The arrival of the GSM international standard ushered-in the transformation of the mobile phone. It changed from a bulky expensive item for the few into a slim low price item for everyone. This outcome was achieved through 20 years of dazzling innovation …making the 20^th anniversary of the original humble GSM mobile phone something to celebrate. In what way did GSM contribute to this success? Has GSM still got a future

At the time GSM was created there was a strong belief by many economists that competition between mobile network technologies was essential to promote innovation. This belief influenced US policy makers in the early 90’s to allow incompatible digital mobile networks to emerge in the USA. Europe put itself on a different path. GSM was imposed as an open international standard that Europe was willing to share with the rest of the world. For the best part of a decade GSM mobiles consistently outpaced innovation on the rival US mobile technologies…whether that innovation was measured in mobile size, battery consumption, choice of handset styles or price. More recently the ground-breaking Apple i-Phone appeared first as a GSM mobile.

So why did these free market economists get things so wrong?

As suppliers were unable to differentiate their mobiles in how they connected to networks – innovation was channelled in more productive directions. There were three broad phases of this fruitful innovation. The first was about shrinking the size of the mobile phone, its weight and battery life. The second was the “feature phone”. Products were differentiated by adding unrelated but very useful functions such as an MP3 player, FM radio, SatNav, better cameras and so on. Creative energy was also channelled into design and styling. The third phase has been the smartphone – where the phone functionality has been up-staged by a powerful mobile computing platform with a software Operating System able to host unlimited down-loads of useful software applications.

Some of the conditions that led to the success of GSM have survived but others have changed.

On the positive side GSM has left a legacy of cooperation between competitors for new common mobile network standards. This culture of cooperation has survived through all the birth pains of 3G to the current arrival of a common 4G (or LTE) technology.  So we can feel pleased that the world is still on track in this regard.

Where things have changed since 1992 is how quickly these new mobile networks get rolled-out. GSM services were rolled out in a highly co-ordinated way across Europe to the benefit of consumers and the entire industrial eco-system. The subsequent upgrade of GSM to incorporate GPRS was also rapidly supported across the world. But we now live in a considerably less coherent world. Things started to get more patchy when the GSM data up grade technology called EDGE came along. It clashed with the arrival of 3G networks. The roll-out of 4^th generation (LTE ) mobile networks has been even more disjointed.  This has led to a growing disconnect between what is inside our mobile phones and what a local mobile network happens to support.

Where compatibility may become more of an issue is with smartphone Operating Systems. The world is dividing into at least two camps…Apple and Android. Microsoft/Nokia would like to make it three worlds. Perhaps China may create a fourth. As consumers build up sizable personal investments in their software applications…they will become progressively less willing to jump between mobile software environments. The total openness of the GSM innovation environment is getting displaced by a more fragmented one that seems likely to be characterised by a growing degree of customer lock-in…with significant competition imbalances across these competing OS worlds

What of the future of GSM itself?

GSM continues to be a perfectly viable platform to delivery telephone calls and SMS messages. But GSM has been left far behind for delivering very high speed data. At this point of maturity the phasing out of GSM would normally be under consideration. Slimming down rather than phasing out is a much more likely outcome  for a number of reasons.

First, production of GSM mobiles is still on a rising curve in many emerging markets.  Second, as mentioned above, the roll out of all the later mobile technology networks across the world is now far less coherent and pervasive. This leaves GSM as the only technology that guarantees a mobile connection anywhere in the world and even within many countries…a sort of Glue for Service Mobility…perhaps the new meaning for the acronym GSM.

Third, is the growing impact of WiFi on mobiles and particularly for super-fast data speeds. This leads some to speculate whether GSM plus WiFi (plus mobile storage) may come to offer a better value package for low end smart phones. In this way GSM may continue to play its part in facilitating mobile innovation well into the future .

Blog Next Month… What if…Steve Job were running Nokia now…what would he do? To be posted on June 2nd

The Chancellor announced some major elements of a national infrastructure plan, identified the industries the Government has in mind to reinforce and new measures to intensify the flow of capital into industry and particularly small companies. Perhaps the most under reported item was the invitation to Michael Heseltine to review how Government spending departments and other public bodies can work better with the private sector on economic development…a response perhaps to the controversy  over the Department of Transport ordering new trains from Germany rather from the UK – the country that invented the train.

We now have two growth strategies – one from the Government and the other from the Opposition. That ought to be stimulating a lively national debate on which is best for the country…but it has all been a bit underwhelming so far…in the absence of the real thing… here is the debate that should be taking place:

To begin, it is easier to frame the debate from the Labour 5-point growth strategy:

1.      100,000 jobs for young people

2.      Bring forward investment projects like new school buildings

3.      Temporarily reverse the VAT rise – a £450 boost for families with children

4.      Cut VAT on home improvements to 5% for a year

5.      A tax break for every small firms which takes on extra workers

This is because, apart from their brevity, they are all classic demand side economic measures. They are (almost) entirely neutral as to their impact on the structure of the UK economy and industry base. There is no discrimination between how much of the stimulus finishes up in UK based industries with export prospect versus say finishing-up in China or Germany. The plan resonates with an almost Thatcherite purity that every £ of new UK economic activity is of equal merit…whether it is generated on the financial trading floor or a high technology exporting company. This has been the view of successive governments since 1980. The view rests on a basic belief that the UK supply side will always take care of itself much better without any government interference.

This view poses the biggest question of the past 30 years…if all a Government has to do is to create demand and the UK supply side will automatically come good…why have we seen such a steep decline of our manufacturing base over the past 30 years? How did we finish up with so much of what was left hard wired to Europe and totally incapable of switching its output to today’s’ growth markets of China, India, Russian and Brazil? (A product of over-reliance on inward investment). If we look at how much Financial Service, North Sea Oil and (cheap) Consumer Credit has contributed to economic growth over the past 30 years and accept that none of these contributions are likely to bounce back to where they once were…can we believe that a demand side stimulus  alone will power up entirely new local industries on the scale needed to plug the gap?  There is nothing in the Labour 5-point plan that addresses these issues.

In sharp contrast to the Labour growth plan the Government’s growth strategy is almost entirely supply-side centric with a much longer time-scale focus. The Chancellors Budget statement identifying the specific industries the Government has in mind to reinforce has drawn barbed comments from some quarters that this is going back to “picking winners”. This will be denied by the Government. But a rose by any other name is still a rose. All Governments (over the past 30 years) have made it a test of good economic governance not to target particular industries to support but to be industrially (and technologically) neutral. Which sectors or companies that survived and thrived were seen as absolutely a matter for the market.

So “the market” alone has been left to pick the supply-side winner for the UK…it did so decisively and chose financial services.  Is the disastrous  result of this market wisdom (that made the UK far more vulnerable to the global economic crisis that say Germany) a good enough reason for governments to have another go at picking (enough) winners?   And what are they doing differently to make it any more successful?

Then there are all the measures to direct money towards small companies and exporters. It had been another fundamental tenant that banks were better placed than governments to make judgements on which companies to lend money to and by implication, how many and how much. If the UK’s many small companies or exporters are finding banks reluctant to lend them money…is it just because their business proposals or prospects are just not up to much? If banks themselves are not left entirely free to lend money to where they will get the best return…will we not simply finish up with less competitive banks?

The review Michael Heseltine looks innocuous enough. But is this not just the route-in to finding a way of avoiding Government Departments giving major orders to build trains to a German rather than a UK based company. Whilst “Buying British” is illegal under EU rules most continental countries have found a very sophisticated legal way around these rules for some very large projects. If the report Michael Heseltine produces does take us down this path – is it a desirable outcome for more things bought with public money to be built in the UK…even though common sense would suggest that this will finish up costing tax payers more than simply buying the cheapest from anywhere in the world?

Finally, we come to the new infrastructure investment proposals that UK consumers will have to pay for in one way or another.  Here there is a choice of counter-arguments that could be run. For example the fact that India is enjoying enormously high economic growth and by all accounts has a shambolic infrastructure. Or infrastructure is best left to the market so that the infrastructure investment is targeted to where it will earn the most productive return? In practice there is less of a debate to be had with infrastructure as much will be driven anyway by the pressures of consumer expectations.

The above are all tough questions. They are political questions. They bring out clearly that growing the UK’s manufacturing base will come at a price. That price needs to be treated as an investment, which begs the next level of questions: where, how and how much?  The Government may well have hit a hole in one and got its growth plan absolutely right. I doubt it…even I can see some gaps.

The UK needs and deserves a better quality of public debate on strategies for growth than we are currently getting.

Current State of Play

Over the past decade Ofcom have diligently focused on promoting competition. But they have not stopped there. Together with the European Commission, they have systematically been raiding the nooks and crannies of mobile phone pricing structures that appear to be shielded from the full blast of competitive market forces. Today the mobile phone companies face a three pronged attack from the Regulators. The EU are back for another bite out of roaming charges and Ofcom has just won endorsement from the Competition Appeals Tribunal for a significant reduction of UK mobile termination rates. The long term aim of the Commission is to drive EU roaming charges down to the prevailing national rates. The Commission also want to impose cuts on the wholesale charges the mobile phone companies are allowed to charge the mobile phone retailers (like Tesco and Virgin) that have no mobile networks of their own.

What Ofcom and the Commission have not focused on has been innovation and investment in the mobile phone networks?  So what has been the resulting EU and UK record of network innovation over this past decade?

The roll out of 3G networks in Europe was certainly very half hearted (compared with say Japan), the fortunes of mobile TV was not helped by there being no EU wide spectrum for it, network operators have been totally blindsided by the smartphone impact on data traffic volumes and an effective EU wide efforts for the coordinated early roll out of the new LTE networks…non-existent.

Within the EU the UK has fallen from the leading edge of new network developments (the first to open 1800 MHz networks) to a country that does not even have any operational LTE networks deployed and three out of the four network operators currently do not have the necessary spectrum to viably do so. There has also been a failure to roll out 3G coverage to match GSM coverage and 3G coverage can be patchy even in semi-urban areas.

The regulatory balance sheet of the past 10 years can be summed up… fantastically low prices – pity the networks are way behind what they could have been. Network infrastructure competition has also been in decline. Ofcom has been winning many of the legal battles to sustain full network competition but losing the war under relentless economic pressures that are driving  infrastructure sharing and consolidation. It has not been an issue of competition versus investment but we have been on a path of not having enough of either.

That said the state of the mobile industry today is far from a disaster. I am not painting a picture of a burning deck. Ofcom have been doing the best job within the narrow remit that they have been given. The concern is about the future. My hypothesis is that mediocre network innovation performance in the EU and UK over the past 10 years  is a product of Governments giving their regulators powers and duties over only half the picture.   We may have scraped by over the recent past (just) but things look set to take a turn for the worse without radical modernisation of mobile regulation. It matters as smartphones will drive an exciting and expanding future mobile digital economy.

Draining the mobile phone companies’ Profit Pool

The problem with a singular regulatory focus on achieving falling mobile service prices over the next few years is that the Regulators are not the only cause of leakage from the mobile phone companies’ profit pool. There are at least three other serious assaults on the mobile phone company profits:

• The well respected Consultants Ovum recently claimed that in 2011 the mobile phone industry had lost 9% of their potential messaging revenues to the various Smartphone Internet enabled alternatives of Facebook, Twitter, MSN, Google Chat and Skype. This loss was 60% up on the loss in 2010. There appears to be an accelerating trend that could severely dent profits.
• The mobile is no longer just a telephone and messaging platform. The top end handset is also a computer, games machine, high definition camera and a massive mobile storage…all driving up the cost of handset subsidies to attract the best customers. The $98 billion Apple have in the bank is testimony to that.
• The tsunami of data that smart phones are generating is forcing the mobile phone companies to expand the number of base stations…the single most significant driver of operational costs. . The presence of WiFi (and storage) on smartphones will limit the ability of mobile operators to secure a mobility premium to cover those costs.

All this sits against a background where the market for new customers is saturated in Europe, the mobile phone companies have largely failed to break out of their bit-pipe role in the value chain and they are facing a serious level of new investment to roll out next generation networks.

The Next 10 Years

There is a claim by some economists that competition drives innovation. That claim is fatuous unless one couples with it what the barriers are to market entry and the risk/reward balance. Apple’s $98 billion cash pile was amassed behind a legal monopoly for exploiting the various ideas and designs Apple has patented. Europe has spent the past 30 years smashing mobile network monopolies and opening up the mobile phone service market to the full blast of competition. So that particular incentive to innovate does not exist for the mobile phone companies.

Some argue that these things are best left to market forces. Best for who?  There is growing competition from other parts of the world for the investment from multinational companies that currently own most of the important mobile network infrastructures in the UK and other EU Countries. In today’s global economy countries and contenents have to work much harder to attract investment flows and a regulatory framework wired to only drive an ever less attractive prospectus has something lacking. Market forces alone have never been successful in addressing large risky network infrastructure projects.

In the past (1G and GSM mobile networks) the rewards have been substantial enough to encourage the mobile companies to take the huge investment risks in next generation mobile infrastructures…but with some evidence (from what has happened to 3G networks) of diminished effectiveness in delivering both network coverage and capacity.

The question is whether investment enthusiasm on the scale needed will hold up 5 years from now…after all the concurrent drains on the mobile company profit pools have had their full impact?  Ofcom will never know whether they are sucking too much money out of the industry (via cuts in roaming or termination rates), got it just about right or not gone far enough unless they have a duty to be across the entire equation – the best national mobile infrastructure delivering the lowest consumer prices (rather than just the lowest prices). What we can say with certainty is that if the UK and Europe finds that its mobile networks are anemic, chronically congested and lacking advanced features in 5 years time …both Governments and Regulators will have absolutely no tools in the regulatory locker to do anything about it. Further there is at least a 5 year lead time to acquire the necessary new tools and use them to any measurable effect…time enough to put a country or Continent into the mobile digital economy slow lane. The “fail safe” option is not the “do nothing” option

Conclusions

My argument is that now is the time for a regulatory modernisation for the mobile radio industry.  The current half sighted regulatory structure is not good enough. The Government and/or independent Regulator needs to have the duties and powers across the entire picture…the missing pieces being innovation and investment.  Only when the Regulator has the full range of challenges of securing the best networks for the lowest consumer prices and not just the lowest prices can we be assured that they really are  securing the European and National interest.

The first element is public perception. It is worth reminding ourselves that in the very early days a huge amount of content was put onto the Internet by academics and others giving their time freely. The first big wave of commercialisation (dot.com era)  largely involved giving away stuff free of charge to gain visitor numbers and loyalty…with a vague idea that this loyalty could be turned to profit down the track. Both these early developments set public expectations regarding Internet content – creating a challenging environment for those coming later wanting to charge for content.

Whilst the Content Industry likes to portray Internet piracy as simple common theft (and there is no doubt a significant element of this) it is more complicated. A sub-culture exists on the Internet of Robin Hood technical anarchists dedicated to stealing content from the wicked King John and his robber barons (as they see the content industry) and giving it freely to the poor. The political character of this activity feeds off the wider public perception that expects much Internet content to be free. Some of the heavy handed content piracy regulations has been counter-productive in re-enforcing an image of an industry intent on ripping off consumers. It adds a very vocal layer to the public debate.

The second key element is the pace of innovation that has made the Internet so revolutionary. This has only been possible in the almost regulation free environment of the Internet. The US Government in particular has for many years resisted rushing in to regulate the new medium – fearing that this would kill-off the explosion of innovation taking place. In place of rules or regulations has only been peer pressure…the origin of some of the Internet activism.

The Internet is now experiencing its second bigger wave of commercial on-line activity much more in line with main stream business models.  This has led to a political fault line between those who want see the real world of regulation (and more) apply to this more commercially oriented Internet and those that want to preserve the original regulation free climate that has been so powerful in propelling rapid innovation.  It is across this fault line that the policy arguments Internet content piracy is now raging.

The third element is the quandary the Content Industry finds itself in. When content is digitalised and put anywhere on the Internet it becomes unduly vulnerability to unauthorised copying and distribution. Added to this “undue vulnerability” are legal jurisdictional complications as the pirated material may well be hosted in one jurisdiction, sign-posted in another and consumed in a third. They would like the Internet transformed into a more secure environment to sell their high value content. Many governments seem to agree and are no doubt influenced by the new jobs and economic activity that the content industry can potentially contribute.

The above analysis covers well known ground but it is worth summarising in support of 5 key principals that are suggested to guide the debate on Internet content piracy :

1. Education around Fair Content Terms

The war against Internet piracy will only be won when the majority of the public believe it to be wrong. Education is therefore far more important than new draconian laws.  The key to combating the “Robber Baron” image is for the content industry to ensure that legitimate content is conveniently and widely available at fair prices. This state of affairs needs to be demonstrably in place before governments get sucked into new regulations that otherwise turn out to be unenforceable due to wide public indifference or even hostility.

2. Containment rather than elimination

It would be sad indeed if Governments, under pressure from embattled content owners, were to drive the Internet to take on the character of a Johannesburg suburb, full of fortified gardens, armed guards and only for the rich and privileged.  There will always be some level of Content Piracy in the background. This is no different to the bricks and mortar economy where there is always some level of theft going on but it is contained to a manageable level…the price to be paid for the mass of law abiding consumers to be able to enjoy going to the shops. Proportionality is the keyword.

3. Use of the General Law rather than Internet specific law

New laws can have unintended consequences. For this reason it is far better to exhaust the potential of existing laws. In support of this is the fact that it is impossible to mass market pirated material to consumers without also tipping off law enforcement agencies what is going on. The recent arrests in the case of the Megaupload file sharing website amply demonstrates this point. The fact that Internet activists can file share in secret is not something that should be of great concern to regulators (or the content industry) since – by definition – the potential financial loss to the Content owners is correspondingly miniscule.

4. Internet Regulation should not create conflict of functions.

The job of the police and courts is to deal with law breaking. The job of an ISP is to provide public access connections to the Internet. The job of a search engine company is to provide navigation around the Internet. The best outcome for the Internet is for every party to be allowed to reach for excellence in what they do.

This is where the Digital Economy Act got it so wrong in forcing one industry  (the ISP’s) to distort their normal business practice to suit the Contents Industry lobby. For example forcing ISP’s to write threatening letters to their own customers on behalf of another industry seems as disproportionate as it is wrong in principal.  If there are actions to be taken by ISP’s or Search Engine companies regarding Internet piracy  it should come as a result of a case by case Court order from an independent judiciary.

5. Balance and Diversity

It is inevitable that the future life and soul of the Internet will be shaped by innovation, market forces and regulation. It is essential to maintain the right balance between these three makers and shapers of the future Internet.

The regulator at the time (Oftel) recognised this original imbalance. Orange and T-Mobile were not only given much more spectrum at 1.8GHz than Vodafone and O2 had at 900 MHz but also enjoyed better mobile phone termination rates as a financial compensation to pay for the additional base stations needed to provide comparable national coverage. The denser base station network also significantly improved indoor coverage although not entirely closing the gap with the 900 MHz networks. The result was that the networks were broadly comparable and led to a very competitive (and successful) UK mobile phone market.

Ofcom’s aim has been to provide a comparable “assist” to H3G but it has been compromised by Ofcom’s own conflicting policy objectives. On the one hand Ofcom set the UK spectrum policy on a road to a fully hands-off approach that left the market to sort out who had which spectrum and what it was used for. At the same time Ofcom went in the opposite direction of micro-managing the spectrum to assist H3G. The plan was to force Vodafone and O2 to give 10MHz of spectrum at 900 MHz to H3G in exchange for Vodafone and O2 being allowed to do what they wanted with their 900 MHz spectrum (rather than just limited to providing GSM services). Vodafone and O2 refused this less than tempting offer and dug-in.

At this point Lord Carter arrived on the scene as the responsible Minister. He saw the potential for a political fix to help everyone dig themselves out of the impasse. He almost pulled it off. It involved Vodafone and O2 giving up 5 MHz of spectrum (rather than 10) and this would be given to H3G. All the affected parties signaled their willingness to compromise and Ofcom accepted stepping back to allow Lord Carter to broker a deal. Lord Carter brought in a consultant Kip Meek as a spectrum broker to sort out the details.

At this juncture H3G did something that turned out to be less than helpful. They came to a side understanding with T-Mobile to swap the 900MHz spectrum they would acquire in exchange for T-Mobile giving them 5 MHz of their spectrum at 1800 MHz. This was fully in line with Ofcom’s vision of spectrum trading…so why not? The “why not” was the understandable reaction of Orange. Where was their 5MHz of 900 MHz spectrum to keep competitive parity with T-Mobile?

The numbers no longer added up. The deal fell apart. So instead Kip explored an alternative approach to partially re-level the spectrum playing field over a long period. It involved a very elaborate idea of spectrum floors and caps applying to any new spectrum. Then the merger announcement between Orange and T-Mobile completely scuppered this initiative…the uncertainty made it impossible to find agreement. This left a complex situation considerably more complex but did not solve the basic issue for H3G.

The Government quietly buried most of the superfluous complexity and managed to un-couple liberalising the use of spectrum from the competition policy elements. The latter was pushed back to Ofcom. They were asked to carry out a competition assessment and deal with any competition issues within the rules for the next spectrum auction.  The can had just been kicked down the road.

Ofcom produced their competition assessment and policy proposals in March 2011. H3G were to be given an inside track to 5 MHz of the new 800 MHz digital dividend spectrum and there would be some limitations placed on the two 900MHz mobile network operators on what they could bid for at 800 MHz.  H3G were upset that the redress was only 5MHz at 800 MHz since it is widely known in technical circles that the most likely technology to use in this band (the new LTE technology) needed at least 10MHz to deliver any decent data rates. This issue was compounded by Ofcom’s also trying to assist Everything Everywhere (as well as H3G). This severely tilted the balance of probability so that at least one player would emerge from the auction with only 5 MHz of spectrum at 800 MHz…which would have been a very poor technical use of such valuable spectrum.

The other major point of debate coming out of the March Consultation document was the coverage obligation. The 800 MHz spectrum was likely to be the last big opportunity for a decade to push out broadband mobile services to rural areas but this would not be delivered by the market alone – a coverage obligation was essential. Ofcom did not rise sufficiently to the challenge of this unique opportunity and it led to a House of Commons motion and Select Committee calling on Ofcom to impose a much more ambitious coverage target.

A third less well reported issue was the potential liberalisation of one of the 2.6GHz channels for low powered in building mobile broadband coverage providing super-fast mobile data speeds. Here Ofcom were criticised by the IET amongst others for being too cautious.

Against this background do the new Ofcom proposals resolve all these issues?

My assessment of the revised proposals is that Ofcom has cracked the problem. The proposals look extremely robust from the direction of judicial review…fair and proportionate…with even this extra round of consultation thrown-in for good measure. Furthermore the policy looks and feels right within the numerous constraints. They deserve our praise for creating a basis that is as good as it is going to get for delivering the next generation of advanced UK mobile broadband networks.

The “break-out” of the conundrum Ofcom found was to uncouple the way they treated H3G from Everything Everywhere- even though they both lacked of spectrum below 1GHz. Ofcom reasoned that the combination of more spectrum Everything Everywhere hold at 1800MHz and their bigger number of base stations was actually providing much of the benefit that spectrum under 1 GHz would deliver. In addition only Everything Everywhere is positioned to launch LTE services within the spectrum it has already got. All the other operators need to acquire spectrum at the auction.

What Ofcom could have added is that this endowment of spectrum and base stations was a result of a regulatory favour given to Orange and T Mobile by Oftel a decade earlier. One of the reasons Orange got caught into this second round of regulatory favours was to maintain parity with T-Mobile. But the merger by the two companies themselves as well as H3G dropping their swap intentions has removed this justification. On top of this Everything Everywhere are now the largest mobile network operator in the UK, have therefore the best scale economies, great brands and a better developed infrastructure. Under these changed circumstances it would have been quite unfair to have given Everything Everywhere a further regulatory favour at the expense of their two smaller rivals Vodafone and O2.

The rural coverage issue now appears to be heading in the right direction…the direction being 98% coverage. Ofcom envisage linking the 800MHz  coverage obligation with the Government’s £150m mobile infrastructure programme for covering mobile Not Spots. This makes perfect sense.

Ofcom have also come a long way towards supporting innovation through being minded to allow one 2.4 GHz channel for a revolutionary inside-out approach to high density networks able to deliver mobile data speeds in excess of 100 Mb/s. Ofcom are signalling some vestiges of hesitation and would no doubt be encouraged by a wave of support in response to this consultation document. That is unlikely to come. It is in the nature of these sorts of innovations that the vested interests are on hand to oppose it but the beneficiaries will only emerge as the market evolves towards Femto cells. It is a time for Ofcom to follow their instincts…that is the nature of innovation.

Finally, there is a refreshing change of tone in this new consultation document. Five years ago Ofcom embraced a free market ideology in spectrum management that took them almost onto a different planet from the rest of the UK mobile industry. Some of the friction over the past few years between Ofcom and the industry can be put down to the resulting dialogue of the deaf. It is abundantly clear from the significant movement since March that Ofcom is under a spectrum management leadership that is both thoughtful and much better tuned into the real world and is also prepared to listen to the industry.  This bodes well for the future relations with the industry.

There will no doubt be worries by the Government of yet another judicial review delaying the spectrum auction. If this happens Ofcom’ careful work since March have now put them clearly on the right side of the arguments… so any further recourse to the Courts will only be an irritation and not a show-stopper. One might also question the judgement of any company who chose to upset the government now…just when a new Communications Act is coming fast down the track. It is time for the industry to draw a line under this long running saga and move onto a new far more positive and exciting agenda…rolling out the next generation of mobile broadband networks…the UK has a lot of catching up to do.

The headlines over 2011 map out the big events as the mighty Nokia stumbles… blind sided by the rise of Apple. Google takes over the venerable father of the mobile hand portable…Motorola’s mobile phone division. Android trumps Nokia’s Operating System Symbian. Mobile Network Operators start to lose the battle for loyalty in the home as their customers connect their Smartphones to WiFi for down-loading data. The mobile messaging space gets taken over by the Internet staples of  E-Mail, Instant Messaging, Facebook and Twitter…leaving it open to question just how much longer SMS will last…at least in Western markets.

This would not be any cause for concern if this transformation of the industry was synonymous with everything getting better. But is this the case?  What has most concerned me as a consumer (aside from the complexity of it all) is how the telephone function is getting marginalised in the design of the new smartphones. I suspect it is cultural and that the folk who are now designing mobile smartphones are computer and not radio engineers. How else is it possible to explain how the Apple gaff happened – where a consumer holding their mobile in a certain way killed the aerial performance. But don’t imagine that the other new age mobile manufacturers are doing a whole lot better. HTC for example are well recognised as a smartphone design leader…but the one I purchased in 2011…whilst outstanding for games…was a very poorly performing telephone. I had to hold the mobile horizontally to get the mobile phone to receive enough signal where I live…fine if I was making telephone calls lying on my back.

Another step back is the lack of standardisation of how to use a mobile telephone on a smartphone. Perhaps I am a slow learner but I now budget losing the first few incoming calls due to the learning time needed to work out how to receive a call on a new Smartphone from a different supplier (I am now on my fourth smartphone). My worst experience was with a Nokia smartphone where I lost count of the number of incoming calls aborted…the problem being that as I reached into my pocket to pull out the mobile I incidentally touched the screen in the wrong place. No doubt patent disputes may be the source of all these innovative ways to confuse the consumer for something so basic…One might also ask whatever happened to fair licensing terms for Intellectual Property as Court  injunctions flying around seem to be a feature of this new mobile world order?

The next great leap backwards for the mobile telephone is battery drain. My first mobile phone was a Technophone M1 in 1986 that promised 8 hours of standby time. There followed the great leap forward to the norm of some 300 hours of standby time by 2006. Since the arrival of the smartphone we have had the great leap backwards and it is no exaggeration to mention 8 hours again for those watching all that video on great smartphone screens…one of the various ways smartphones gobble up battery energy…leaving nothing in reserve for the telephone.  One of my sons has the latest Apple Smartphone and must lose his share of incoming telephone calls as he switches off his mobile to conserve what little he has left of his mobile battery energy by the end of the working (or playing) day.

We can be optimistic that technology advance will gradually claw back the standby time losses. We need to be less optimistic that the mobile radio performance will be improving anytime soon. All the warning lights are flashing that mobile antenna performance is set to get a whole lot worse  as the manufactures make more and more compromises to pack-in more and more antennas into tomorrow’s mobile phones (to embrace all the new frequency spectrum coming on stream).

Now here is an amazing fact…there is not one single mobile phone on the market today that has any data in the pages of specification marketing claims that says how well their smartphone performs… as a telephone…not even the receiver sensitivity gets a mention. This is where the fight-back to get a decently performing telephone functions on tomorrow’s smartphones needs to begin…good consumer information.

Perhaps the regulators need to nudge the mobile phone industry to publish data relevant to telephone performance such as receiver sensitivity. It would be a great spur to innovation and good design if manufacturers were also required to publish the best and worse antenna gain for each band.   Even better would be for the industry to agree some simple common figure of merit to reflect overall telephone performance…a navigational beacon for the humble mobile telephone function that is currently losing its way as progress is now driven by the new IT masters of the mobile universe…

In contrast to the branding success of a university degree, vocational qualifications have been a “branding” disaster.  This is not to impugn that vocational courses are not equipping young people for skilled jobs or to suggest any lack effort by the colleges that deliver them. It is just that the status of the resulting qualifications is seen by many young people and the general public at large as seriously inferior to a university degree. This gets fed back to the playground. The media amplify the differences with annual pictures of young people throwing their mortar boards in the air on graduation day and total silence for those getting their final vocational qualifications. As a result society loses the means to award respect to those who attain the most advanced vocational qualifications. With it goes an opportunity to communicate an inspiring message of hope to the 50% or so who will never go to University that the appropriate skills training will open-up interesting (and better paid) jobs for them. We are a society that has come to seriously undervalue our master craftsmen (and women) and skilled technicians. This needs to be turned around.

Why do vocational qualifications languish in such low status beyond this crowding out effect of University degrees? First there have been no concerted efforts by the Governments, Colleges and industry to promote the brand image of vocational qualifications. If you want to build a brand it takes a well honed and sustained communications campaign. When NVQ’s were launched this was not done.

Sitting under this lack of marketing effort is a product flaw (from a marketing perspective) in the NVQ structure – it is an undifferentiated qualification product at its highest level. With a University degree there are two sorts of differentiation widely recognised by young people, employers and the general public. The first is the class of the degree and the second is the University it comes from.  What is the vocational equivalent to a first from Oxford? Who are the crème de la crème of the NVQ4′s that an employer will pay a wages premium in order to get hold of? Where is the transparency that allows the wider public to distinguish between those that just scraped through and those that excel in a particular skill?

The result is that vocational qualifications are widely perceived as a booby prize for those that fail to make the grade along the purely academic route instead of their rightful place of a valued brand and status in their own right.

This is the worst time to be suggesting that public money is poured into a re-branding campaign to elevate the status of vocational qualifications. At it happens this would be a waste of money anyway until something is first done to create some differentiation for the vocational qualifications themselves. Differentiation is a key to develop a perceived value of a brand.

There is a job to be done by the government and colleges to add a layer (or two) of differentiation.  For the sake of example let us assume two layers and label them the silver award and gold award. This has to be standardised across all vocational qualifications. This makes a communications campaign to promote the brand value to the general public much more cost effective. Second, within each skill area the colleges in partnership with their respective industries have to decide what a silver and gold award signifies by way of superior achievement and this must correlate with a superior challenge and effort. This is essential to secure status of acquiring them. Industry must be encouraged to pay higher starting wages for those getting the silver and gold awards. Nothing will be more effective in securing positive feedback to the playgrounds and parents.

If the UK is to be successful in rebalancing its economy industry will need many more skilled workers as well as graduates. In addition a well structured and well promoted vocational educational qualification framework will add a whole new horizon of “perceived” opportunity and chances to earn respect for the 50% of young people not cut out to scale academic mountains. Society has to advance to the point where it is able to recognised excellence in all walks of life.

It is good so see that the Government has now recognised the importance of vocational training . However my point is that this is more than a policy and education challenge…it is a marketting “branding” challenge. It is about identifying excellence within what already exists, building brand value around it and then a sustained communication to promote the brand to the benefit of all who are associated with it. I am not sure the Government is building into their strategy such a professional marketting approach to brand development and without this…the old cultural attitudes will prevail.

The European Commission has now added insult to injury this year by introducing an amendment to Directive 2006/116/EC on the term of Protection of Copyright that extended the 50 years for musical copyright to a Biblical 70 years…a whole life-time of reward… whilst still leaving the technical inventor losing their protection after a mere 20 years!  Why this difference in time period of protection?  There is clearly a case to answer.

Relatively few people understand Intellectual Property Rights but the main underpinning principle is actually quite simple…it is called “fairness”.

The time limit determines when a creative outcome changes from the exclusive property of the creator to become public property that we all own and can freely use. It a balance between fair reward and allowing ideas to become a part of the common heritage of mankind.

On this measure it cannot be right that the man struggling in his bedroom with his guitar to create a winning song should enjoy 70 years of reward for his efforts and the man struggling in his garden shed with a technical invention gets only 20 years. The difference is obscene.

Either the general public are thieves of time…stealing from patent owners what should be rightfully theirs for another 50 years or Copyright owners are thieves of time stealing from us what should be freely ours after 20 years.

Some may argue that this difference of time periods is justified. So the argument runs… it is far more important to society that technical ideas are freed up relatively early to allow others to copy and improve upon them whereas songs are a more frivolous product and there is less impact on society if locked away for longer.

There are three arguments against this line of defense of the status quo. First, the creative industries are now just as important as say the vacuum cleaner industry and creative people could do a lot with say the Beetle songs in all manner of creative products such as cartoons… just as the rivals to Dyson could use cyclonic separation in their new vacuum cleaner products. Second if it is that important to society to free up technical ideas after 20 years this could be achieved by moderating the licensing regulations after say 20 years to free up use but still ensured a fair royalty is paid to technical inventors (to match that of musicians). The third argument is that this should just be about fairness…however inconvenient to Dyson’s industrial rivals.

There is also a strong strategic reason for the Western economies for extending the period of patent protection. The world trade organisation treaty has pitched the US and European relatively high labour costs against much lower labour costs of China, India and Brazil. Off-setting this has been an historic hegemony of advanced technologies coming out of the Western laboratories and companies. This has led to a complacent assumption that the West will specialise in the high value added end of the market and the emerging economies will specialise in the  low value manufacturing end of the market. But China and India in particular are advancing at spectacular speed up the advanced technology learning curve backed up by huge numbers of young talented graduates coming out of their Universities. It is much quicker to catch-up in the development of advanced technologies where the aiming point is well identified (from seeing what the West is currently producing) than to blaze a trail into the much more uncertain future through R&D programmes. The solar PV industry is a compelling example of this. Five years ago Germany was a clear global market leader in Solar PV technology. Today China is the global market leader. Europe’s R&D base is simply not dynamic enough or resourced enough to keep the European technology base ahead of the imitators…it is likely to run out of road over the next 7-10 years. Extending the period of patent protection will help to redress this imbalance between the speed of catching-up (imitating or even copying) with the much longer speed to breaking quite new ground.

The case to align the time periods of protection on moral grounds is overwhelming. This then leads onto a much more difficult issue as to whether copyright protection should be brought back to 20 years or patent protection extended to 70 years. If alignment is to ever be achieved in the real world it is likely to be based on a compromise figure somewhere between these two extremes. My straw man would  40 years as a sensible half way compromise with some slightly different status in respect of licensing the last 20 years to free up usage but still providing a fair reward for the creators.

Any idea of cutting back the period of protection for copyright is likely to outrage the powerful copyright community…but this should not be a reason for Governments to shy away from reform. The music industry are far from winning the general public over to the moral case for strengthening enforcement of copyright over the Internet. There is a widely held view that music copyright owners have been ripping off the public for years with over priced music CD’s and foot dragging (until relatively recently) in putting in place reasonably priced music down-loading sites on the Internet. In this context extending the Copyright for music from 50 to 70 years looks like an ugly case of featherbedding and probably is. That said, if fairness is the driving force, a distinction can (and should) be made in any future reform between the copyright of existing works and new works yet to come under copyright… with any shorter period of protection only applying to new works..

There  are many things wrong with Intellectual Property Right laws ranging from the ambushes regularly made on hardworking technology companies by patent trolls to the current over the top behaviour of the mobile phone manufacturers. There is a case for comprehensive reform. The piece meal approach to Intellectual Property Rights by the European Union needs to give way to a genuine broad ranging reform of Intellectual Property Rights that accords comparable status between our technical heroes and song writing heroes. There should be one period of protection for all Intellectual Property Rights…we should be eliminating the current discrimination not exacerbating it…and also safeguarding the hard earned value of our technical innovation base.

The use of Facebook and Twitter by individuals to try to gather and mobilise a mob is not in doubt. However what has subsequently been demonstrated is the legal audit trail that these technologies leave behind that has been useful for the authorities pursuing successful prosecutions later. The fact that there have now been successful prosecutions (and exemplary prison sentences)  is likely to be far more effective in limiting future law breakers use of Facebook and Twitter than any technical measure. This has probably already done a large part of the job of containing the misuse of these new technologies.

There remains the issue of how all the messaging technology, including that venerable old messaging technology SMS, were used in real time to organise the hit and run tactics of the mobs. The police found this mob mobility particularly difficult to cope with. In a battlefield this tactical use of communications by the enemy would be dealt with by jamming radio signals in the vicinity. In civil terms it equates to the local mobile base stations being switched off during riots. Critics have argued that this is disproportionate as those innocent people in the affected areas are losing their means of communicating any difficulties that they might be in.  Certainly any loss of 999 voice call access from mobile phones would be very serious and could lay the authorities open to litigation if it were ever proved that somebody died as a result of those nearby being unable to call for medical assistance.

However blocking the networks is not the only technical measure that could be considered. Another possibility would be to get ISP’s  in riot areas to put a 15 minute delay in handling messaging services (which are  not designed as real-time services anyway). This would dull the tactical advantage of mobs to relocate in real time but leave everyone else free to use messaging for legitimate purposes.  Such a measure would be far more proportionate and worth study.

The Blackberry Messenger use by gangs for organising riots is a different issue. The dangers of encryption for lawbreaking is the inability of police intelligence to  have any idea of what crimes are in planning.   The use by the public of very high grade encryption of messages was debated in 1999 and a report published by the Labour Government called “Encryption and Law Enforcement”.  The Blair Government had the difficult task of balancing the risks to law enforcement with the needs of business and ecommerce. It all pre-dates electronic social networking and it is not easy to see how this liberalised encryption policy can now be reversed.

This leaves the role of television to be examined. What has been remarkable is the complete absence of any scrutiny of the “old” technology (television) in the public debate on the role of technology in the English Riots. Yet undoubtedly it was television that led to the copycat riots in other parts of London and in English cities hundreds of miles away. Arguably television news reporting of the initial riots crossed a line between reporting past events and driving future events. Put another way TV turned a £10m local disaster in Tottenham to a £200m disaster across England as a whole and strained police resources to almost breaking point.

There was one particular news clip sequence coming out of the Tottenham riots that warrants discussion. The images appeared to show a number of people looting a high street shop in relaxed almost party atmosphere whilst a line of riot police simply looked on. The juxtaposition of the animated looters and a passive line of police sent out a very simple message that everyone got instantly…rioting and looting was now OK…you are free to damage and steal on the high street…and you will get away with it.  (It was also the clip sequence that probably did more damage to the public confidence in the police than all the other video news footage put together).

This news clip raises a number of questions: was the news clip itself overly inflammatory, did the endless repetition of the clip exaggerate the situation and did the lack of juxtaposition of video footage showing the police more actively arresting people at other locations lead to an unbalanced picture being presented?  The answer is probably yes to all of these questions to a greater or lesser extent.

What is now evident is that the old media (TV) role in large scale public disturbances is to propagate “the trigger” over large distances. It is akin to the role of a high wind in turning small local forest fires into major conflagrations affecting thousands of square miles. The same mechanism was evident in the Arab Spring in transmitting street protests from Tunisia to Egypt.

This leads onto the question of what can (or should) be done about it? Pleas for more responsible TV journalism is a waste of time. That genie escaped the bottle decades ago. We now have competitive 24 hour news channels fighting to gain our attention minute by minute.  Their mission is to make things more interesting and capture our imaginations. It is not a natural thing to ask highly motivated professional people to do a less effective job.

This brings us to highly sensitive issue of censorship. Free speech and a free society requires a robust defence against censorship. It is why most people have  instinctively shied away from challenging the role TV has played in fanning the public disorders – the cure looks more unpalatable than the disease.  We are left only with a hope that Broadcasters might make more of an effort to balance their real time reporting…but we should not hold our breath.

Technology advances seldom deliver a 100% up-side. Trying to get the balance between discouraging the darker uses and maximising the public benefit can be every bit as complex as the technologies themselves.  The up-side of Facebook and Twitter was well demonstrated after the riots in the coming together of communities in the clearing-up after the riots. Television also played a positive role. Nothing could demonstrate the enormous constructive power of a 30 second video clip on national TV news than the words of Tariq Jahan broadcast from outside his home the night his son and two friends were murdered. It stopped an appalling situation of criminality from degenerating into a full scale race riot.

Prof Jones  claimed an ‘over-rigid’ application of BBC editorial guidelines on impartiality has led to the BBC giving equal prominence to fringe scientific option and mainstream science opinion. The safety of the MMR vaccine and GM crops were given as examples of the damage that can be caused with this approach by the media.

Yet we know that at least some the public empathy with fringe opinions stem from a fear of the unknown and this is fuelled by some spectacular failures by scientists to get things right in the past. I am old enough to remember films of the new materials marvel called asbestos. I have lived in the time when DDT was going to eradicate malaria and the District Nurse was showering DDT powder on the hair of local children found with lice. Then there was the thalidomide tragedy.

Moving from particular examples to whole countries getting it wrong I was truly shocked when the collapse of communism revealed how the Communist Block, with its total control of the media, had successfully hid the most environmentally cavalier way in which science based industries had been operating – with the full support of the State mainstream scientific opinion.  In sharp contrast “the fringe opinions” in the West, led by authors like Rachel Carson, provoked huge public debate and led to tough environmental regulations…which gave the West more progress at a fraction of the environmental damage. Had Dr Jones had his way Rachel Carson’s book Silent Spring would not have even got a mention in a BBC book review?

Prof Jones warns the BBC to take special care distinguishing well-established fact from opinion, and communicating this distinction to audiences. This is disingenuous. There are considerably more things we don’t know than know when massively complex scientific applications are moved at speed from the laboratory into wide deployment in a massively more complex inter-connected world. Progress in the application of science is always a calculated risk that works on the presumption that something is safe if nothing unsafe has (yet) been uncovered.

This is not to argue for the world of applied science to operate in any other way. We simply could not reap the benefits of science if the burden of proof were to be reversed. Yet its implications are profound on the bond of trust between the public and the scientific community. This is where Prof Jones is wrong to present this as an issue of scientific facts (the things we know). What the public fear (with some justification) are the all the things scientists do not know (the unknown unknowns). There may be examples of some fringe group or other coming out with complete nonsense in the face of rock solid scientific facts. These are not the cases that sway the general public. Where the public have the potential to become alarmed (and susceptible to media presentation) nearly always fall into a grey area where the real nature of the science debate comes down to risk and benefit. The debates that get particularly heated are usually where consumers are being given no choice to opt out.

If the scientific world is to carry the public along this remarkable (accelerating) journey of applying science then a public platform has to be given to the maverick scientists and the fringe lobby groups. Each plays a different but essential role. The maverick scientist is there to shake up complacent assumptions by mainstream science. The fringe groups represent a political backlash to the applications of science. These applications of science are often driven by global multinational giants who fund a high percentage of applied science and employ many of the scientists who influence mainstream science opinion.  Under these circumstances should the BBC really be giving less prominance to “fringe opion”?

There has to be the public debates where scientists step up and argue their case. It may not be a debate of equals in terms of academic qualifications and scientific experience. However it is a debate of equal stake holders…those driving the science and those being asked to accept the results being applied to their everyday lives.

Where the BBC have an essential but difficult job to do in applied science is helping the public understand “risk” and creating a sense of proportion between risks of doing things or not doing them and across different risks. It is also helping scientists step out of their jargon filled world to put their case in ways understandable to the public. This is not about science it is about the politics of science? Good politics in open societies is about having the debates and not suppressing them.

It is interesting how the BBC reported on Prof Jones’ recommendations and pointedly did not seek the balancing views of any maverick scientists?   The science itself may be complex…perhaps at time too much so for journalists…but the fundamental issues of free speech, open debate, impartiality and balance are well within the BBC skill sets. The BBC needs to avoid being seduced by scientists, no matter how eminent, trying to make life for themselves more comfortable.