Digital Britain is mad and bad economics

4 December 2009

A new report from influential think tank the Adam Smith Institute (ASI) has attacked the government’s Digital Britain white paper – the inspiration for the Digital Economy Bill currently working its way through Parliament – describing plans to intervene in the digital communications industry as “both mad and bad economics”. The report’s author, digital media and communications expert Eben Wilson, put his case bluntly:

“Over the past twenty years, this thriving commercial sector has very rapidly created a vast engineering infrastructure at no cost to the taxpayer, and has generated large amounts of tax revenue in the process. It is hard to think of a better example of something the state should simply stay out of.”

The ASI’s report – Digital Dirigisme – covers the full range of issues addressed by the Digital Britain white paper, arguing throughout that the digital communications industry is characterized by rapid and unpredictable change, which governments and regulators simply can’t keep up with. As a result, their interventions will invariably do more harm than good.

The report goes on to criticize the government for not taking public concerns about the security of personal data seriously enough, describing their approach to this issue as “bland” and “disappointing”. The report suggests that personal identity and all data associated with it should be defined in law as private property owned by the individual. Any use of that personal data without the owner’s consent would thereby become unlawful.

The report also accuses the government of ignoring a “dinosaur in the room” by failing to address the taxpayer-funded BBC’s market dominance, which it says crowds out other commercial players. The report proposes a radical programme of phased privatization of the BBC, coupled with progressive cuts in the licence fee.

ENDS

Digital Dirigisme – A response to Digital Britain is published by the Adam Smith Institute, 23 Great Smith Street, London SW1P 3BL. A PDF of the report can be downloaded for free at http://adamsmith.org/images/stories/digital-dirigisme.pdf

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