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Talk Talking "claptrap" on digital exclusion

9th November 2009

Claims by broadband supplier Talk Talk that the Government's proposed 50p per month levy on fixed phone lines fund the infrastructal investment needed to speed up the universal delivery of high speed broadband would force 100,000 households off the internet altogether have been dismissed as "total claptrap" by the CWU.
Responding to a number of extraordinary claims made by Talk Talk chief executive Charles Dunstone following last week's Business, Innovation and Skills (BIS) select committee meeting, the union has accused the company of twisting statistics in an attempt to wrong-foot the debate on digital Britain.
The vehemence of the company's opposition to the Government's plans to tackle digital exclusion via a seven-year £1 billion state-orchestrated investment to extend next generation network coverage to parts of the country unlikely to be served by the market alone, first became clear at the Parliamentary meeting last Monday.
But since then, Charles Dunstone - multi-millionaire founder of the Carphone Warehouse Group - has gone much further, launching a blistering attack on a "broadband tax" which he claimed would "force 100,000 homes to give up web" access altogether.
The tycoon went on to astonish seasoned industry observers by portraying his company's position as a noble defence of the poor and vulnerable against the self-interest of the rich.
"This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high-priced super-fast broadband services," he stated in a company press release positively dripping with enthusiasm for the redistribution of wealth.
"As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low-income homes will be forced to give up their broadband lines. This is wholly inconsistent with the Government's plans to tackle digital exclusion."
But Mr Dunstone didn't end there - claiming that the very existence of a Government programme to extend high speed broadband coverage to remote, rural and other unserved areas would actually slow down the process.
"Private investors will wait for public funds to be made available," he argued - apparently rejecting the notion that the absence of private investment in those areas to date had anything to do with anything so squalid as the profit motive…or rather the lack of it!
Responding to Mr Dunstone's claims, CWU deputy general secretary Andy Kerr dismissed Talk Talk's claims as "total claptrap that is clearly designed to distract one of the most important debates of our time" - namely how the UK can best provide equality of access to the benefits the Digital revolution can provide.
"First of all there's no evidence at all that to fund the next generation networks in rural areas would result in at least 100,000 homes being forced to give up their broadband lines," Andy began.
"Perhaps the richest point of all, however, is Mr Dunstone's claim that those standing to benefit from the Governments attempt to tackle digital exclusion are 'mostly richer rural households'. It's almost like saying that everyone who lives out in the shires is a member of the landed gentry - and that's self evidently not the case.
"The idea that everyone living in these areas is so wealthy that they don't deserve to be 'subsidised' is plain provocative. Mr Dunstone also totally misses the point that in reality there are broadband 'not spots' in urban areas due to their geographical distance from the local exchange which existing technology over copper wire cannot deliver.".
CWU assistant secretary Brian Healy rounded on Mr Dunstone's further claim that Government intervention isn't needed at all at present because in Britain "the private sector, unaided, got to 99 per cent (broadband) coverage" - albeit comparatively low speed - despite initial predictions that the networks "would only reach 60 per cent of the population".
"Mr Dunstone's being very clever with the terminology here - partly because in reality it was only achieved by technological advance - but also because it implies that, as part of the 'private sector', Talk Talk has been central to that achievement," said Brian.
"That isn't the case, because Talk Talk doesn't have a network of its own: BT and Virgin Media do, but you don't get Talk Talk customers using VM's network - they only go where BT goes. Even then they only claim to claim to cover 65 per cent of households. So, Mr Dunstone, what about the rest? Are they not equally deserving? Or are they just country toffs?
"In a very real sense Talk Talk are dependant on the back of the BT Network. That's what local loop unbundling is all about.
"Talk Talk aren't building a parallel network; they are building their customer base and business model on the back of the BT network - yet Mr Dunstone is implying that somehow they have been major players in getting to the 99 per cent broadband coverage.
"It begs the question, if you took away BT's reach, where would Talk Talk actually be? You can ask even further why the company isn't providing a service to the same degree as the reach of the BT network? I think potential customers should be told why not."
Brian added that, in the CWU's view, even the apparently reasonable-sounding assertion in Talk Talk's press release "public funds must be focussed on delivering essential basic services, not for premium services that few want, and only where the private sector has been unable to meet demand" - is equally misleading.
"They don't explain what the extra frills and the premium services are, which isn't surprising because funds raised by the levy have never been intended to support them anyway," concludes Brian. "It's simply to achieve the basic infrastructure for a universal service of 2Mbps broadband speed which Talk Talk claims to support, and which in the eyes of the public is becoming an essential service need.
"Talk Talk is saying it wants a 2mbps universal service, but is arguing against the means for this being delivered without proposing an alternative. In my book that's plain disingenuous - and whose interest is being served?"