"Mad Men" Minister's Role Model Should Be Nanny McPhee

In this age of bold government budget cuts, it seems odd timing for "Equalities Minister" Lynne Featherstone to waste time and money recommending that British girls and women should aspire to be like some TV actress. How very New Labour.

Politicians like our Lynne should aspire to be like Nanny McPhee, who arrives only when desperately needed and knows exactly when to disappear into thin air. Like now.

Image from Total Film.

The Great Aussie Firewall - The Game

The Guardian reports on the latest response to the Australian government's efforts to control the internet.

Web Filters To Block All Australian Content

The United Nations Safe Internet Committee (UNSIC) announced on Thursday that its web filters would no longer accept any Australian content. A spokesman explained: "The Australian government warned us that it has lost control of Internet content, and we should not accept any further Internet content from its servers until the problem is resolved."

When asked for the Australian government's response to those who believed in an open, neutral Internet, the UNSIC spokesman added, "Talk to the hand".

Posted via email from Pragmatist's Posterous

Digital Britain

I should start my take on the "Digital Britain report" by making one thing clear: the fact that the government has issued the report is itself a Good Thing. The government does have a role to play in fostering and facilitating the growth of the digital world.

In that respect, the most important message in the whole document is this:

"We are at a tipping point in relation to the online world. It is moving from conferring advantage on those who are in it to conferring active disadvantage on those who are without, whether in children’s homework access to keep up with their peers, to offers and discounts, lower utility bills, access to information and access to public services. Despite that increasing disadvantage there are several obstacles facing those that are off-line: availability, affordability, capability and relevance."

However, the terrible news is that the detail of the report is merely a cascade of top-down recommendations to institutional problems, rather than a genuine attempt to clear the obstacles to every one of us seizing control of our dealings with government, banks, utilities, broadcasters and others.

Take the word "relevance" in the above quote, and consider the following passage that Technollama has extracted:

“The popularity of X-Factor and Britain’s Got Talent shows the enduring drawing power of content-creating talent that few people possess. The digital world allows more of that talent to find its way to more consumers and admirers than ever before. But it is not wholly democratic: some have the talent to create content; many others do not. As throughout history, there need to be workable mechanisms to ensure that content-creators are rewarded for their talent and endeavour. And the need for investor confidence is key. User generated videos can be hugely popular, but there remains a healthy appetite for big movies costing many millions to produce.”

It's a sad reflection on the government's understanding of digital Britain, that "X-Factor" and "Britain's Got Talent" are not only seen as "relevant", but also epitomise Britain's "content-creating talent". It is deeply insidious for the government to claim that the digital world is "not wholly democratic". This is view of the online world is simply false. The digital world is much, much more important, relevant and creative than is suggested, and hugely democratic - much more so than this government would like. Television and user-generated video platforms are merely a part of a co-operative mix of many different types of web site that are increasingly inter-linked and intertwined, enabling access to a huge range of content in different formats from different people at different times on different platforms and networks, depending on where people are and what they're doing. "X-Factor" is just one pixel on a much larger screen.

So let's not allow a few television shows to be the Trojan horse for a bunch of protectionist measures for Britain's beleaguered entertainment institutions.

Just because television has "gone digital", does not mean that TV content is a proxy or yardstick for all digital content. Similarly, the fact that a few record companies have made uncorroborated guesses that they'll make £1bn less in CD sales over the next 5 years, must not colour our view of file-sharing or distract us from understanding the value of Net Neutrality. Their digital music sales increased by 28% in 2007, after all. And they aren't the only people relying on the digital media to release music. Furthermore, several studies on the impact of file-sharing appear to negate the assertion that file-sharing adversely affects creativity.

It is great that the government has demonstrated a willingness to foster the growth of digital Britain. But it is also extremely disappointing that the "vision" is for us all to be glued to a screen watching wannabes singing other people's songs.

FYI, I've extracted the government's proposed "Actions" below, and may comment in more detail on some of them later:

• The Government will look to Ofcom to formalise the Consortium of Stakeholders to drive a new National Plan for Digital Participation.


• The Government will ask the Consumer Expert Group to consult and report on the specific issues confronting people with disabilities’ use of the Internet in Digital Britain.


• The Government will write to the Channel 4 Board asking it how it can further contribute to driving Digital Participation.


• In order to ensure the delivery of the Universal Service Commitment, we will establish a delivery body – the Network Design and Procurement Group – at arm’s length from central Government.


• The Caio Report recommended relaxation of regulations on the installation of overhead lines to lower deployment costs.The Government proposes to launch a consultation, by Summer 2009, on the impact of any amendment to the Code governing this.


• The Government intends to consult on the proposal for a general supplement on all fixed copper lines for a Next Generation Fund.


• The Government will have an independently produced guiding technical arbitration on the timing and cost of 900 refarming (and other related issues), paid for by an industry fund.


• The Government will work with manufacturers so that vehicles sold with a radio are digitally enabled by the end of 2013.


• On Digital Radio, the Government has asked Ofcom to consult on a new map of mini-regions.


• Alongside the Digital Britain Final Report the Government is publishing a community radio consultation seeking views on changes to the current licensing regime.


• Alongside the Digital Britain Final Report, the Government is consulting on a proposal to legislate to give Ofcom a duty to take steps to reduce copyright infringement.


• The Intellectual Property Office is considering the scope to amend the copyright exceptions regime in areas such as distance learning and the preservation of archive material and intends to announce a consultation on these later this year.


• The Government launched its copyright strategy


• The Government intends to consult on legislative reform in respect of orphan works.


• The Technology Strategy Board will lead and coordinate the necessary investment for Next Generation Digital Test Beds and has allocated an initial budget for £10m for this purpose.


• The Government will consult openly on the option of a Contained Contestable Element of the Television Licence Fee, carrying forward the current ring-fenced element for the Digital Switchover Help Scheme and Marketing (c.3.5% of the Licence Fee) after 2013.


• We will take the views of the Channel 4 Board on the draft updated statutory remit for C4 Corporation as set out in this Report.


• The OFT will amend its guidance to ensure that in cases relating to local and regional newspaper mergers raising prima facie competition issues the OFT will ask Ofcom to provide them with a Local Media Assessment.


• The Government is inviting the Audit Commission to undertake an inquiry into the practice of local authorities taking paid advertising to support information sheets.


• Commercial public service broadcasting liberalisation, including regional news, analogue licences and advertising minutage


• The Technology Strategy Board has assigned an initial budget of £30 million to advance Digital Britain related innovation.


• The Government will carry out a major test in late 2009 of our ability to manage and recover from a major loss of network capacity.


• The Information Commissioner’s Office plans to consult later this year on a new code of practice in relation to “Personal Information Online”.


• The Government will consult on the penalties that Ofcom is able to impose for contraventions of the Communications Act 2003 and, in particular, the level of the fine it can impose in relation to persistent misuse cases.


• Led by the Contact Council, chaired by the Cabinet Office, Government will take forward proposals for developing a Digital Switchover of Public Services Programme starting in 2012.


• We propose that DCMS, BIS and Ofcom carry out an assessment, to be completed by the end of this year, of the opportunity for bringing together some or all of the delivery agencies either into one body or through a federated structure to achieve economies of scale and greater operational efficiency.

Gold-Plating The Consumer Credit Directive

Yep, the UK's bureaucratic alchemists are at it again, folks. They've taken a leaden, ill-conceived Consumer Credit Directive (2008/48/EC) and extended its application to UK products that are out of scope, "in order to maintain a comprehensive, homogenous set of rules" (see para 1.9), while rigidly interpreting many terms not defined in the CCD to further complicate the awkwardly prescriptive consumer credit regime.

Add to that over 100 pages of impenetrable bureaucratic mumbo jumbo, 68 incredibly complex questions and an implementation deadline of June 2010, and say goodbye to any more retail financial services innovation for at least 2 years while we try to resolve all the uncertainty.

Moreover, the complexity of the one-size-fits-all regime being proposed, save for a 'light-touch' exemption for bank-only overdrafts, will give banks an even greater advantage over non-banks in providing consumer credit. Product development will be constrained by a complex and awkward regulatory regime, leaving many consumers with overdrafts (or loan sharks) as the 'easiest option'. In turn, consumers will be exposed to tighter credit conditions being imposed by banks, who will enjoy an advantage in 'up-selling' their own credit products to the more creditworthy.

Overall, the result will be less choice and poorer value for consumers, and a feast for banks and loan sharks alike.

Gareth Thomas, the Minster responsible, has a lot of explaining to do. But maybe he figures it's all over for him, anyway?

Meanwhile, the so-called "Better Regulation Executive" appears to be sleeping peacefully, secure in the assumption that all this nonsense delivers on a commitment to regulation that is:

• "transparent" - this extended scope was not revealed as the UK's intention when the CCD was consulted upon at EU level.
  


• "accountable" - why should national bureaucrats decide the scope of an EU law?


• "proportionate" - but it goes beyond the scope of the CCD, and is therefore disproportionate.
  


• "consistent" - but it's inconsistent with the CCD, and as such fails to deliver a "harmonised" or consistent cross-border credit market, which the CCD was (misguidedly) intended to catalyse (see Article 22).
  


• "targeted" – far from it, these are explicitly described as a "homogenous" set of rules.

Wakey-wakey everyone...

Black Swans and Risk in Retail Financial Services

In a recent speech, the EU Commissioner for Consumer Affairs, Meglena Kuneva, signaled 5 current priorities in relation to retail financial services:

1. Address the way investment products are designed, described and marketed to consumers; and ensure that new proposals in relation to the sale of credit and mortgages "meet the high standards of modern consumer policy".
   


2. Strengthen the strict rules and enforcement on the misselling of retail investment products, in the light of "clear indications that the laws that are meant to protect consumers were insufficient and may have been repeatedly violated."
   


3. Complete by the end of the summer an in-depth study of banking fees and charges to consumers which appear to be unfairly hitting consumers.
   


4. "Start with regulators a new debate on the correct balance of risk and reward on Main Street. It seems that in recent years, risk has been significantly outsourced to unwary consumers. The question is what amount of risk and toxic products are we willing to tolerate in the retail financial market?"


5. Start a serious discussion on the regulatory oversight structure that is needed to generate accountability to consumers and to ensure consumer protection principles are consistently implemented across retail markets.

The nub of all these priorities lies in the highlighted question. I'm equally fascinated by it, even though the answer to it must surely be "nobody knows." It's part of the process of democratising the financial markets. However, as a starting point for the discussion, I'd be more comfortable with the statement that risk has simply landed on unwary consumers (and taxpayers, more importantly), rather than that it was somehow "outsourced" to them, implying intent and activity on the part of someone else. Otherwise we risk focusing on who outsourced the risk, and how, which is necessarily facing the past, not the future. Nailing those who broke the law should not be part of this debate. The fact is, the law failed to protect consumers and taxpayers from risk in the financial markets.

To put it another way, it was a mistake for us ever to have believed that we had successfully outsourced our own personal financial risk to banks, employers and governments.

The credit crunch is a Black Swan event - a surprise event that has a major impact and is [being] rationalised by hindsight, as if it had been expected. Inquiry into the why's and how's is therefore largely academic, albeit tantalizingly so. To take a counterfactual approach, one might ask whether it would have occurred if the CDO had been strangled at birth in 1987. The CDS also played a role, so we might consider the implications of it's death on a whiteboard in 1997. And we might ask the same in relation to Gordon Brown's rhetorical adoption of the so-called Golden Rule - that the government would only borrow to invest rather than to fund current spending, and in doing so it was "prudent" to maintain debt levels below 40% of GDP (implying it was also prudent to borrow up to that limit).

But we will never really know the cause of the credit crunch. And nothing we do will necessarily prevent another one.

Yet it seems likely and perfectly natural that we consumers and taxpayers will continue to rein in our expenditure, and take steps that we believe will maximise the sustainability of our income, for as long as it takes for us to feel we are able to survive another major financial disaster. As markets seem to "recover" in parallel, it will become harder and harder not to become lulled into thinking that our self-discipline is working, and that, at some ominous peak, we are finally safe...

So the real challenge is: how can we ensure that we consumers and taxpayers always understand that each of us personally bears the risk of financial disaster?

You are on your own. Pay less. Diversify more. Be contrarian!

Poor Gordon's Largesse Knows No Bounds

Oh, yes, it's aaaaall coming out now. All the great golden globs of public money lavished on the public sector over Gordon's twelve glorious years in charge of the nation's purse strings.

Well, after the binge, the hangover. It's Budget time. And this time we'll have to dig deep, folks.

That means paying for all 190 non-government bodies, and the nice juicy salaries that go with them. The Bureaucracy Champion. The cruddy "special advisers". The Bank bail out. The PFI bail-outs. The 13% increase in the public sector workforce from 5.1 in 1997 to 5.8m in 2006. The 76% of public sector workers who have final salary schemes, versus 17% in the private sector. The £500m worth of military helicopters sitting in a shed. The waste on IT projects. An average of £118,000 in MP's expenses revealed in October 2004, rising to £144,176 for 2007-08.

Not to mention a little bit of porn for Jacqui's hubby.

And for their role in all this, the Permanent Secretary of HM Treasury gets a knighthood, and Freddy gets his pension doubled.

Gordon's been told to stop, but he can't.

Poor chap. It's all he knows.

Is This Entertainment?

"The entertainment industry scored a rare victory on Friday," says the FT, reporting the prison sentences and fines handed out in Sweden to the four promoters of Pirate Bay.

Really?

As has been shown in the UK, there is no economic justification for spending public money on special life-support for the so-called "entertainment" industry's antiquated set of business models, let alone on imposing criminal sanctions. And doing so in the case of file-sharing only encourages these laggards to persist in their efforts to slow the development of an open internet to their snail's pace.

When lobbied for more public resources to tighten the entertainment industry's failing grip on consumers' wallets, Ministers should demand instead that the industry delight people to the point where they don't need or want to use the likes of Pirate Bay.

Now that would be a victory for the entertainment industry - and entertaining to boot.

Taxpayers' Bung to Music Majors: Doom For Net Neutrality

Another bail out, another Quango. This time New Labour wants the taxpayer to pay for the failure of the jaded business models of the music moguls via a new rights agency to combat internet piracy, and will regulate to give them special rights to collect internet users' data.

There is no justification for this, and it is no melodramatic exaggeration to say that the direct consequence is the end of a neutral internet. Claims by content providers that they'll lose £1bn in the next 5 years are disingenuous - and it's a paltry sum given what's at stake. In its consultation on proposals to combat illicit file-sharing, BERR was told that, in spite of these "losses", online music sales are growing at 28% pa. So the industry is doing just fine, and it's no surprise that BERR received little support for its proposals. Accordingly, this focus on piracy can only be an excuse for content providers and internet service providers to lobby for a statutory right to monitor, and in due course charge for, everything we do online - whether we're "pirates" or not. BERR couldn't deliver, so now Lord Carter is to give it a try.

Apart from being another example of this government's entrenched commitment to public sector largesse, is this also some kind of parting favour to New Labour luvvies? Or is it, like the approval of Heathrow's third runway, perhaps an attempt to leave the Tories in a position where to unwind such travesties they must oppose Big Business?

Who knows, but sooner or later this particular cheque has got to bounce.

Thanks to Chris for the alert.

Low Cost Government

Well, here we are in '09, the last of the Noughties: a fitting epithet for a decade of both reckless abandon and total collapse on the fiscal and financial front.

There's a lot of soul-searching going on, as well as a search for inspiration and leadership. While the US President-elect seems to have risen to the challenge, in the UK the search continues.

Bereft of vision, we look to the past, and it's a sign of the times that I was given Speeches That Changed the World for Christmas. Of course it includes Franklin D Roosevelt's First Inaugural Address, heralding the "New Deal", which has often been referred to in the news lately. It can also be read here.

While FDR's speech and the New Deal must be seen in the context of a more parlous economic situation than today's, and many of FDR's tactics are being deployed today, I was struck by one that's yet to be honoured in the UK:

"... insistence that the Federal, State, and local governments act forthwith on the demand that their cost be drastically reduced."

I mention it not just because UK civil servants were promised a 2% pay increase in a time of rising unemployment (public sector teachers will get 2.3% extra this year and next, while the Daily Mail shrieks that private schools are closing). I also raise it because New Labour might just mistake the need for fiscal stimulus as a wheeze for saddling us with more civil servants in the long term, who'll generate further cost in terms of random policy initiatives and bureaucracy to justify their existence. See the Taxpayers' Alliance "non-jobs" for examples.

Of course, hiring more public sector workers flies in the face of last September's promise to cut jobs, as reported in the Guardian:

"Separate ONS figures on public sector employment showed the number of people employed by the government fell 44,000 in the second quarter to 5.8 million, the lowest total since the second quarter of 2004. The government has pledged to cut 84,000 jobs by next April as a result of a review conducted by Sir Peter Gershon in 2005."

But as Chancellor, Gordon Brown approved a 13% increase in the public sector workforce from 5.1 in 1997 to 5.8m in 2006, according to the Institute for Fiscal Studies. So, Sir Peter's 2005 review was merely borne on the rising tide.

The IFS also says that public sector pay has caught up with private sector pay, yet about 76% of public sector workers have final salary schemes, versus 17% in the private sector. And public sector pensions are worth 25% of salary versus 20% in the private sector. With pay the same, there's no reason for that gap - if there ever really was one.

But take heart! Perhaps it's a sign the trend is about to reverse that certain people in the public sector are bizarrely receiving their Honours now - it's to reward them before they can be accused of selling out their colleagues.

On that basis, we really should have welcomed the news that, for overseeing massive public sector expansion and bail outs at the taxpayer's expense, the Permanent Secretary of HM Treasury gets a knighthood, while the captains of private sector finance get hunted out of office for their part in Brown's Boom and Bust.

The last of the Naughties?

Let's hope so.

Enjoy the year as best you can!

That'll Be All, Thank You Gordon.

They've really done it now. After ten years of unrestrained public sector expansion dressed-up as "Prudence" and leveraging their way through the good times like investment bankers on speed, New Labour's got no choice but to raise taxes. As Martin Wolf puts it, "This is a different country."

And as the late, great Hunter S. put it:

"... The Swine are gearing down for a serious workout this time around... So much, then, for The Road — and for the last possibilities of running amok in Las Vegas..."
The Great Shark Hunt: Strange Tales from a Strange Time

War on File-Sharers Spells D-o-o-m for Net Neutrality

The UK government is planning to promote "attractively packaged content" on the internet, bowing to pressure from copyright owners to prevent online piracy.

Only figures for the music industry are cited in the consultation paper, yet various regulatory and co-regulatory solutions are proposed that will affect all copyright content online.

The paper claims that about 6.5m people in the UK (25% of UK internet users), engaged in illicit P2P file sharing in 2007. This is estimated to "cost" the "music industry" £1bn over the next 5 years, against revenues of about £1bn per annum.

So, where's the problem? The "music industry's" digital music sales increased by 28% in 2007. Sure, declining CD sales resulted in a loss, but that's like saying Ford made a loss because no one wants to by the Model T anymore. It is also conceded that the decline in CD sales wasn't due to piracy alone - supermarket discounting and the shift to digital purchases were chiefly responsible. In other words, the "music industry's" woes are born of consumer dissatisfaction.

Consumers are used to getting content for free online, knowing that providers are making money out of advertising. So it's no surprise that 91% of survey respondents file-share because the content is free. More telling is that 42% say it's because they could find everything they were looking for. In other words, constraining supply by "attractively packaging content" doesn't work, and the music industry needs to get with the programme.

Of course, file sharing isn't actually not free. File-sharers spend time and pay for wireless technology, proxy servers, encryption and communications to download the material. No figures are given for how much revenue this generates, but at 6.5m UK consumers, it seems to be a sizeable market. I wonder who's making money out of that?

The chief cause of music industry misery actually seems to be the cost of enforcing copyright via the clunky legal system. They say it can cost £10,000 for each court order to obtain the IP address for each file sharer. I'm prepared to believe that, and I'm all for reducing the cost of enforcement. But that problem shouldn't need a "memorandum of understanding" among the rights owners' associations, network service providers and goverment, paragraph 3 of which says this:

"Many legal online content services already exist as an alternative to unlawful copying and sharing but signatories agree on the importance of competing to make available to consumers commercially available and attractively packaged content in a wide range of user-friendly formats as an alternative to unlawful file-sharing, for example subscription, on demand, or sharing services."

One shudders to think what is meant by "attractively packaged content". But it's implicit that any such packaging will be done by, and must suit, the few industry players who signed the MOU.

And that implies we'll be forced to pay for premium content bundled with rubbish, like "albums" on CDs. A sort of packaged internet, chosen for us by cosy institutions.

The neutral, open internet appears to be doomed.

PS: The Society for Computers and Law response to the consultation can be viewed here, and the SCL's response to proposals to increase the penalties for criminal infringement of intellectual property rights can be viewed here.

Nanny Home Office to Record Everything

The Home Office continues to build an all-seeing Nanny State at our expense, regardless of proportionality, competitive and low-cost communications or the need to conserve our taxes to support the financial system.

The proposed Data Retention Regulations require UK public network providers to retain data that identifes the source, destination, date time and length/size of every single phone call and email on their networks, as well as the type and location of the device involved. Using that data, authorities can of course find the content in, ahem, 'other systems'.

"... We [the Home Office] consider that these measures are a proportionate interference with individuals’ right to privacy to ensure protection of the public. Previous debates have concluded that the retention period is a significant factor in determining proportionality. In the draft Regulations at Annex A, we propose to continue with a retention period of 12 months."

Failing to mention, of course, that the Home Secretary can extend the retention period to 24 months, merely by written notice. And ignoring the fact that the cost is in secure storage, retrieval and deletion, for which the Home Office is now infamous.

This particular initiative has been handed to us (with Home Office complicity) by European Directive 2006/24/EC, conceived amidst the panic of the 'war on terror'. So, of course, it must be well considered and completely necessary today. It's also a natural extension of the Regulatory of Investigatory Powers Act 2000 (RIPA!) which David Blunkett introduced to such a warm welcome and which has been critical to Local Authorities' success in their war on dog-fouling [checks shoes for 3rd time today]. But just to add weight to its claim of proportionate impact on our human rights, the Home Office cites a vast empirical study undertaken by independent experts:

"During a two week survey in 2005 of data requirements placed by the police, there were 231 requests for data in the age category between 6 and 12 months old. 60% of these requests were in support of murder and terrorism investigations and 86% of the requests were for murder, terrorism and serious crime, which includes armed robbery and firearms offences."

So, we need this giant database and retrieval system for names, dates and places for every single communication on a British network in order to support about 200 data requests a month. Well, clearly the new regulations weren't needed to enable these requests to be made in 2005. And history appears not to record how critical the results were to solving a crime. Murder is an ironic justification, given how firmly the Home Office is holding the pillow over our faces. However, while the unsolved murder rate has nearly doubled over the past decade to 52, the Tory response missed a golden opportunity to justify investment in some enormous database to prove the exact time I called last night to say I'd be home to read stories. Instead, they merely blamed this rampant surge in mayhem on "police being overwhelmed with red tape, bureaucracy and government targets that distract officers from protecting the public." I feel their pain.

Ah, yes, the cost. The good news is that the taxpayer is to reimburse the network providers the "additional costs for retaining and disclosing all communications data". The Home Office claims this will amount to a suspiciously precise "£68.44m capital, £39.40m resource over 8 years", whatever that really means. Is the £39.4m perhaps an annual figure? Is it inflation adjusted? It assumes no investment in public sector systems, so that must be hidden elsewhere. Weirdly, it also assumes that electronic communications will cease in the UK in 8 years time, rather than grow exponentially. Perhaps the database will enable Plod to figure out whodunnit.

In the meantime, the Home Office claims it will avoid the disproportionate impact of all this on small firms. This assumes that either (a) there will be no more small firms providing network services in the UK (sad, but now plausible) or (b) small firms will be able to carry the cost of investing in the additional storage and retrieval systems until their requests for reimbursement are lodged with the Home Office, processed, approved and finally paid. Either way, start-ups and other competitive, low-cost network providers can't afford to play in that sort of bureaucratic game.

Next: average speed camera networks.

PS: the Society for Computers and Law response to the proposals can be viewed here.

Civil Law View of State's Role Slows EU Growth

Last Tuesday, I played a very small part in the closing panel discussion at the Society for Computers and Law 3rd Annual Policy Forum. The focus of the Forum was the European Commission’s painful review of the 15 or so Directives it has set up to regulate retail communications (and content/e-commerce) over the past decade.

It was an excellent event, and here is the link to the presentations.

Huge credit goes to Chris Marsden for persuading a stellar line-up of international speakers over the 2 days. Credit is also due to Mark Turner of Herbert Smith and Caroline Gould of the SCL for hosting the event and taking care of the endless practicalities.

For what they are worth, the points I made during the closing discussion were:

• The European Commission continually states its belief that regulation is required to catalyse cross-border retail markets in Europe. As it was explained to me in International Comparative Jurisprudence at law school, that’s because the European, civil law, view of the world is that people should only do what the State says is acceptable, whereas the common law view is that the law should follow to regulate commerce/behaviour as necessary to resolve market problems.

• However, while national e-commerce has surged, the evidence of the past 10 years is that the EC’s approach to cross-border markets hasn’t worked and will not do so until more the more practical obstacles to cross-border trade are cleared. As set out in my previous post, Civic Consulting found that these include language, culture, consumer preference for national products, lack of shared data on creditworthiness, tax/employment differences, difficulty in penetrating foreign markets, differences in consumer demand, lack of confidence in foreign brands, different stages of market development, lack of adequate marketing strategy.

• Regulators can play a role in early market phases. In fact, they would gain the trust and the buy-in of market participants to any regulatory measures that may eventually be required if they first helped facilitate market participants’ efforts to remove the practical obstacles to cross-border trade and learned something about the markets they’re trying to regulate along the way. Regulating first will either prove futile, or risk creating further obstacles. In the meantime, it will needlessly interfere with national markets.

Because of the jurisprudential difference I mentioned, these points seem to find favour with the common law members of the audience, rather than our civil law friends. Ironically, EC officials don’t seem to see it as within their remit to care whether or not regulation actually will deliver a single market. They simply have a mandate to churn it out in line with the EU’s single market policy, and fuss around with reviews when it doesn't work out. The practicalities are ignored. As a result, we are doomed to wait a much longer period of time for cross-border retail markets to develop, if they ever really will.

EU Choking on its Own Consumer Law

Having committed rather too late to the principles of "better regulation", it's only right that the European Commission should now seem to be choking on the dog's breakfast of consumer laws it has served up over the past 13 years (bearing in mind it takes 5 years to pass an EU directive).

Officials are reforming a plethora of electronic communications directives, and reviewing the 8 directives that make up what is (weirdly) known as the "Consumer Acquis" (which for some reason excludes the constant review of the E-commerce Directive). And, of course, it's overseeing the implementation of the Audio Visual Media Services Directive which overhauled EU television regulation in December '07.

With any luck, the Commission might realise how truly gargantuan a meal this has been for the average European citizen or small business to digest, let alone for the lawyers who have to produce bite size summaries for the busy executive's bin.

Has all this amounted to the catalyst for a cross-border consumer market that the Commission hyped, sorry, hoped? Not according to the Commission's own research. Nor could it, for the practical reasons previously mentioned. There is a facilitative role that the Commission can play, but that involves understanding the problems, their root causes and potential solutions before regulating.

More in this vein next Monday/Tuesday at the SCL's Annual Policy Forum!

Consumer Protection from Unfair Trading Regs 2008

I've given up my attempt to independently summarise the Consumer Protection from Unfair Trading Regulations 2008 ("CPRs" in the trade), and am simply going to refer you to what the OFT and BERR seem to make of them.

Oh, alright then. To summarise briefly:

• Regulation 3 bans unfair commercial practices - basically anything unacceptable from an objective professional standpoint which is (or is likely to) change an economic decision of the "average" consumer. In other words, because of the practice the consumer buys (or sells) what they would not otherwise have bought (or sold), or fails to cancel a transaction that they would otherwise have cancelled.
• Regulations 5-7 prohibit commercial practices which are misleading (whether by action or omission) or aggressive, and which cause or are likely to cause the average consumer to take a different decision.
• There are 31 practices that are prohibited in all circumstances - regardless of whether or not they actually affect a consumer.
• Oh, and this is all backed by criminal and civil enforcement powers and remedies.
  

Of course, this is fantastic example of EU overkill. There is simply no major consumer problem in the UK that deserves a whole swathe of new regulation which is harmonised with Greece.

Okay, so there are still dodgy traders, but we have TV shows that doorstep those guys for fun.

But some lawyers are getting pretty worked up about these regulations from a compliance standpoint (did I mention the criminal and civil enforcement provisions?). But this misses the wood for the trees. Any consumer-facing business that is reliant on these sorts of practices for its bread and butter has heavy cultural issues to contend with, and these issues could go right to the top of the tree. Cultural change is tough, and it isn't driven from the compliance coal face alone.

Which is why I enjoy advising Web 2.0 businesses - as they are predicated not only on treating consumers fairly, but enabling consumers to ensure that they are treated fairly.

Interesting issues for some eBay power sellers, though, and I guess there may be some old sharks who'll find themselves with a fine or making licence plates.

Lest we forget, there are also changes to the comparative and misleading advertising regulations. Basically, the Business Protection from Misleading Marketing Regulations 2008 ("BPMMRs"):

• prohibit advertising which misleads traders (Reg 3);
• sets out the conditions under which comparative advertising is permitted (Reg 4) - including the condition that the ad must not be misleading either under Reg 3 or the CPRs (see above);
• requires traders and bodies responsible for codes of conduct or monitoring compliance with such codes not to promote misleading advertising and comparative advertising which is not permitted (Reg 5).

And, unlike the rather limp Advertising Standards Association advertising codes, these puppies have teeth - criminal and civil enforcement remedies and nasty accompanying powers.

West End ad agencies will never be the same again.

Preparing Britain for the Future

Alarmed by the loose wheel nuts on this New Labour machine we're all riding in, I've been delving under the seats in a desperate attempt to find anything that might tell me where we're headed and just how dangerous it might get.

This evening, I found the Government's legislative proposals for 2008-09 under a jumbo crisp packet and the greasy remains of a cornish pasty in the rear of the cab.

Apart from the smell, the first thing that slaps you in the face is that these guys plan to do an awful lot - too much, one senses, if they are to really achieve much. This government is a great one for gallons of policies, tapping the brakes and U-turns. Not good if you're prone to motion sickness.

Second, while there are no funding details, of course, all this planning feels really expensive in terms of consultants, and additional civil servants to staff all the new agencies. In other words, boiling an ocean consumes a lot of gas. And all the chat about better regulation, only seems to mean more regulation, if only to gather the existing regulation into neat and tidy piles for lawyers to sift through (page 72). The words "Titanic" and "deckchairs" spring to mind.

Third, and most importantly, there's absolutely no sign that this government is remotely concerned about reducing public sector costs, eliminating waste, enhancing productivity or educating civil servants to work smarter rather than hiring extra "special advisers" to get things done around them. This can't end well.

Anyway, here are 7 things that shone at me out of the rubble:

1. We're going to get a a "Bill of Rights and Responsibilities" (p. 65), so be prepared to call Radio 4 to argue for outrageously generous personal rights and extremely high expectations of others.
   
2. A "community empowerment" bill (p. 66) will make it lawful to lynch local councillors for squandering our council taxes if we can only lobby hard enough.
3. Business rates will increase 2% to fund some kind of local authority "economic development" budget (p.12). Does this mean that local authorities are better at economic development than local businesses?
4. 8 million low income earners will be forced to take bank accounts to qualify for The Saving Gateway, a scheme that matches government handouts with individuals' own savings (p. 29). No mention of bank fees, or savings rates that will apply, but this is chum in the water for the retail banking sharks. You can already see their fins on the surface. Also a nice way to ensure that people lend to banks while the banks are refusing to lend it to each other (or anyone else, for that matter).
   
5. At last we are going to get 3 new, additional, extra education agencies - to regulate tests, skills funding and apprenticeships for some reason (pp 14-15). These agencies are vital, as they act as human shields for Ministers against citizens and the media.
6. An oddly named "Bureaucracy Champion" will be appointed to cut red tape the for the police (p. 18). Why can't the police find the people who created the red tape in the first place and beat them with truncheons until it's all removed?
7. Great news for IT vendors - a new Communications Data Bill will increase police access to our personal communications data, which will mean lots more IT kit to record and store it all. Really securely.

Remember: don't drink the Kool-Aid.

Better Regulation - Fill Your Boots

For those interested in keeping regulation to a bare minimum, like BERR (yeah, right), here's a little gem from the Office of the Leader of the House of Commons - the Government's rationale for the 2008/09 legislative programme.

It actually wouldn't let me set up any email alerts for speeches, statements, debates, parliamentary questions and so on, but it's a nice idea all the same...

There's plenty of fun to be had figuring out what problem(s), if any, they are trying to solve and comparing the rhetoric with the substance. I have some pet issues to revisit in the coming months.

Meanwhile, look out for random infrastructure projects to be paid for with public funds, like the £1.5bn pledged toward the Manchester congestion charge scheme. New Labour seems to believe it has a lot of taxpayers' money to hand out and not much time to do it!

HM Nanny Bombs in Nuclear Clean-up

HM Nanny is in fine fettle, commanding the nation's workers to get healthy and demanding that kids must wait until they're 18 before hurtling around the country's roads (which will help the ailing job figures, by the way, to the extent that these unreliable teens might dare to drive to work).

These subtleties are what really count in government. After all, three quarters of the country wants the government to tell us how to live our lives in detail.

So, there was no sense in Gordo galavanting on our behalf at the signing ceremony of the EU Constit... er, sorry, "Reform Treaty", when there was a meeting of the House of Commons "liaison committee" to attend.

And if the government can't control the security of people's personal information, then it can at least have a policy of being transparent when they get it wrong. And keep logs of the problems. And undertake investigations. You never know, people might just get sick of hearing about it all and stop bothering to care about their personal security anyway.

And then there is the distraction of targets. And of reports of performance against targets.

We are blinded by the detail.

But just for a laugh, I looked at the Autumn 2007 Performance Report of the Department for Business, Enterprise and Regulatory Reform, or "BERR". That's the department charged with promoting enterprise and cutting red tape, I'll have you know.

Footnote 6 on page 5 gives you an idea where the report is headed:

"Factors affecting performance are only discussed for targets from the current spending review [undertaken in 2004]. The performance on targets from previous spending reviews can no longer be influenced since the period covered by them has ended."

In other words, if they miss the targets, the slate gets wiped clean.

And here's what we got for our tax money spent on promoting enterprise and cutting red tape:

"Of the ten PSA targets from SR04 which BERR is responsible for delivering, five are assessed as on course to be delivered, two are assessed as showing slippage, two are split up and assessed in more detail by sub-target (with most of the sub-targets assessed as on course for each) and one further target is yet to be assessed."

5 out of ten.

But what of the targets "showing slippage"?

Pah! They're only concerned with fuel poverty in vulnerable households, reducing EU trade barriers to help developing countries and nuclear clean-up. "Greater choice and commitment in the workplace" hasn't even been assessed.

I'm sorry, did you say, "nuclear clean-up"?

Ah, yes... Target 9, page 7:

"reduce the civil nuclear liability by 10% by 2010, and establish a safe, innovative and dynamic market for nuclear cleanup by delivering annual 2% efficiency gains from 2006-07; and ensuring successful competitions have been completed for the management of at least 50% of UK nuclear sites by end 2008."

I see. The same government that tells us how to live our lives is also dumping our unencrypted personal data in Iowa and failing to clean up its own nuclear waste.

Somehow, I reckon life could get pretty warm around here during '08.

Better make this New Year's Eve party a big one. Enjoy.