Italy readies itself for tax assault on Silicon Valley

The Italian Government is preparing to join the UK and France in taking a tougher tax stance against Big Tech with the introduction of a 3% sales tax.

Designed to target the elusive technology giants which have been slipping between the mountains of red-tape to take advantage of cheaper tax destinations, the levy will be based against revenues realised in the market as opposed to tax. While it might be possible to move profits to different markets in the bloc, it is much more difficult to disguise payments taken from individuals who physically reside in Italy.

While it still might be early days in tackling the abuses of the taxation landscape, momentum is starting to gather. According to sources, the new tax regime could be announced during the next budget and set in place January 2020. The new budget from the coalition is due to be submitted to the European Commission today [October 15].

Although details are relatively thin for the moment, take any predictions or leaks with a pinch of salt. It would be fair to assume Italy is heading down the same route as the UK and France in holding Silicon Valley accountable to a fair and reasonable tax position, though due to the complicated political situation in the country, what form this could take is unknown for the moment.

During the 2018 Italian election, no political group or party won an outright majority resulting in a hung parliament. Numerous coalition governments could have been formed, and after a few failed attempts, the centre-left Democratic party and the anti-establishment Five Star Movement were sworn in last month.

These policies have been in the works for some time now, though what eventually comes out of the wash remains to be seen. Interesting enough, the failure of this latest coalition could force the country into another election, potentially a new government and perhaps a new line on tackling Big Tech.

That said, the only thing which is clear coming out of this political kafuffle is that Silicon Valley is a target.

Across Europe there are several member states who are becoming increasingly frustrated with the flamboyance of the internet giants accounting departments. There are of course a few who have scuppered a pan-European approach to new digital tax rules, the likes of Ireland and Luxembourg of course benefit from the unfair status quo, though with several member states going it alone, the writing is on the wall for Big Tech.

This is just one element of the changing landscape for tech. Alongside a rethink on tax rules, regulation and legislation governing data, privacy, surveillance, free speech, political advertising and artificial intelligence are in the works. Governments and regulators are attempting to drag bureaucracy and the rulebook into the digital era, and it might be a bit uncomfortable for some of Silicon Valley’s residents.

California proposes strictest privacy rules in the US

California Attorney General Xavier Becerra has unveiled new privacy proposals which have the potential to rival the impact of Europe’s GDPR on the digital economy.

When Europe announced its General Data Protection Regulation the digital economy was thrown into chaos. Businesses around the world had to audit monstrous amounts of data, as well as reconfigure business models, data collection procedures and relationships to ensure compliance. The rules being proposed here are slightly different, but Becerra is enforcing a privacy first mentality which might not sit comfortably with some in the digital economy.

There are three components of this proposed legislation to keep an eye-on. Firstly, the consumer has the right to request details on the data being stored by companies. Secondly, they have the right to demand this information be deleted. And thirdly, companies will have to seek consent from the consumer to monetize the data.

“Knowledge is power, and in the internet age knowledge is derived from data,” said Becerra. “Our personal data is what powers today’s data-driven economy and the wealth it generates. It’s time we had control over the use of our personal data. That includes keeping it private.

“We take a historic step forward today to protect Californians’ inalienable right to privacy. Once again, California leads the way putting people first in the Age of the Internet.”

However, before the privacy enthusiasts get too excited, there are some hurdles to negotiate. The original California Consumer Privacy Act (CCPA) has been passed, and will come into effect on January 1, though there have been additional bills passed to water-down the strength of these rules.

Although this will hit some like a bad smell, this is the reality of politics. Lobbyists in the US are incredibly powerful, and they are being fuelled by a very profitable technology industry with a lot to lose. This is not to say the new rules will not make an impact, though they might not be as revolutionary as some would hope when they come into effect.

That said, this will create the strongest privacy legislative regime across the US, ironically, in the home of the company’s who play so carelessly with privacy rights.

Looking at the similarities with GDPR, it does seem there has been some inspiration drawn from the rules. The right to request more information, as well as the right to demand deletion, are two elements which seem to be taken from GDPR. The final element mentioned above is very interesting and we suspect will be the focal point of the lobby efforts as these rules gather momentum.

The inclusion of a ‘Do not sell my data’ link is an aspect no-one in the data-sharing economy will want to see. The industry has largely profited to date through inaction. No-one can do anything about the monetization of data short of refusing to download the app. Consumers are effectively being forced into participating in the digital economy as there are no rules to provide an alternative. This element of the legislation would certainly cause a stir.

Some people will not like the fact companies are making money off their personal data if they are not getting a share of the rewards, irrelevant as to whether they are getting a service for free. Some will object on ethical grounds. Some will reject the concept as the risk of data breaches or leaks is deemed too great. Some will feel uneasy as there are still so many unknowns regarding the darker corners of the world wide web.

Irrelevant as to why an individual might not like the current status quo, as there has been no alternative, it has mattered little. The introduction of an alternative presents a lot of unknown scenarios. More moving parts will have to be factored into risk assessment protocols. It presents uncertainty, which is the enemy of profit.

Interestingly enough, Becerra seems to have learnt the residents of Silicon Valley have very elusive lawyers. Also included in the rules are definitions of those who would be subject to the rules. The company would have to:

  • Have revenues in excess of $25 million
  • Buy, receive, or sell the personal information of 50,000 or more consumers, households, or devices
  • Derives 50% of annual revenues from selling data

These are quite crafty conditions and could potentially cover every type of organization out there. The lawyers will have to be on top-form to find the grey areas here.

The rules still have to negotiate the turns and throws of the political aisles before the digital economy gets too worried, but California is setting the pace when it comes to tackling privacy concerns in the US.

Europe postures with standards leadership still on the line

European standards organization ETSI has released a report demanding the continent take a leadership role for standards and regulation in the global digital economy.

While some might question whether the sluggish Brussels bureaucrats can get up to speed quick enough, there is hope; regulators around the world all share the same track-record when it comes to the painfully slow progress of creating regulatory and legal frameworks.

The report, commissioned at the request of ETSI, was authored over the first-half of 2019 and demands Europe take the lead on creating the standards necessary for a healthy and progressive digital economy.

“Our competitors are very serious about taking the lead in digital transformation,” said Carl Bildt, Co-Chair European Council on Foreign Relations.

“It is important that EU lawmakers put standardization at the centre of EU digital and industrial strategy. Otherwise Europe will become a rule taker, forever playing catch-up in the innovation, production and delivery of new digital products and services.”

Although many would want to see a collaborative, geographically-neutral, approach to standardising the digital economy, this is unlikely to happen. As Bildt highlights above, someone will take a leadership position, standards will gain acceptance, before other regions will have to adopt the rules.

The question which remains is whether Europe, the US or China will have the greatest influence on global standards. In fact, ETSI questions whether Europe is keeping pace with leaders today or whether its influence is waning already. Unfortunately, with the platform economy gaining more traction each day, this is one area which should not be considered a strength of the bloc.

46% of platforms with a revenue above $1 billion are based in the US and 35% in Asia, while Europe only accounts for 18%. These platforms often drive their own ecosystems and have largely been self-regulating to date. This is going to change in the future, though to give European organizations a chance at capturing growth, the European Commission might have to lead the charge to create open-standards. The contrary approach might only offer the established players greater momentum and influence.

This is perhaps the risk which is emerging currently. The idea of globalisation and open-standards are not new, though there is evidence certain markets are heading towards a more isolationist mindset and regime.

Although it is easy to point the finger at aggressive political leaders elsewhere, the report demands Europe look intrinsically also. The European Commission has to take a strong leadership position across the bloc, as with 28 members states there is risk of fragmentation. It only has to be slight variances to start, but this could snowball into greater complications. The digital tax conundrum is an example of what can go wrong over an extended period of time.

This report might be more of a generalist statement to encourage a proactive mindset from European bureaucrats, though there are plenty of examples of governments, public sector administrations and private industry trying to control the tone.

Looking at the ever more influential world of artificial intelligence, the number of feasibility, standards and ethics boards is quite staggering. All of these initiatives will want to create rules and frameworks to govern the operation and progression of AI, though only one can be adopted as the global standard. Regional variances are of course feasible, but this should not be deemed healthy.

In the UK, the Government created its AI Council. The European Commission has released various white papers exploring how AI should be governed. The White House’s National Science and Technology Council Committee on Technology is also exploring the world of AI. Facebook has even created its own independent advisory panel to aid the creation of standards and regulation.

Should Europe want to control the global standards process, it will come up against some stiff competition. The power and influence of the US should not be underestimated, it is home to some of the worlds’ most recognisable and profitable brands after all, while China has a track-record of flooding working groups at standards organizations. This will have a noticeable impact on the final outcome.

That said, the success of GDPR will offer hope.

Europe’s General Data Protection Regulation might have caused headaches all around the world, but it has set the tone on the approach to privacy, management of data and the influence of the consumer. Since its introduction, several other countries, India and Japan being two examples, have been inspired by GDPR to introduce similar regulation, while there have been calls in the US to do the same also.

This piece of regulation was critical to ensure the European principles of privacy are maintained moving forward. This is a win, but there are still battles to be had when it comes to AI, security, encryption, cross-border data flow and access to data.

Standardisation might not be the most exciting topic to discuss in the TMT world, though taking a leadership position can offer advantages to the companies who call that region home. A thorough and innovative regulatory regime can open-up new markets, ensure competition is healthy throughout the ecosystem and drive national economies at scale.

The regulatory landscape is set to undergo somewhat of a shift over the coming months and years, though which region will take the lead is still hanging in the balance.

Government deals with difficult landlords

The UK Government has unveiled new rules which will allow telcos to speed-up the process of dealing with non-responsive landlords.

One of the challenges being faced by telcos in upgrading broadband across the country is gaining access to the right properties and land. Multi-dwelling units seem to be the biggest challenge, as some property owners are less than helpful when granting access. The new rules will speed up the process of seeking access through the courts for telcos.

“We’re pushing ahead with delivering the digital infrastructure that will underpin the UK’s future growth and boost our productivity,” said Digital Minister Nicky Morgan.

“We’ve just announced £5 billion so that people in rural communities will get gigabit speed internet at the same time as everyone else. And we’re now making sure people living in blocks of flats and apartments are not left behind either and can reap the huge benefits of the fastest and most resilient internet connections.”

Telcos claim that 40% of requests to enter a property are left unanswered by the landlords, and while we suspect this number has been inflated for the purpose of the lobbyists, access to multi-dwelling units is a persistent complaint.

“This new law is something Virgin Media has long called for – it breaks through a major broadband barrier as we invest to bring gigabit speeds to our entire, ever-growing network,” said Lutz Schüler, CEO of Virgin Media. “Giving broadband builders clear and efficient access rights will mean the many forgotten flats across the country can get the next-eneration connectivity they deserve.”

Under the current rules, telcos can petition the courts for access to properties should the landlord be unresponsive, though this process can take up-to six months and cost as much as £14,000. The new rules offer a streamlined service, reducing the action time to 6-7 weeks, and the cost to £300 per case.

Although this is only addressing a single challenge in the digital economy, it is one of the issues which has been highlighted in recent months by the telcos. Should these companies have any chance of meeting the Government’s exceptionally aggressive full-fibre deployment objectives, there are a lot of regulatory barriers which will have been be broken down. This is one, demonstrating the Government is perhaps listening to the appeals of industry.

Presidential hopeful criticizes lack of tech knowledge in US Government

Senator Elizabeth Warren has launched a Twitter tirade to blast Government officials who are seeking regulatory advice from those who will be subject to the stricter regulation.

Although understanding the consequences of new regulation from those who would be deemed most impacted in a sensible way to operate, it does appear Warren believes there is too much reliance on outside sources.

Critics of government agencies and regulatory officials will be quick to raise a glass. For some, the competency of bureaucrats is woefully lacking when it comes to understanding the nuances of the technology industry. This is perhaps understandable, the segment moves at a remarkable pace after all, however it does create the difficult regulatory landscape where companies are free to duck and dive through the grey areas of inaction, inadequacy or a lack of progress.

“I’ve got a plan to end lobbying as we know it — but strengthening Congress’ independence requires us to do more,” Warren said on Twitter. “We must invest in resources to allow members of Congress to make informed decisions without relying on self-interested outside sources.

“My plan revives and modernizes the Office of Technology Assessment, shores up congressional support agencies, and transitions congressional staff to competitive salaries — so we can have competent public policy that actually holds big corporations accountable.”

Warren has hit the nail on the head when it comes to understanding why the chasm between the technology industry and the rules governing it is so wide; those who understand how the industry works, go work for the private sector. This is down to the salaries which are being paid, and also the work itself. Do the best and brightest in the work want to work drafting rules and red-tape, or would they rather work on creating cutting edge technologies and services?

Pumping more cash into these agencies and organizations will not solve the problem of a skills shortage, but it will address one of the difficulties.

To be fair to Warren, she is addressing a problem which plagues politics; the influence of interest groups. This is not an issue restricted to Washington, though as the US is home to some of the worlds’ most influential technology companies, it is perhaps more apparent in the country than anywhere else.

With the issue of net neutrality, the telcos threw cash at the lobbyists. And when it comes to the break-up of Big Tech, Silicon Valley began signing cheques which would make eyes water. Over the course of 2018, Google spent $21.7 million on lobbyists, AT&T spend $18.5 million, Amazon $14.4 million, Facebook $12.6 million and Comcast $15.6 million. These figures are only lobbyist spend in the US, and it is also worth bearing in mind associations would have their own spend as well.

The lobby industry is a powerful one in the US, this is not something which will change unless there is a significant upheaval, though politicians and officials could be less susceptible to it. This is where Warren is making a very valid point.

Industry should be consulted on up-coming regulatory evolution, this is only reasonable as regulation is not supposed to destroy business models, however it is important those asking the questions should have a comprehensive understanding. It will (theoretically) stop officials being misled, over- or under-compensating and aids future proofed regulation.

This will be a monumental challenge for Warren and her team, though it is a lot more achievable than previous claims make by the Presidential hopeful.

In announcing her plans to charge towards the White House, Warren also declared war on Silicon Valley. In an age where politicians are making big promises, Warren raised the stakes by suggesting the break-up of Big Tech.

Dissecting these companies is a daunting task, but it is also one which a few might question the logic of. Yes, the internet giants need to be held more accountable through regulation and greater scrutiny on acquisitions which could lead to a less competitive marketplace, however these are the companies which are driving the US economic dominance on the world stage. Weakening the positions of these companies could very well undermine the pursuit of success and open the door for competitors in other nations to mount a challenge.

However, with the announcement made via Twitter, the US Government would certainly be in a better position if more ably-minded, tech enthusiasts were on the payroll. Many criticise the sluggish nature and short-sightedness of governments, irrelevant to their nationality or location, and Warren is proposing a model to reassert the capability of the Government.

Another question which you have to ask is where the money to fund these salaries is going to come from? Either some departments are deprived, taxes are further straining, monies are borrowed, or industry is asked to contribute. The latter is the most likely, though this would give another reason for industry to line the pockets of the lobbyists.

In truth, this suggestion is a nightmare for the residents of Silicon Valley. These companies have benefitted unimaginably from the regulatory chasm, seeking profits through the introduction of new business models which traditional industry could not dream of.

Ironically, the suggestion of tackling lobbyists will probably make the whisperers and nudgers even richer.

UK starts laying groundwork for another assault on privacy

UK Home Secretary Priti Patel is reportedly to sign a transatlantic agreement offering the UK Government more clout over the stubborn messaging platforms.

First and foremost, this is not a pact between the UK and US which would compel the messaging platforms to break their encryption protections, but it is a step towards offering the UK Government more opportunity.

According to The Times, Patel will sign an agreement with the US next month which will offer the UK powers to compel US companies which offer messaging services to handover data to police forces, intelligence services and prosecutors. After the Clarifying Lawful Overseas Use of Data (CLOUD) Act was signed into law last year, the US Government was afforded the opportunity to share more data with foreign governments, and this would appear to be the first of such agreements.

This is of course not the first time the UK Government has set its eyes on undermining user privacy. Former-Home Secretary Amber Rudd was the champion of the Government efforts to break the blockage during yesteryear, attempting to force these companies to introduce ‘backdoors’ which would enable the access of information.

There are of course numerous reasons why this would be seen as an awful idea. Firstly, the introduction of a back-door is a vulnerability by design. It doesn’t matter how well secured it is, if there is a vulnerability the nefarious actors in the darker corners of the web will find it.

Secondly, stringent security measures should not be undermined for the sake of it or because the consumer is not driven by security as a reason for using the services. Your correspondent does not buy a car because it has the best airbags, but he would be irked if they didn’t work when called upon.

Finally, governments and public offices have not proven themselves responsible enough to hand over such a potential violation of the human right to privacy. And let’s not forget, Article 8 of the European Convention on Human Rights is solely focused on privacy.

What is worth noting is this pact with the US Government is not a measure to introduce back-doors into encryption software, but you should always bear in mind what the UK Government is driving towards with incremental steps. It is easy to forget the bigger picture when small steps are made, but how often have you looked back and wondered how we got to a certain situation?

The CLOUD Act offers the US agencies the right to collect limited information from the messaging platform providers. Currently, US authorities can request information such as who the user is messaging, when and the frequency. The law does not grant access to the content of the messages, though it is a step towards wielding greater control and influence over the social media companies.

Should Patel sign this agreement, and it is still an if right now, this power would be extended to the UK Government to collect information on UK citizens.

What is worth noting is this is not official, though it would not surprise us. Rudd attempted to revolutionise the relationship between the UK Government and messaging platforms, and this failed spectacularly. This would be a more reasonable approach, taking baby steps towards the ultimate goal.

50 US Attorney Generals sign-up to Google antitrust investigation

Usually, when you put 50 lawyers in a room together, it’s a bloodbath, but Google has seemingly done the impossible; united them all behind a single cause.

Led by Ken Paxton, the Attorney General representing the State of Texas, the coalition brings all except two State Attorney General’s on board, California and Alabama, as well as the legal minds representing Washington DC and Puerto Rico.

“Now, more than ever, information is power, and the most important source of information in Americans’ day-to-day lives is the internet,” said Paxton. “When most Americans think of the internet, they no doubt think of Google.

“There is nothing wrong with a business becoming the biggest game in town if it does so through free market competition, but we have seen evidence that Google’s business practices may have undermined consumer choice, stifled innovation, violated users’ privacy, and put Google in control of the flow and dissemination of online information. We intend to closely follow the facts we discover in this case and proceed as necessary.”

Paxton has pointed out in the statements that the Government and its agencies does not have an issue with a dominant market player (we don’t believe this however), but it must maintain this dominance by playing within the rules. This is where Paxton believes Google has become non-compliant with US law; it is stifling competition and the choice for consumers.

The difficulty the legal coalition will face in this investigation to start with is the reason behind Google’s market domination; it offers the best search service on the web. Some might disagree, but we believe it is the most effective and accurate internet search engine available. This will be one of the reasons behind the continued dominance, though there are of course others; these other factors will determine whether Google is abusing this position of dominance.

One area which might become of interest to the Attorney Generals is the roll of acquisitions in maintaining this leadership position. Of course, M&A is a perfectly valid means of growing a business, though should such transactions be deemed as a means for Google to kill off any competition which could potentially emerge, this would be a violation of antitrust laws.

This is where the probes will find it very difficult to fight against Google and the other giants of Silicon Valley; can anything be done against potentially anti-competitive acquisitions? In the Google case, some might suggest it shouldn’t have been allowed to acquire both Android and YouTube to supplement its PC search advertising business. This suggestion is of course made with hindsight, though there will be some who will attempt to do something about it.

Elizabeth Warren, the Democrat Senator for Massachusetts and potential opponent for President Trump in the 2020 Elections, has already promised to break-up the tech giants. FTC Chairman Joe Simons is another who has the divestment ambition, though he has stated it would have to be done sooner rather than later, as Big Tech is manoeuvring assets and operations in an attempt to make any divestments almost impossible.

What this investigation does offer is another layer of scrutiny placed on the internet giants. This investigation might well be directed at Google, but any precedent which is set could be applied to the other residents of Silicon Valley.

When you actually stand back and look at the investigations which are on-going, the US Government is creating a swiss cheese model of legal nightmares for the internet giants. The more layers which are applied, the less likely Big Tech can squeeze through the legal loopholes and come out unscathed on the other end. The likes of Google will have the finest legal minds on the payroll, but the legal assaults are coming quickly, and from all angles.

Aside from this investigation, Google has also recently confirmed it is at the centre of a Department of Justice probe and is also facing the House Judiciary Committee’s examination into big tech antitrust. And then it will have to consider the potential implications of other enquiries.

Facebook is being investigated by the FTC for its acquisitions of WhatsApp and Instagram, as is the House Judiciary Committee. New York Attorney General Letitia James is asking whether the social media giant has damaged the consumers lives through its operations. Finally, the House Financial Services Committee as well as the Senate Banking Committee is investigating the Facebook push into cryptocurrency.

At Amazon, the FTC is investigating how the eCommerce giant competes against and aids third-party sellers on its platform, while at Apple, the House Judiciary Committee probe is attempting to understand whether the commission it takes from developers through the App Store is anti-competitive.

Each of these investigations will create precedent which can be applied to others in the Silicon Valley fraternity. It also gives any failed attempts to limit the potential of Big Tech another opportunity. There are plenty of irons in the fire and Silicon Valley will do well to avoid a branding altogether.

With the sheer volume, breadth and depth of investigations scrutinising the business models of the internet giants, it is starting to become impossible to believe the regulatory status quo will be maintained. The sun might be setting on the Wild West Web.

To date, Silicon Valley has enjoyed what should be considered a very light-touch regulatory environment. For us, there are two reasons for this.

Firstly, regulators and legislators simply could not keep up with the progress being made by the technology industry, or perhaps did not foresee the influence these giants might be able to wield. Whether it is a shortage of bodies, skilled workers being snapped up by private industry or simply too many different segments to regulate, the progress of technology leapt ahead of the rules which were supposed to govern it. The internet giants have been profiting greatly off this regulatory and legislative void.

Secondly, you have to wonder whether regulators and legislators actually wanted to put the reigns on the digital economy and the power houses normalising it in the eyes of the consumer. These companies are driving economic growth and creating jobs. The US is at the forefront of an industry which will dominate the world for decades to come; why would the Government want to stifle the industry which is keeping the US economy at the head of the international community.

With both of these explanations, perhaps it has gotten to a point where excess is being realised. The technology industry has become too powerful and it needs to be reigned in. Some might argue that Silicon Valley has more influence than Washington, which will make some in Government feel very uneasy.

Openreach cuts costs by 75% to attract builders to fibre diet

Openreach will be slashing the cost of installing fibre wires in new residential developments of less than 30 plots, as it looks to tempt housing developers onto a fibre diet.

Although it might seem remarkable, house builders are not currently mandated by law to install fibre broadband infrastructure on new premises. Considering the aggressive rhetoric being spouted by the UK Government when it comes to laying future-proofed foundations for the digital economy, it does beggar belief the opportunity to cut corners and ignore fibre is still available to these developers.

The ‘Housing Crisis’ in the UK is one which does attract headlines. The severity of this ‘crisis’ does of course depend on who you are talking to, though in certain regions it is undeniable there is a shortage of properties. All you have to look at the price of a two-bedroom flat in London to understand the pickle some youngsters might be in.

This does present an opportunity for the housing developers to make a profit. During the last quarter, the Office for National Statistics estimated 42,870 new homes were completed, though not all took fibre as default. Around 88% of plots on new builds contracting with Openreach elect fibre, though this number increases to almost 100% for plots of over 30 premises.

However, there are still numerous developers which are not taking fibre as a default position. Openreach suggests 124,000 of the new homes constructed in the UK in 2018 still lack access to ‘superfast’ broadband speeds of 30 Mbps or more. The situation is gradually improving, though there still much work to do.

With this in mind, Openreach is looking to increase the attractiveness of installing fibre connectivity through cutting costs by up-to 75% for multi-dwelling housing developments up to 29 properties.

“Our existing offer already provides huge benefits to both buyers and builders alike, but we wanted to go further and make sure everybody moving into a new build property can enjoy the advantages of Fibre-to-the-Premises broadband,” said Kim Mears, MD of Strategic Infrastructure Development.

“Our new offer provides a low-cost option to housebuilders and we hope it will help encourage the adoption of this future-proof technology across smaller developments so that no-one’s left behind.”

Although internet speeds might seem like an after-thought to some, research from LSE and Imperial College Business School suggests home-owners in London are willing to pay up to 8% above the market value properties in areas offering very fast internet speeds. The benefits of fibre connectivity for housing developers is key, though there are still some who are demonstrating a preference for copper, presenting a problem to the likes of Openreach and Virgin Media; it would be far simpler to connect properties while they are in the construction stages.

The Future Telecoms Infrastructure Review (FTIR) concluded connectivity in new builds was not anywhere near the standard it should be, while the FTTH Council Europe estimates also paint a dreary picture. Fibre penetration is as low as 1.5% across the UK, woefully short of other nations such as Latvia (46.9% penetration), Sweden (43.6%) or Spain (43.6%). Even the lethargic Germany manages to beat the UK with 2.3%.

Moving forward, the Department of Digital, Culture, Media and Sport is set to publish its opinion from a recent consultation into the matter, with the intention of making it mandatory for developers to install gigabit-capable connections to all new build developments in the future. This is a step in the right direction, though it does surprise us it has taken until 2019 for such rules to be considered.

The consultation should result in a change to the rules, though whether this goes as far as some would want remains to be seen. It would also be a fair assumption that these new rules would not be implemented immediately.

Openreach might have to use the financial carrot for a bit longer while the slow-moving cogs of government click into place.

UK Transport Committee questions safety of hands-free

A UK Department of Transport Committee has released a report demanding the use of mobile phones, including hands-free features, be banned while driving.

Quoting research which suggests traffic collisions where mobile phones contributed resulted in 773 casualties, including 43 deaths, in 2017, the Committee is calling for tighter rules and regulations for mobile devices while driving. Hands-free features have also been targeted, with the Committee claiming the safety benefits are misleading.

“Despite the real risk of catastrophic consequences for themselves, their passengers and other road users, far too many drivers continue to break the law by using hand-held mobile phones,” said Chair of the Transport Select Committee, Lilian Greenwood.

“There is also a misleading impression that hands-free use is safe. The reality is that any use of a phone distracts from a driver’s ability to pay full attention and the Government should consider extending the ban to reflect this.”

Although it is quite clearly more dangerous to use a mobile device while driving, a bit of common sense needs to be applied here. If a driver is using the full hands-free capabilities of the phone, in the sense said driver only interacts with the device using the voice interface, exceptions should be written into any rule changes.

Looking at the hands-free features of the phone, is this anymore distracting that listening to the radio or having a conversation with the person in the passenger seat? Perhaps an enforceable screen-lock should be introduced to ensure the driver is not tempted to make use of other features while in the car, but banning voice interactions with the device should surely mean the driver should be banned from having a conversation with passengers?

This is perhaps what the misleading nature of hands-free is; users are not making use of the entire suite of features. If the user has to tap the screen to accept a call or scroll through contacts to make a phone call, if is clearly distracting. However, there is no reason the user would have to take their eyes off the road if all hands-free features are being used.

Interestingly enough, your correspondent did a quite test to see how easy it was to do to operate hands-free.

Davies: OK Google, send a text to Dad

Google Assistant: For that, you’ll need to unlock your phone

Davies: OK Google, search for directions to Cardiff Castle

Google Assistant: The best way to Cardiff Castle is…

This is where the issue might lie. If unlocking the phone is a requirement to make use of hands-free features, it pretty much undermines the benefits. It’s not every feature which requires the device to be unlocked, however these are communication devices. This is quite an oversight, and while there will be changes to the settings which can be made, it is not the promise which has been relayed to the consumer through advertising.

The Committee is absolutely correct that rules have to be tightened up. Two weeks ago, a White Van Man managed to argue against a traffic violation as he was reportedly using the video function on the phone while driving. To break the rules today, data has to be sent or received from the phone while driving. This is a grey area which of course should be corrected.

However, an outright ban on smartphone usage, which is being called for here, is an incorrect approach to future-proofing rules and regulations for the digital economy.

Speaking to BBC Radio Two, Greenwood has suggested the best approach would be to put a mobile phone in the boot prior to beginning driving. However, this would be incredibly difficult for those who rely on a smartphone for work. Take delivery drivers, for example, who need to find out about the next job, or taxi drivers who need accurate navigation applications. What about paramedics or police who have to be engaged with a radio constantly?

A spokesperson from the RAC has countered Greenwood’s point, suggesting police should focus on enforcing current laws instead of creating new ones. Research suggests enforcement of laws focused on using mobile devices has dropped by two-thirds since 2017. The RAC spokesperson suggests these new laws are going too far.

In reality both are correct. Greenwood is right in suggesting current laws are not stringent enough, they were largely written in 2003 when a mobile device was a completely different product, though banning devices completely is unreasonable. There are considerable benefits to using a smartphone while driving, assuming the user is making proper use of hands-free features and engaged with the road.

What you have to consider here, and we suspect Greenwood has not, is the ‘law of unintended consequences’. Mobile nurses won’t be able to do their jobs properly and surely if talking to someone on the phone using hands-free is dangerous, singing along to the radio or talking to a passenger is exactly the same? The law has to be consistent. It is still a distraction, but no-one is considering banning having children in the backseat.

If people use the hands-free features correctly, there is no difference from the distractions people face today. Perhaps the focus should be on tackling misleading claims, introducing screen locks while driving, forcing drivers to make use of built-in Bluetooth features and improving the application of the voice interface.

Regulation for the sake of regulation is always a dangerous game to play, but it is often the outcome when technology-illiterate individuals, with little understanding or consideration of the future, are in-charge of making the rules.

White Van Man set to cause chaos with smartphone driving rules

A North London builder has potentially opened Pandora’s box after successfully challenging a conviction for using a smartphone while driving.

On 20th July 2018, Ramsey Barreto was found guilty of using his smartphone while driving his VW Caravelle along Field End Road in Ruislip, filming a traffic incident. The case seemed to be a relatively simple one as there is video evidence of the crime, though Barreto’s lawyers have successfully overturned the conviction in the High Courts, as he was using the video function of the device not the communication components.

This might sound like somewhat of a humorous incident with ‘The Man’ ending-up on the losing side for once, but case could see hundreds of challenges to previous convictions for similar offenses.

“The legislation does not prohibit all use of a mobile phone held while driving. It prohibits driving while using a mobile phone or other device for calls and other interactive communication,” said Lord Justice Gross of the Court of Appeal.

This ruling does not necessarily mean Barreto is off-the-hook, as Lord Justice Gross noted in his opinion that using a smartphone while driving can still be presented as careless or dangerous driving, but Barreto cannot be convicted through Section 41D of the Road Traffic Act 1988 and Regulation 110 of the Road Vehicles Construction and Use Regulations 1986.

This is where is gets complicated and mere mortals who have not studied the intricacies of the law will find themselves in a bit of bother. The legislation is very specific, and this is where Barreto’s lawyers have found adequate wiggle room.

In Regulation 110, Section 4, a handheld mobile device is described as one which ‘performs an interactive communication function by transmitting and receiving data’. In Section 6, the device can be treated as a mobile telephone if it is ‘making or receiving a call or performing any other interactive communications function’.

The fact Barreto was using his smartphone is not being disputed here. A police officer at the scene of the incident saw and confronted Barreto for holding his smartphone up to the window of the vehicle for ’10 to 15 seconds’. The lawyers have argued there is nothing specifically mentioned in the law that prevents a driver from using a device for its other functions outside of phone calls and messaging. As he was making a video, he has not broken the laws which the prosecution pointed to during the original trial.

This is where the UK, and everyone else for that matter, has been struggling in the digital economy; rules and regulations have been written for a by-gone era. In this instance, the rules were written in 2003 when mobile devices did little more than make calls and texts. There are no specific clauses or sections which address the functionality incorporated in the devices during the subsequent 16 years.

Laws are very complicated to understand because of the complex manner in which they are written. This is perfectly understandable, as there needs to be as little grey areas as possible when applying the law. In practice, the specificity of laws allows for certain individuals to escape conviction, though the only other option would be to make the language more nuanced and present a much greater risk of abuse.

The issue which we are facing in the UK right now is that of dated regulation and legislation. Many of the rules were written during the early 00s, or in some cases the 90s, and these act as the building blocks of todays legislative and regulatory landscape. Think about how much the world and technology has changed over the last five years, let alone the last two decades. Anything written back then should be considered pre-historic.

Although it is a lot easier said than done, many of the rules which govern the UK need a revamp to ensure they are fit-for-purpose in the digital economy. Technology is infiltrated every aspect of our lives, from communications to privacy, through to banking and healthcare. If legislation and regulation does not reflect the evolving nature of technology, its features and applications in society, it is not serving its purpose.

Now the big question which remains is how many more drivers will appeal their own case using this ruling as precedent.