Network: Best in the world? No, worst in EC

The cost of a UK call is leaving us all on hold.

THE EUROPEAN telecommunications industry is gradually waking up to the fact that the continent's Internet access is too slow and too expensive. The Department of Trade and Industry has stated that it wants the UK to become "the world's best environment for electronic trading by 2002". However, the development of e-commerce in the UK - and of Internet use in general - is hindered by the cost of telephone calls and the low rate of download speeds.

Consumers in the United States can spend hours browsing e-commerce sites such as Amazon.com because their local phone calls are free. But in the UK, and the rest of Europe, calls are charged by the minute, which means that people surfing the Web have to limit the time they spend online.

US Internet users can also make use of high-speed connections provided by new technologies such as ADSL (asymmetric digital subscriber line) and cable modems. BT has been conducting trials with ADSL for months, but doesn't seem to know what to do with it. ADSL generally operates on a flat-rate payment system, with a single monthly subscription providing unlimited use of the Internet. BT has grown fat on per-minute charges and is reluctant to undermine its profits.

The UK's cable companies were set up primarily to provide television services, but they've been hindered by the success of satellite TV. A spokesman for Cable and Wireless confirms that "we're totally focussed on digital interactive services".

However, there are signs that the cable industry is starting to concentrate on the Internet at last. This month, NTL, the UK's third-largest cable company, becomes the first to provide a high-speed, flat-rate cable modem service. The initial cost of the cable modem will be about pounds 150, with a monthly subscription of pounds 40, which also includes cable TV and line rental for a telephone.

Once the cable modem has been installed, your PC is permanently connected to the Internet, so you can surf the web for as long as you want without having to worry about per-minute phone charges. The cable modem is also much faster than current modems, and NTL says that it aims to provide a minimum speed of 256 kilobits per second. That's more than four times the speed of a 56K modem and twice as fast as BT's Home Highway ISDN service, which costs pounds 27 to pounds 40 per month with per-minute charges on top.

However, in continental Europe there is a much more ambitious scheme under way to provide a mass-market cable modem service. A company called chello broadband has established a vast fibre-optic network across Europe that it calls Aorta and has signed deals with cable companies in several countries allowing them to connect their own networks.

The chello service was launched in Belgium in February, and is now available in France, Norway, the Netherlands and Austria as well. The service provides modem speeds of up to 300k, and costs 40 euros ( pounds 25) a month. The company forecasts that there will be half a million cable modems in use in Europe by the end of this year.

Both Telewest and Cable & Wireless confirm that they are planning cable modem services for the year 2000.

Hopefully, this will spur BT to roll out its rival ADSL service more aggressively, and create some real competition in the Internet market. Perhaps then the UK will catch up with the US and the rest of Europe at last.