Digital Life

Matthew Webster

The recent decree by Ofcom (the communications industry regulator) that BT divest itself of Openreach, its infrastructure business (wires and telegraph poles), to help make us a ‘world-leading digital economy’, reminds me that we’ve been here before: we could so easily have had a superb universal internet service for years now had it not been for government interference two decades ago.

First, understand the technology. Telephone lines are made of copper and most people’s internet connection is through them. In internet terms they are mediaeval and we are lucky to get the speeds we do. In a perfect world, they would all be replaced with fibre-optic cables, which can transmit huge amounts of data at the speed of light.

About two per cent of Britain already connects that way, but the best most of us can hope for is ‘Fibre To The Cabinet’ (FTTC). Data-guzzling fibre-optic cables feed those green oblong cabinets you see on pavements and delivery to the cabinet is lightning fast, but (and here’s the rub) your computer is connected to it by copper wire, which acts like an anchor. The longer the wire, the bigger the anchor.

The tragedy is that we all so nearly had fibre-optic cables laid to our houses by BT, but this plan was thwarted when the whole market was liberalised and opened up to competition. Oh, the irony.

Even after it was privatised in 1984, BT had remained a de facto monopoly, but it was doing very well; it had thrown off a century of the dead hand of government ownership and by 1990 had become a highly innovative and successful company.

At that time, it could install optical fibre lines to homes more cheaply than copper wire, and so with great prescience (most of the benefits of the internet were unknown then) it set about doing just that. Factories were established in Ipswich and Birmingham to make the parts, and BT started rolling out a programme that would have made us a fully fibre-connected country, with all the advantages that would have gone with it.

Then, in about 1991, John Major’s government, believing that all monopolies are inherently bad, declared that BT should have more competition. It seemed like such a good idea at the time, as free markets are supposed to drive down prices and increase choice.

Unfortunately, the liberation of this marketplace had the opposite effect. BT was forced to stop its monopolistic national roll-out of fibre-optic cable, as it was deemed unfair on the (mostly) American cable TV companies that were to be given the chance to offer something similar. Some tried, but they couldn’t, or wouldn’t, make it work. Most either retreated or were swept up by the likes of Virgin Media.

This miscalculation meant that precious little fibre-optic cable was laid during that period and the likes of Japan and South Korea watched with slackjawed astonishment as they continued down the road that BT had begun and been forced to abandon.

The upshot is that we still live in a slow, largely copper world, while Japan, South Korea (and other countries, including Latvia) are entirely fibre optic and seeing the economic benefits. The Americans made the same mistake: BT’S equivalent, AT&T, was forcibly broken up, with the result that much of the US is even worse served than we are.

BT still has no national, countrywide competitor for installing fibre optics, and even if Ofcom’s efforts create one, it is still years away. It’s a shame that John Major unintentionally stifled the chance we had to be a world leader in internet provision. Without his efforts, it could all have been achieved twenty years ago.

and the national living wage is going up again.

Local authorities have bulk-buying power so can negotiate lower prices with care homes. According to Age UK self-funders pay £200 a week (£10,400 a year) more than local authorities pay for the same rooms. Care homes put pressure on self-funders to subsidise council-funded residents using various tactics. They might ask relatives to guarantee the fees if the resident’s assets fall below the £23,250 threshold, or include long notice periods if residents move out, or charge extra for entertainment even if the resident does not join in.

The question of how to prepare yourself for care home fees is complicated, whether you are planning ahead or facing them now, but here is a start.

The choice for paying immediate bills, aside from selling your house, is: 1. Pay out of savings and pensions. 2. Buy an immediate care annuity, which works like an ordinary annuity but there is little choice and, once you buy, you will not get your capital payment back.

3. To avoid selling your house, agree a deferred payment scheme with your local authority if one is available: the council pays your fees until you move out of the home or die, at which point your house is sold and the council collects the fees owed plus interest and administration charges.

4. Take out equity release on the house, though these schemes are expensive.

If you are planning ahead you can save, obviously, or buy a life-insurance policy that includes a care option that pays out when you need the money. There are few available. You can try putting your house in a trust but the local authority will claim you have deliberately deprived yourself of money and refuse to pay.

Remember to always check that you are claiming all the benefits you are entitled to.

These websites have detailed, reliable information on all aspects of care home fees. In the search boxes, enter the subject you are investigating, for example: self funding care home fees; means tests for care home fees; continuing healthcare; deferred payment agreements; or benefits for care needs. www.moneyadviceservice.org.uk www.ageuk.org.uk www.parkinsons.org.uk http://caretobedifferent.co.uk