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So here's the wonderful news: the UK is one of the most digitally active countries in Europe – even the world. Ofcom's international comparison shows that we're the third-ranking country for broadband connections (26%, behind the Netherlands, at 35%, and Sweden, 31%), second for time spent online (nearly 14 hours per week, behind 15 hours for the US), highest proportion of online advertising spend (19%), biggest availability of mobile broadband, more social networking than other countries ... we're all mad for the internet, aren't we?
The important next question, though, is: will we be able to stay in this position? And does it matter? OK, two questions.
The reason why we're all so internet-wise are varied. First, we were predisposed towards computers and games: the UK used to have a vibrant set of computer manufacturers, especially home computers (why, even Sir Alan Sugar's Amstrad used to make them – though sadly, no longer). Lots of those computers were used to kick off a similarly vibrant British computer games industry. And we benefited from the comparatively early opening up of the mobile phone market to real competition in 1993 with the arrival of Mercury.
But Britain lagged in the internet. We had the computers, we had the mobile phones (and the promise – but not the reality – of high-speed mobile internet connections after the mobile companies splurged £22bn in 2000). But we didn't have fast internet connections. That was because BT was then using a strange system where people had to show an interest in getting a broadband connection; if enough showed interest, that would "trigger" the upgrade to broadband.
Then abruptly in April 2004 BT abandoned triggers, and simply began enabling exchanges everywhere. The effect was dramatic. In May 2002, dial-up use peaked; and only one-third of internet users could get broadband even if they wanted it. By May 2005 – just 13 months after BT abandoned triggers and just accepted the cost, in the expectation of steady revenues – more than half of all internet users were on broadband. Even by internet standards, that's dramatic. And from fixed broadband comes the desire for mobile broadband, whose growing popularity has at last allowed the mobile phone companies to start earning back some of that £22bn. (I feel I'm about the only person in my social group who hasn't got a 3G dongle to be ostentatiously pulled out on boarding the train in the morning.)
All this strikes me as good. But the next step is less certain. The suggestion is that next we need really fast internet, faster than the slightly-higher-speed broadband that BT is presently rolling out – see the map.
The slightly-faster rollout hasn't got a price tag. It will only boost speeds up to a maximum of 24 megabits per second (three times faster than the usual BT maximum, of 8Mb/s; but people on the average speed, of around 4Mb/s, won't see any change).
What we're really talking about for the future is superfast broadband running at 100Mb/s. That would provide the sort of boost that we all need – that it will give really useful two-way videoconferencing, "social inclusion for disabled people through new ways of communicating; and new ways to access public service content and information, including health and education information".
No, really, it is more interesting than that. It means that you wouldn't have to travel so much. And in a world – which is coming, never doubt it – where oil costs $300 per barrel, not travelling will seem like a good idea. It will mean that anything that doesn't require actual atoms to be moved around will become possible.
Here's the question, though. Who will pay to get it installed? Eventually, of course, we – the users – will pay for it, through the fees we pay and the hours we spend on support lines listening to Greensleeves. But in the first place, who's going to pay to dig up the roads and install very expensive high-speed fibre? BT is chary of doing it if Ofcom won't lift its regulatory restrictions. And it is also facing the credit squeeze that all other big companies are: it's hard to raise the money in the "commercial paper" market (effectively, short-term loans from multiple sources).
My feeling is that BT is going to hold back from spending on fibre for as long as it can; the longer it holds off, the cheaper fibre should get, and the cheaper (in effect) it gets: project costs put off into the future are always less than doing them now, in accountancy terms.
The upshot? I think we're going to repeat it all over again. We'll have pent-up demand, and a telecoms incumbent that holds off investing in jam tomorrow in preference to bread today – until something prompts it to reverse completely, at which point we'll grab it with both hands and make the most of it. Ten years from now, perhaps we'll be reading another delighted Ofcom report saying how the UK has leapfrogged other countries in its adoption of videoconferencing as a means of visiting elderly relatives and watching debates in the House of Commons.
Well, we can but hope.
Verizon, one of the biggest telephone companies in the US, today apologised to the president-elect, Barack Obama, over a security breach involving his phone bill records.
Lowell McAdam, the president of Verizon, issued a statement saying: "This week we learned that a number of Verizon Wireless employees have, without authorisation, accessed and viewed President-elect Barack Obama's personal cell phone account."
All staff who accessed the account, whether authorised or not, have been put on immediate paid leave pending an inquiry.
Verizon and Obama's team said that the cell phone had not been active for months.
Obama's spokesman, Robert Gibbs, said Verizon had informed the Obama team that his phone records had been improperly accessed.
Gibbs said the records could have shown numbers and the frequency of calls but little else.
Verizon has yet to establish why some of their employees allegedly sought access.
McAdam said: "Employees with legitimate business needs for access will be returned to their positions, while employees who have accessed the account improperly and without legitimate business justification will face appropriate disciplinary action.
"We apologise to President-elect Obama and will work to keep the trust our customers place in us every day."
Carphone Warehouse is planning to introduce an emergency TalkTalk broadband tariff to help customers struggling to pay their monthly bills as the economic recession bites across the UK.
Thousands of job losses have been announced in recent weeks and many of those who lose their jobs are white collar workers for whom the internet has become a crucial resource in the search for work.
"I think we have an obligation to customers because broadband is an essential part of life for many people," said chief executive Charles Dunstone.
"I got an email from a customer, who we were cutting off, who was going through a redundancy and having everything repossessed and I suddenly thought we should not be doing that to people."
Last week he instructed the TalkTalk team to come up with ways in which Carphone Warehouse can help consumers who find it hard to pay their broadband bills, rather than merely cutting them off.
Dunstone described the plan as a "parachute". Details are sketchy, but it could allow customers to take a payment holiday or reduce payments in return for a downgraded service, such as slower broadband or a bar on free international calls.
"I do not know when or exactly what the proposition will be but we ought to be thinking about our customers at this time," said Dunstone.
The hope is that the emergency tariff could be introduced early in the new year, when many people will be counting the cost of the festive season.
Carphone Warehouse is not immune to the economic downturn. Shares in the company plunged earlier today after Dunstone said its high street stores face their toughest ever Christmas, but refused to give details about how bad it might get. The company's shares closed down 12.25p at 118p.
"Clearly the retail market is incredibly difficult, predicting Christmas is incredibly hard," he said.
The second half of the year accounts for 60% of Carphone Warehouse's retail sales - and slightly more of its profits - while Christmas is dominated by sales of pre-pay phones given as gifts. Pre-pay sales, however, have been down year on year in the past few weeks, having been stable for much of the first half of the year.
They suddenly shot up last week as Nokia launched a multi-million pound advertising campaign for its 5310 handset, a pre-pay music phone that comes with unlimited track downloads.
"You just cannot put what is happening on the high street right now into an Excel spreadsheet, it is so complicated," said Dunstone. "Normally when there is a crisis the people who know the least are the most frightened and the people who know the most are the least frightened, because they understand what is going on. At the moment, the people that I know who know the most are the most frightened and the people who know the least are the least frightened. That is quite a bad dynamic."
Economists estimate the recession will last through next year and the economy will start to recover in 2010.
Some in industry, however, are not convinced. Ian Livingston, boss of rival BT, said recently the recession was likely to last at least two years. Dunstone said he had no idea how long the downturn would last but, with its strong balance sheet - following its deal in the summer with US-based Best Buy - Carphone Warehouse was well positioned.
"For a lot of retailers now, it is about staying alive and the people that are standing at the end of this are the people that will prosper in the future," he said. "If anyone can survive it should be us"
Carphone Warehouse is to consider demerging its TalkTalk broadband business from its retail operation.
The group's chief executive, Charles Dunstone, will use tomorrow's interim results to update the City on the group's strategic direction. He is likely to float the possibility of splitting the group into two, although the company is unlikely to rush into a demerger, given the turbulent state of financial markets.
Many analysts believe Carphone could release value for shareholders by splitting its two standalone operations.
The different character of the two arms of Carphone's business was underlined this year when the retail division entered a joint venture with the US electronics retailer Best Buy.
Since then, amid the worsening economic climate, the shares have headed rapidly downhill, knocking it out of the FTSE 100 in September. At the close of trading on Friday night the business was worth £1.3bn.
Analysts have suggested a demerged TalkTalk may be worth up to £1bn and there have been rumours that the business would be sold to Vodafone.
Dunstone hinted at a demerger himself in an interview last month. "I'll do what's right for the business," he said. "There is, however, less and less reason for the telecoms and the retail business to be together."
He added that he and the company's major shareholders thought a separation of the businesses could work.
Dunstone co-founded Carphone Warehouse in 1989 with only £6,000 of savings, running a small shop on London's Marylebone Road, and grew it into Europe's largest independent retailer of mobile phones. He launched TalkTalk in February 2003.
TalkTalk revolutionised the broadband market two years ago with the launch of "free" access tied into phone contracts and has become the third-largest broadband player after BT and cable company Virgin Media.
Speculation about a demerger was sparked in May when Carphone announced that Best Buy would take a half share in its European retailing business for £1.1bn. The deal - struck before the economic downturn really began to bite - allowed Carphone to reduce debt.
The companies plan to open electronics stores on British retail parks to challenge the likes of Currys, Comet and PC World. The first outlet is due to open in the first quarter of 2009 with plans for 100 stores across Europe within five years.
But the speed of the launch could be affected by the recession, after Best Buy warned last week of the toughest trading conditions in its 42-year history.
Carphone has been affected by the downturn in consumer spending, in common with all retail businesses. In its most recent trading update, last month, it warned that the immediate consumer outlook was "very uncertain" but said it will work to increase its share of spending in the run-up to Christmas. The group said it was "well placed to ride out the downturn and emerge in an even stronger position on the other side".
The group's interim results this week are expected to show a decline in first-half pre-tax profit. A spokesman for Carphone Warehouse declined to comment.
In part, British consumers are to blame for the thousands of job losses announced this week in the communications industry. Our clamour for ever lower telephony, mobile and TV bills has created a price war among some of the country's biggest brands.
According to Ofcom's 2008 Communications Market report, the average monthly household spend on communications - which includes TV, mobile and broadband - has dropped from £97.94 in 2004 to £93.63 in 2007. That may not seem like much of a decline, but in the same period the number of homes with broadband has grown from 5 million to more than 14 million while mobile phone penetration has gone from 99.5% of the population to 122.6% - as many people have more than one SIM card - while the number of minutes we spend chatting on a mobile has ballooned from 64bn in 2004 to 99bn last year.
The British consumer is getting a lot more services for less money and that has led the likes of Vodafone, Virgin Media and BT to rein in costs.
Fixed-line telephony pricing has been hardest hit, which is why BT has been so desperate to move into new areas such as TV and corporate IT. This has paid off, but calling still accounts for more than 10% of its business. The price of BT's all-you-can-call phone package - which used to be called BT Together Option 3 and is now BT Anytime - has dropped from £17, plus line rental, a month in 2003 to £4.95 today. And the decline is accelerating - the package cost £14.50 plus line rental in June 2006 - as people switch the bulk of their calls to their mobile phone. Calls in the evening and at weekends on BT are now free, something that would have been unheard of a decade ago. Even two years ago that call plan was £6 plus line rental.
Shareholders obviously want to see a return from BT, which is why it is wielding the axe, but the consumer is by no means an innocent bystander in these jobs cuts.
