Mandelson’s Cut-Off Plan Could Hold Back Innovation

At a meeting in IBM’s London HQ on the Southbank this week, business secretary Lord Mandelson appeared as the special guest star at an event designed to highlight the importance of innovation and smart use of technology in the UK’s recovery from recession.

IBM’s chief executive Brendon Riley, with the help of Mandelson, said the use of smart meters, telematics and other technology tied into the company’s push around business analytics would lead to the creation of new technology jobs – starting with 400 new positions at a new IBM analytics centre.

The business secretary’s appearance at IBM didn’t allow enough time for any questions as Lord Mandelson and his entourage swept out of the room before the microphones could be passed around. But one question hanging in the air amid all this talk of innovation, is whether there is any discrepency between the government goals in Lord Mandelson’s Digital Economy Bill, of promoting broadband use, and also cutting off the Internet access of those found guilty of persistent file-sharing.

Trying to make the UK a leader in IT innovation while engaged in an active policy of cutting off the internet access of some of its citizens may not be the smartest move . The very nature and complexity of some of file-sharing services mean that they naturally self-select tech-savvy users. The same people that Mandelson envisions as dragging the UK economy into pole postition for digital products and services could be hit by the governments net cut-off strategy.

File-sharing of copyright material is illegal – and the government is right to condemn it –  but the legislation laid out in the Digital Economy Bill effectively says the reward for technical ability and curiousity is being cut off from the Internet. They might deny it now, but a chunk of today’s IT leaders and innovators probably experimented with at least some low-level hacking in their youth.

But the danger from a heavy-handed response to file-sharing is not just that it stigmatises internet tinkering – something that is also arguably shown by the Government’s attitude to Gary McKinnon. It could also have a real detrimental effect on the roll out of high-speed networks in the UK.

While a good chunk of file-sharing is driven simply by the content being free, another major reason why people download films via services such as Vuze or the former Pirate Bay is that aside from iTunes there are few legitmate alternatives and the ones that exist are still too expensive.

If the government succeeds in stamping out illegal downloads – a very remote possibility – they will also eliminate one of the main reasons why consumers are willing to pay for a bigger pipe. This could potentially hit the service providers which in turn would result in less cash for upgrading the broadband network. Internet traffic in Sweden fell by an estimated 33 percent following the introduction of tough file-sharing laws in April.

While the connection between file-sharing and future broadband development could be seen as just a series of multiplied hypotheticals, the government’s plan to cut off file-sharers might be more easier to swallow if it was backed up by an equal effort to persuade the film and movie industries investment more in affordable and flexible download services.

If Lord Mandelson really wants the UK to become a technical leader, pushing companies to innovate rather than encouraging them to hang onto outdated business models is a critical step.