusive hospital bed. The facility of GPs to book hospital appointments on-line would make life easier for all concerned, both patients and practitioners, and the Department of Health should set in place policy guidelines to encourage this. These guidelines would need to incorporate proposals for networking of GP practices, consultants and hospitals within a secure intranet system designed to ensure confidentiality.

5.82 The contract between health commissioning authorities and GPs states that "a doctor shall keep adequate records of the illness and treatment of his patients on forms supplied to him for the purpose." In 1993 a large national survey found that 8 per cent of general practices were already paperless.[33] In light of the support of the BMA for this change, we recommend that the Government should legitimise the keeping of medical records uniquely in machine-readable form, subject to strict safeguards concerning security, durability and back-up procedures, by removing the legal requirement for GPs to make records on paper. In their evidence the Department of Health expected that the necessary legal change would be made "very, very soon ... within weeks or months" (Q 436, pp 324, 335) but this change has not yet occurred.

5.83 There are far too many forms in use in the NHS. The "Fewer, Better Forms" initiative announced by the Secretary of State for Health on 15 April 1996 aims to remove an average of 1,900 forms a year from each General Practice. This process could be taken further if GPs and other health service practitioners were able to identify and down-load the forms they needed electronically, thereby reducing the current waste of paper, time and money. Witnesses were agreed on the considerable benefits which the NHSnet could bring, but, as with the question of IT training for teachers, we received a strong impression that all the major players were waiting for someone else to take action (Q 455), not least in deciding on the appropriate level of security for patient records. Again, the ultimate responsibility rests with the Secretary of State, who should cut through this log-jam. The Department of Health should draw up a clear plan of action to fulfil its own estimate that using e-mail for messaging and transmission of forms in the NHS could save at least £100 million a year. As they told us, "that buys an awful lot of hip replacements" (Q 433).

5.84 The standards applying to the security of health related information within the NHS Wide Network should apply equally to local authorities and the private sector.

5.85 The mishandling of new health warnings in the NHS has caused considerable confusion, and is under review. The use of an NHS intranet to disseminate new health warnings should be investigated as part of this process.

Environmental benefits

5.86 The DTI's teleworking study, which reported in September 1993 on the business and economic implications of teleworking, resulted in a recommendation that Government should aim to become a leading exemplar of the use of teleworking and of networking technology to achieve productivity, cost and service quality benefits. A further recommendation was that there should be coordinated action between DTI and other relevant Departments to understand and optimise the employment, environmental, energy, transport and other benefits and impacts of telework take-up by Government and Industry.[34] We support these recommendations, and would like to see further action in this field.

5.87 The DTI is co-operating with the DfEE, the Department of Transport and the DoE in commissioning research into teleworking and related styles of working. This research is intended to investigate the prevalence and location of the different styles of teleworking and the effects on productivity, employment, travel and the environment.[35] We recommend that the Government should also undertake research into the possibility of increasing flexi-working (working from home on certain days only), particularly on days when air pollution levels are expected to be high. The Government itself, as a major employer, should take a lead in encouraging this practice.

5.88 Although the paper-less office is unlikely to prove a realistic goal, the use of IT to reduce unnecessary use of paper whilst at the same time increasing efficiency, for example through the use of electronic filing systems, should be encouraged. Again, this is an area in which Government could lead by example.

Electronic publishing and archiving

5.89 The VAT regime for electronic publications appears to be inconsistent with that for printed books and journals, with electronic publications attracting full-rate VAT and paper publications attracting zero-rate VAT. It is difficult to justify a different regime applying to a particular body of information simply because it is delivered in one medium rather than another. This anomaly is unlikely to encourage the growth of the electronic publishing industry in the UK, despite the fact that there could be environmental as well as economic benefits if this industry were to expand. We recommend that electronic publications should be made subject to zero-rate VAT, to put them on a par with printed books and journals.

5.90 In the UK the legal deposit of printed publications in specified "copyright libraries", including the British Library, has been of vital importance in preserving the nation's written heritage. With the explosion in growth of electronic publications there are dangers that a large body of scientific, technical, cultural and social knowledge will be lost if arrangements are not put in place to archive machine readable materials satisfactorily. At present, some of the archive is maintained by publishers, but there is no guarantee that everything of value will be retained. The British Library has argued for a change to the laws of legal deposit so that it is extended to include material in machine readable form. We support this proposal, so long as certain safeguards, for example regarding copying of such materials and where they can be inspected, are included. Many issues will need to be explored, such as the technical issues of maintaining and refreshing such an archive, the problems of materials which will only be readable by the use of obsolete or obsolescent hardware and software, and the issue of what is an accurate snapshot of a fast changing database. We recommend the introduction of enabling legislation to permit the extension of legal deposit to machine readable materials. If the barrier to the introduction of such legislation is, as we suspect, the lack of time for Government Bills in Parliament there would be the possibility of a private member's Bill being introduced into the House of Lords.

Encryption and verification

5.91 Despite the belief of several witnesses that the "problems" of lack of security on the Internet and insufficient levels of encryption had been exaggerated, we consider that high grade security will be essential for many users in the digital world. Strong, end-to-end encryption must be opened up to business and commercial users as quickly as possible, subject to certain safeguards. We therefore welcome the Government's announcement on 10 June 1996 proposing the licensing of Trusted Third Parties.

5.92 The US Government's restrictions on exporting software from the USA which includes high levels of encryption is threatening to become a major barrier to the development of the Information Superhighways, which is in no-one's interests. The Government must join with other EU Member States in putting pressure on the USA to relax its restrictions on the export of encryption technology.

Grants and assistance

5.93 One of the activities which impressed us most in the USA was the KickStart Initiative for "connecting America's communities to the Information Superhighway". In January 1996 the United States Advisory Council on the National Information Infrastructure published a report intended to help community leaders launch their own KickStart initiatives. This report contains "A leadership guide to getting there", including identifying costs and sources of funding and meeting responsibilities as users and creators of the Information Superhighway. The report also includes material on intellectual property, privacy and security and resources, both in print and on-line, for communities. The UK needs an equivalent document, which should be drawn up under the guidance of the ISTF with a view to becoming essential reading for the many people in leadership roles throughout the country, including industry and commerce, teachers and school governors and local community groups.

5.94 But any print-on-paper document is bound to become out of date, and the need for information and assistance will be ongoing. We therefore recommend the compilation of an electronic register of bodies giving grants to facilitate the use of Information Technology in the United Kingdom. The need for such a register is perhaps particularly acute in the education sector.


5.95 There is a great deal of activity already taking place in the UK to create the Information Society and work towards the Information Superhighways of the future. Our recommendations are intended to build on that work, to bring together the large number of excellent but often disparate projects taking place nationwide and, above all, to enable the UK to benefit from the great advantages which it enjoys with its world class telecommunications, broadcasting and publishing industries. Other countries are pulling together their efforts in these areas to create their own Information Societies. The UK needs its own Government-wide, industry-wide, nationwide campaign to build our Information Society and ensure that everyone who wants to join it can do so. There is room for more than one Intelligent Island in this world, and room for more than one Agenda for Action.

1. US Advisory Council on the National Information Infrastructure, A Nation of Opportunity: realizing the promise of the Information Superhighway (January 1996), 53. Back

2. The Central Computer and Telecommunications Agency (CCTA) is missing from this list. Back

3. The Department for Education and Employment did, however, tell the Committee that "current evidence does not suggest that the progressive introduction of new technology will result in fewer jobs overall in the UK." (p 584) Back

4. The DTI has also been involved in the Schools On-Line Project (p 7). Back

5. The report was prepared by McKinsey & Company, Inc. K-12 is the American kindergarten to Grade 12 school structure, covering pupils aged about 5-18. The American K-12 initiative is discussed in NCET, Highways for Learning: An Introduction to the Internet for Schools and Colleges (1995), pp 47-51. Back

6. The reports' recommendations are summarised in the Parliamentary Office of Science and Technology report on Information "Superhighways", p 89. Back

7. The latter have well-established channels of communication with Parliament, based on the office of the Parliamentary Clerk. Channels of communication between Parliament and the regulatory bodies, including OFTEL, are also needed. The problems associated with a lack of cross-departmental co-ordination are often brought into focus by the enquiries of this Committee since, unlike the Departmental Select Committees in the House of Commons, its work encompasses the activities of a wide range of Government Departments and Agencies.

In evidence to the Select Committee on Public Services on 2 July 1996 the Deputy Prime Minister suggested that "the whole ethos of public sector life [and] the overheads that all of us impose ... in terms of the name and the notion of public accountability ... [do] not actually deliver a great deal of public accountability in the vast majority of cases ... I personally think that that is an unnecessary constraint upon potentially wealth creating operations" (Q 410 of that Committee's evidence). Back

8. A recurring theme of OFTEL's evidence, which also referred to the likelihood of the market for advanced applications taking the form of "a mosaic of independent service providers and network operators" (p 30). Back

9. Cm 1303. Back

10. Competition and Choice: Telecommunications Policy for the 1990s (March 1991), Cm 1461, p 25. Back

11. Cm 1461, p 26. Back

12. Regulations restricting the services which can be offered by BT, Mercury and certain other PTOs. Back

13. Creating the Superhighways of the Future: Developing Broadband Communications in the UK, Cm 2734 (November 1994), 10. Back

14. As the Director General of OFTEL said in his evidence (Q 1048): "The most important thing all of us can do, including myself, is to stop arguing about the finer detail of BT's licence or when precisely a ban on national broadcasting might not be lifted and try and invoke some sense of confidence about how this technology can be deployed, how teachers can be equipped to use it, how the Health Service can be equipped to use it better and so on." Back

15. Creating the Superhighways of the Future, 13, 15. Back

16. Video Cassette Recorder. Back

17. We note the Government's announcement of their intention to publish a Green Paper, based on the work of CITU, in autumn 1996, "charting the way forward on the use of information technology across the civil service". (House of Commons Hansard, 11 July 1996, cols. 594-595). Back

18. Information Society Initiative factsheet, Information Society Issues in Brief. Back

19. The Lord Privy Seal thought that the ability to fill out one's income tax form electronically whilst discussing it with an official would be "of extraordinary interest" (Q 1054). Back

20. In recent evidence to the House of Commons National Heritage Committee (3rd Report, 1995-96) the Minister for Science and Technology spoke of the close co-operation between the DTI and the DNH (p 32) and the Secretary of State for National Heritage did not consider that all the information superhighway responsibilities should be gathered together in one department (p 39): The Structure and Remit of the Department of National Heritage (HC 399). Back

21. Information Society Initiative factsheet, INFO2000: financial support for model projects. Back

22. From the experience of the House of Lords in making arrangements for its own publications available in electronic form the Committee are aware that very tight electronic delivery standards for large publishing projects, for example, in the case of House of Lords Hansard, 9.30 am on the morning after the sitting day concerned, may only be guaranteed by paying a premium rate over a more relaxed delivery timetable. The latter seems to apply at present to the electronic publication of some Government documents. Back

23. AJ Kennedy, The Rough Guide to the Internet and World Wide Web (Penguin, November 1995), 287-292. On-line lists of cyber-cafés in the United Kingdom and world-wide are at Back

24. DTI Multimedia Industry Advisory Group Report (December 1995) p 73. Similar views were expressed in the Department of National Heritage's Public Library Review (1995), recommendation 3.1. Back

25. FreeNets, or Community Nets, are public or community information services. The Heads of Departments and Schools Committee of BAILER said that because of the pricing policies of telecommunication services these had been relatively quick to emerge in the USA. "Some State authorities, eg Maryland, have been particularly vigorous in promoting community access and these may provide a model for the UK." (p 572) Back

26. House of Commons Debates, 18 April 1996, cols. 938-940. Back

27. United States Advisory Council on the National Information Infrastructure, KickStart Initiative: Connecting America's Communities to the Information Superhighway (January 1996), 90-94, 102-103. Back

28. The scheme will only accept PCs, with a minimum specification of 386s. Back

29. See Appendix 8, paragraphs 69-71. Back

30. US Advisory Council on the National Information Infrastructure, A Nation of Opportunity: realizing the promise of the Information Superhighway (January 1996), 14. Back

31. See Appendix 8, paragraph 64. The North Carolina Information Highway is also used to deliver health care in prisons. Back

32. Science, vol. 271, 22 March 1996, 1675. Back

33. IN Purves, "The paperless general practice", British Medical Journal, vol. 312, 4 May 1996. Back

34. POST, Working at a Distance - UK Teleworking and its Implications (June 1995), 33-34. Back

35. Information Society Initiative factsheet, Teleworking and flexible working. Back


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