OECD HQ, Paris
Ladies and Gentlemen, good morning, it is a great pleasure for me to be here at today’s OECD conference on the Internet.
There are four main themes I wanted to touch on today: privacy; piracy; child safety online; and the free and open internet.
But before I touch on the specific themes, I wanted to say a little about the infrastructure of the internet and how it is developing in the UK, and about internet policy more generally.
In the UK, 99.6% of population can access Broadband and over 70% actually use it. Over 4m household have access to super-fast Broadband at over 50Mbps. Nine out of ten phones in the UK are now smartphones.
In the UK, according to a recent McKinsey study published during the recent e-G8 Conference, the Internet accounts for about 6% of our GDP, well above the average.
That figure is growing fast. For instance, the Internet contributed almost a quarter of our GDP growth between 2004 and 2009. British consumers are increasingly moving online to buy goods and services - in fact, we come first in the EU for goods and services purchased online.
And that trend will only grow as more and more people adopt tablet and smart phones, making it even easier for consumers to buy online and on the move.
So we’re pursuing ambitious plans to bring our infrastructure up to speed for a new digital age. We will ensure that 90% of the population have superfast broadband links by 2015 to greater than 24Mbps, and that there is universal coverage. The market will deliver the majority of this, but we have set aside more than £500 million to assist rollout.
It is also critical to the future of broadband that we are able to auction new spectrum at the beginning of next year, and we intend to ensure that this happens. The process has been delayed for far too long and it is now critical that we progress.
Regulation and Broadband
The growth of the internet, and increasing ease of access, is the starting point for the issues that we are debating at the moment.
At the forefront of this debate is what we call “net neutrality”. What we might call the terms and conditions for the internet. The Internet’s huge potential will be seriously threatened if access conditions differ from one country to the other.
As I have previously said, my view is straightforward. Users should be able to access any legal content or service at the speed at which they have contracted with their ISP. Content providers and applications should be able to reach any consumer. ISPs should not be able to discriminate unfairly against services or users.
That means no blocking or discriminatory degradation of services or applications for commercial reasons.
But it doesn’t mean we should place restrictions on the kinds of business models the market can develop and prevent the evolution of different kinds of packages and services which consumers may benefit from.
The market should be left free to develop and innovate and find out what is best for consumers: but if it develops in a manner which harms consumer interests, competition or innovation, then regulators must have the appropriate powers to intervene.
In the Netherlands as part of their Implementation of the Electronic Communications Review they have introduced an amendment to their telecoms act which effectively bans the blocking of legal content and services. This has come about in large part because of the blocking of VoIP and free messaging services which compete with those offered by operators.
While I understand the particular circumstances in the Netherlands, I do not believe that it is necessary to legislate in the UK. Legislation should only be used as a last resort in any market and especially in a market which has flourished beyond any of our expectations, thanks in large part to the lack of Government interference and regulatory restraint. Legislation can have unintended consequences.
Self regulation must be our first option, and that is why in the UK we have begun work on an industry wide agreement on a set of principles on traffic management and non discrimination.
I believe that the willingness of the market to self regulate, improved transparency and switching and a competitive market will mean that we can avoid burdensome regulation that would only do harm to the Internet economy.
So what about the rights of the user?
Well, as I’ve said, consumers essentially have two big concerns. First, they worry about data protection - whether their credit card details are safe, or whether their information is being shared with other organisations.
Second, they worry about privacy - the fear that information about them may be used in ways that they have not consented to.
We have worked closely with the Information Commissioner’s Office in the UK to ensure they have the necessary powers to fine companies for privacy breaches: to conduct e-privacy audits where appropriate: and to identify operators who withhold their number, or hide their e-mail ID in order to make cold calls and send spam e-mails.
We now need to make sure that we develop appropriate solutions to the challenges posed by the implementation of EU law on Privacy - and there are some real challenges. In the UK we have a clear framework for tackling cookies and are working with Browser manufacturers to see if these can be enhanced to meet the requirements of EU law.
We all know that we live in an increasingly interconnected world, in which solutions are not made by nation states in isolation. The issue of online privacy requires international joint efforts. I was very taken with what Commissioner Kroes said in Brussels earlier this month, about an international do not track initiative based around a universal technology. This is something we are already starting to explore in the UK in our work on cookies, something that could meet that gold-standard criteria of improved but unobtrusive information and control over personal data.
So again, regulation is about applying appropriate checks and balances to ensure fairness without compromising people’s right to choose.
Let me turn to internet safety and the importance of protecting young people from pornography and age restricted content.
I think this takes us into an area where we do need more assertive intervention on the part of Governments and businesses.
Where children are being exploited, it’s a hollow argument to hold up our hands and say the Internet cannot be policed.
That’s why it’s encouraging that we are seeing some effective partnerships forged, and some excellent work undertaken between Government and business in this area.
I was pleased to hear the recent announcement in the UK by companies like BT, Talk Talk, Sky and Virgin Media on the progress they are making to develop and sign up to a code of practice on parental controls.
Clearly, more needs to be done though. We need some clear commitments around independent review, and how reports which highlight inappropriate content are handled.
Self-regulation by itself is not enough: we must have independent review as well.
Another area we need to focus on is copyright and piracy: Subjects that naturally arouse strong opinions because they are of such central importance to the creative industries.
We need a regulatory structure that’s effective and fair - both for consumers and for industry.
In the UK, that’s why we asked Professor Hargreaves to look at intellectual property again to ensure it is fit for purpose.
He has come up with some interesting ideas, including a Digital Copyright Exchange. These are suggestions we will continue to think long and hard about.
I’d add that the implementation of the Digital Economy Act gives us a chance to make a fresh start, and produce a plan and timetable we can stick to.
Business needs the space to invest and develop offers and products which we can all recognize as the essential flip side to enforcement. One will not work without the other.
Finally, let me highlight another area which i understand was touched on yesterday, we need to do more on the transition to IPv6. Governments do not need (and indeed should not) regulate but we do need to do more in facilitating this important transition.
It is not just a case of running out of IPv4 addresses -although that is an imminent threat.
It’s also about the opportunities being missed - such as enhanced transaction security - by delaying the move to IPv6.
In a recent speech I made at the IPv6 World Congress I told delegates “don’t panic but start planning”. That’s my message to the OECD today; I hope you will take up this challenge.
In concluding, one year into this job, I fully recognise the difficulties and the complexities surrounding the areas we are discussing today - that’s why events like these are such a welcome forum for sharing ideas.
As you can tell, I’m a huge optimist and enthusiast for the positive power of the Internet.
Broadband and the Internet will continue to open extraordinary doors for us all, in terms of economic growth, for innovation, and for social change.
It’s up to us to embrace those opportunities, not shrink away from them.
If we do that, I firmly believe the Internet will continue to be a massive asset lifting societies, government and businesses, not a millstone weighing us down.
It’s our responsibility across the OECD to make that happen. Thank you.