Examination of Witnesses (Questions 240
WEDNESDAY 23 FEBRUARY 2000
240. One of the major problems that we found
was their ability either to have time to study regulations or
to understand them and to obtain the information on them from
(Ms Russell) Absolutely.
241. I think you were in on Professor Norton's
evidence. He said that he had 30 engagements in the next two months
to explain to people and everybody really welcomed it. Is the
answer, which would solve a lot of your problems, that there should
be one minister with a lot of clout and there should be 100 Professor
Nortons or people at a lower level that can go round and explain
to people in simple language, through Chambers of Commerce, through
Round Tables and so on what the regulations are, how they affect
them and where they are going? It seems to me that there could
be regulatory problems, but people have not even got as far as
studying whether there should be or should not be. Quite simply,
there should be forums set up throughout the country or visiting
people who can do it in an evening and people would know where
to go and how to get there.
(Ms Russell) This is exactly the heart of the matter
and the crux of the problem as far as I am concerned, which is
that SMEs and larger businesses do not have the time, they do
not necessarily have the resources to dedicate to this and when
they do try they come up against brick walls and unhelpful responses.
I put in my written evidence that there is a definite need for
business advisers who are government and industry sponsored and
who are independent of the vendor community, the Microsofts, the
IBMs, the HPs and so on of this world who have practical experience
and can give genuine practical advice on the issues involved in
e-commerce and also any regulatory issues surrounding that. That
is something which should be happening in the real world but also
be translated into an on-line environment as well and to create
an online environment which is properly promoted and easily available
and accessible for businesses and consumers alike to exchange
ideas of best practice, case studies and have forums where they
can put questions to advisers and have them sensibly answered.
The new breed of businesses which are being set up quite often
by young entrepreneurial individuals cannot just be done through
things like the Chambers of Commerce or the IOD because they are
irrelevant organisations for us.
242. You have to find a way of disseminating
this information, your businesses are vital to the future growth
and yet by the nature of your business it is impossible for you
to fully fathom out all of the regulations, it is not so much
for you supplying the use of your system so much as they must
have another forum from which they can go.
(Ms Russell) It is about creating a community where
people can exchange that. It needs to be advertised with a reasonable
amount of money spent intelligently in order to promote that and
not hidden away on some web site that nobody knows about.
Lord Cavendish of Furness
243. Over the last weeks we have talked about
the anxieties of e-commerce in terms of other things, drugs, illegal
pharmaceutical products, pornography and the rest, imagine, if
you will, indeed, if you can, that I am a pop singerI cannot
see why people are laughingand I have produced a new album,
which goes on the market in the normal way this afternoon and
tomorrow I find that it is valueless because it has been stolen,
as I am told is technically possible, and downloaded all over
the world. What we have had from time to time is that this is
an ordinary crime, this is stealing of copyright, it is not Internet
specific, it is something to do with "globalisation makes
it spread". Are we concentrating too much with all this regulation
on trying to think that there is something special about the new
world and really one ought to go back to basics and say, this
is an ordinary crime. It should be possible, after all, to insertwithout
people noticinginto my music a signature which could be
then traced or whatever. Deal with it as society dealing with
a theft rather than some highly technical matter.
(Ms Ussher) May I speak on this one? I would look
at this completely the other way around. My starting point is
that this would not be a crime. I do not want you to be put off
at this point by thinking I am some sort of hippie in a basement.
244. I am losing my money here.
(Ms Ussher) When it comes to the music industry, that
industry is based entirely on distribution. In the current distribution
model there are shops on the high street where you buy your CD,
and we are increasingly seeing popular consumer preference for
a web site. This is the very, very beginning of a massive shake-up
in distribution. If you think about it, that is what the Internet
is all about. It is about the redistribution of information. If
that information is music in a new format then so be it. With
your example of the pop star, certainly the record companies would
see it as a crime but, perhaps, it should be turned around and
you should be asked, how are you going to handle this? What are
your new distribution networks going to be? Yes, you could certainly
have things like digital signatures, perhaps, so that once somebody
has bought something on-line their ID can be impregnated into
that code so if somebody else is using it then music companies
know about it. On the other hand, perhaps, the recording industry
should be working out how to distribute material on-line.
245. Is it capable of being worked out?
(Ms Russell) There are solutions available today.
(Ms Ussher) As a starting point, judging it as a crime
is the wrong way to go about it. You are going to get people's
Lord Faulkner of Worcester
246. Can I ask about personalisation? What does
it do, what are the benefits of it?
(Ms Russell) In terms of how our web service works
it is an on-line user information service. In order for it to
be personalised the user has to give a certain amount of information
to us. They are in control of giving us this information, we tell
them what we want.
247. It is bit like joining a club, an electronic
(Ms Russell) Yes. They give their name, job and title.
It is to do with their current professional status, job title,
industry, science and then they can say, "I am interested
in getting all the stories and information on e-commerce and some
key vendors that they work with", so they might type in IBM,
Microsoft, and so on, so when they come into the service those
pieces of information are flagged up which are personalised to
them. In terms of how our system works we can cut and dye whatever
way we want, we can just have a section where they have their
248. What you are doing is selling their data
to other people who want to sell to them? It is not intended to
be an insulting question, I just wanted to be clear.
(Ms Russell) That is one element of our business model
from a user point of view. It means that rather than you buying
all the newspapers it is you saying, I am interested in X, Y and
Z and you get all of the clippings passed to you which are relevant.
We do that electronically but it is a content which we have created
ourselves about the IT, Internet and e-commerce industries. From
a commercial point of view, for instance, if they said they do
not mind their information being passed on to third parties we
can provide that to our advertisers. The other way of looking
at it is they are making an active response, they are responding
to an advertisement on the site and they are choosing to do that.
We have conducted huge amounts of qualitative and quantitative
research on the benefit to users and what they do and do not like
about it. Personalisation is their number one favourite because
it saves them time and gives them information about what they
need and the way they need it.
249. Many years ago somebody who I knew used
to collect press clippings on particular topics and I was interested
in tax and I used to get great press clippings on anything that
happened on tax. It is really that on-line.
(Ms Russell) Yes. It is more than that, it learns
what you do and learns what your habits are. Quite often what
people say they want does not actually reflect what they do.
250. Can I turn to the paper which came from
Miss Ussher which, I must say, I found very interesting indeed.
It is quite understandable, and one of the things that struck
me when I was reading the papers is you are suggesting that we
should do it in Europe and actually that we do not do it in the
United Kingdom already or we do it rather badly. Often we find
in Europe the way you get developments in Europe is not pitching.
It is up there immediately, it is a brand new idea and you try
to get some experience of working with it on a national level
and then persuade others you have a good model and you should
embrace this. I was wondering whether some of the topics that
you have listed, whether you actually run them with the Governmentit
is a pity Professor Norton has departed because conceivably some
of them could have been put to him, for example, on socially excluded
(Ms Ussher) It is not something I have
put to Government yet. I have been following business and government
issues now for two or three years with regard to IT. These are
not issues that have come up at all. I have not yet had a chance
to meet with the e-Envoy, but I will be putting these views to
him. Certainly in terms of the sort of material that Government
has released over the last two or three years, these things are
not taken into account. I hope to get the opportunity to raise
251. My next question was following through
on the issue of the socially excluded group. You were talking
about them being disenfranchised in the sense of the way they
handle cash compared with what an increasing number of people
do, which is electronically and through the banks. Have you thought
about social banking?
(Ms Ussher) What do you mean by that?
252. We have no specific banking system set
up to provide for people who normally do not get the credit ratings
which attract the big five, for example and there is an argument
they run that perhaps we could have a new bank created which would
be more open and more willing to embrace people who normally do
not attract themselves to the big banks. Who would fund that is
the big question.
(Ms Ussher) Who would take on the risk is a massive
question and is that risk going to be subsidised, is it going
to be taken on by a commercial partner. There are business models
emerging online to do with taking on risk. Equifax is getting
involved in this. They are a credit rating service themselves.
In November last year they launched a service whereby they could
take on the risk of an online trader selling things which should
only be sold to adults. Equifax was prepared to step in and say
that they would take on all legal responsibility that the consumer
was over eighteen. This is an emerging model. It is also a data
protection issue. Equifax is saying that they will bounce any
details of the transaction on to their site, check it against
all their own records of the consumer and check if they are over
eighteen. The taking on of risk would not necessarily mean that
the social banking could not happen, it would just have to be
thought out in greater detail.
253. You said it does not seem quite fair that
if your credit is not stable this will effectively prevent you
from taking part in e-commerce. The question is how do you put
that right and do you put it right within the context of the UK
first or within a European context?
(Ms Ussher) The easy way round that which avoids the
entire issue is what is happening in Belgium at the moment, with
their Proton scheme. They have public terminals where you can
load electronic currency onto a card from cash and you do not
need to have any sort of credit authorisation at all, which looks
like quite a simple side step.
254. It is like Switch cards, you pay up front.
(Ms Ussher) Yes.
Lord Cavendish of Furness
255. I find your paragraph about the socially
excluded very worrying and I am particularly worried that even
people one knows of who are on the edge of not coping are going
to get worse off and understand less and be more bemused by the
world. Over the last week we have heard from the American contingent
that the levels of growth there have cascaded for that and other
reasons to a sharp reduction of the underclass. I put it to you
that there may be a reversing in Europe with legal and illegal
migration and with the really quite under-developed countries
coming in or being neighbours in Europe. Might there be a really
vast underclass developing without the growth that the United
States currently has and looks like having for some years to come
and really leading to some fairly dreadful social divisions which
can be faced up to by nation states and the European Community,
and could that be addressed through education which would then
have to go through revolution where a life skill would be e-world
generally rather than things which currently are not encrypted
at the moment?
(Ms Ussher) I am not up to speed on immigration but
I take it that it will make the current problem worse. It is certainly
my opinion given the way things are at the momentwith the
commercial drivers within the IT sectorthat the social
divides will get much wider. Some of the reasons for this I outlined
in my written submission, but there are many more. Already you
can get cheaper prices for goods and services online. It is to
do with access online, it is to do with IT literacy. It is due
to a massive range of things which, if you want, I can keep you
updated with, as the pamphlet develops. In terms of rectifying
the situation, I think the problem of access will be sorted out
partly through existing education targets such as e-Europe but
also through the development of the mobile phone platform which
is already a lot more socially diverse than PC penetration. I
think it is in the commercial sector's interest to enable as much
internet access as possible so to a large extent we can calm our
fears, because companies will be addressing as many of them as
possible, themselves. The problem that I am mainly concerned about
is the content that socially isolated and poor people are going
to find once they get online, because if it is all to do with
sales and retail and things that already assume a fairly high
standard of living, then what good is that to them? One of the
main proposals I am going to put forward is that the EU takes
on a new role in this and becomes an information supplier in itself;
that its role is not limited to sharing best practice and putting
forward Directives for implementation; that it supplies not only
the content that people are going to need online but also the
technical expertise, software and programs. I do not know how
many of your Lordships are familiar with the open source movement?
256. I was going to ask you a bit about that.
Could you give us a bit more information?
(Ms Ussher) Before big businesses moved onto the Internet,
most of its development was done through the open source movement,
which basically means that a technical developer will write a
program, use the program and then post all the code for the program
online so that other people can use it for their own purposes.
This is why the whole Web phenomenon happened so fast, because
it was all about the sharing of expertise. The open source movement
is still going although it is more on the very technical side
of operations. It has had some commercial success with an operating
system called Linux, but it has pretty much been sidelined by
the success of Microsoft and other corporations. Most of my research
so far has been with charities and community groups and they are
all crying out for very, very basic tools. They all want to be
able to write a database to communicate with other people working
in the sectorreally simple sorts of things but things which
require short scripting languages. It seems to me that the EU
could be providing those resources in open source and if they
did so then it would guarantee a basic level of IT literacy right
across the region.
257. We heard from the Americans earlier in
the week about how the US government department had recently re-tooled
and they had given away the whole of their IT kit which was now
"redundant" to a charitable organisation. Does that
happen here with government departments? Have you asked government
departments to do that? Have the charities asked government departments
to do that? It seems that Europe is a long way away from doing
that when it might appear that we are not even doing it in our
(Ms Ussher) Are you referring to hardware equipment
(Ms Ussher) As far as I know the Government is not
involved in it, but there is a dynamic going on whereby more and
more charities are starting up that recycle hardware, and more
and more businesses are being alerted to the fact that rather
than throwing away their old computers when they upgrade, they
should pass them on to these charities, and that is happening.
Although more and more computers are being donated, the training
issue remains a problem in the UK.
259. What about the UK open source access?
(Ms Ussher) In the sense described above, it is absolutely
non-existent. There are, however, some unpublicised web sites
which act as a forum for open source developers.
Baroness O'Cathain: Can I make an observation?
I was driving home quite late last night passed an Easy Everything
cafe or an Internet shopit was on the Strand or somewhereand
it was choc-a-bloc. Every single one of those stations were being
used by people, this was really quite late, about 11 o'clock last
night, and I came passed again this morning, very early, and again
a lot of people were there. It could well be this is an opportunity
for business to use part of their community budget, which all
charitable and community minded companies have, in this way. It
is an idea because it would create access opportunity. It would
help rectify the problem of creating the big social divide that
you described. I can buy things on the Internet a lot cheaper,
books, for example, than somebody who does not have access to
a computer and does not know anything about the Internet. Generally
speaking they are people who can ill afford to buy them at full
price. I think you are absolutely right. On the subject of the
training issue, maybe there is something that can be done, that
if they can somehow marshal support