What if bandwidth was the new oil?

As the credit crunch continues to bite, those of us with long memories will recall the days – not too far in the past – when the UK had some of Europe's cheapest fuel prices.

The triple whammy of taxation, investor speculation and supply restrictions have put paid to that, and we now have some of the most expensive energy prices in the world. Worst of all, we're powerless to do anything about it, because we're addicted to oil.

While our oil habit continues to cost us dear, we're busily establishing another addiction. This time, it's bandwidth. The combined cost of broadband, home phones, cable or satellite TV and mobile phones can easily outstrip our energy bills, and our connected lifestyle is making these services essential. Is history repeating itself? Will our internet addiction become as costly and as dangerous as our addiction to oil?

Columbia Law Professor Tim Wu recently asked readers of the New York Times if they thought that bandwidth was the new oil. "Just as the industrial revolution depended on oil and other energy sources, so the information revolution is fuelled by bandwidth," he wrote, concluding: "we need to develop alternative sources of bandwidth."

Of course, bandwidth isn't controlled by sheikhs or delivered in trucks, and we're pretty sure that the US won't invade a sovereign nation to seize control of its cable TV network – but that doesn't mean that there aren't striking similarities between oil, gas and bandwidth.

Like oil and gas, all kinds of businesses depend on connectivity for their very existence, and like oil and gas we probably won't abandon the internet or stop using phones if prices rise – especially now that online access is an everyday utility that we use for everything from shopping to banking.

Most importantly of all, our connections are in the hands of a small number of producers whose aim is to maximise their profits, something that's often incompatible with doing what's best for the general public.

Take BT, the gatekeeper to most of our communications. BT's rollout of faster broadband won't be finished until 2012, and even then it'll only reach around 10 million homes – of which only a small proportion will get fibre to the home, the fastest connection currently available.

If such connections were everywhere, they could well usher in a whole new era of ecommerce and online entertainment, generating billions of pounds in revenue and big wads of cash for the Treasury. However, it's not BT's job to consider the wider economy.

It's BT's job to consider what's best for BT and for BT's shareholders. The same applies to BT's main rival, Virgin Media, which has hoovered up the UK's cable ISPs to create a monopoly on the provision of cable broadband services.

Traffic wardens

The people who own the pipes can dictate what goes through them. Many ISPs use traffic shaping and port blocking to slow or prevent the use of services such as file sharing, and mobile networks often prohibit file sharing and usage of VoIP – which is essentially a free alternative to their service. So the prospect of network operators limiting or blocking access to anything that they don't like isn't that far-fetched.

In fact, it's not far-fetched at all. In April, Virgin Media CEO Neil Berkett said "this net neutrality thing is a load of bollocks", and revealed that the ISP was in talks with a number of content providers about paying to have their content delivered more quickly.

Berkett also suggested that public service broadcasters would have their traffic relegated to 'bus lanes' if they weren't willing to pay up. While BT takes a neutral stance, a number of ISPs want the BBC to help fund the network upgrades that they say they need. For now, Ofcom is taking a hands-off approach, and while the code of practice agreed between Ofcom and ISPs does cover traffic management, it simply says that ISPs who use it should mention it on their website.

The risk of telcos and ISPs controlling traffic is certainly something that Google is taking seriously. The firm has sunk large amounts of money into wired and wireless capacity in the US, as well as high-capacity undersea cables. That's partly for its own internal transfers between data centres, but it's always handy to have your own network if the telcos start demanding money with menaces.

If unrestricted, fast internet access is something we need, then perhaps the solution is in expanding the USO, the Europe-wide Universal Service Obligation that means that every EU citizen must be able to get a landline if they want one.

It doesn't cover broadband, but it could – and if it offered financial sweeteners to providers while mandating net neutrality, it could deliver unfettered high-speed access to everyone.

First published in PC Plus, Issue 276