Cameron's Porn Filter - The Real Winners

Matt Baxter-Reynolds explains that the only ones who will benefit from Cameron's proposed porn filter are the companies providing the actual filters themselves.

Image: Cameron Portrait by Thierry Ehrmann via Flickr (CC BY 2.0)

There are myriad problems with David Cameron's porn filter -- as an idea it's doomed to failure and does nothing to address the underlying problems. The only ones who will benefit from such a scheme are the vendors that build the software that makes it all "work". And, oh my, what a gravy train it is. 

MARKETS: Overnight, the government's proposal creates an enormous market for providers of such systems. The ONS this month reported that 21 million households in the UK have internet access. This arrangement is all upside to the vendors. Here's why:

* If you've ever sold computer systems, you'll know that a "21 million seat license" is beyond vast. As I'll come onto, it favours slow-moving, lacking-in-innovation companies with lacklustre products.

* The requirement for these systems will be written into law. Everyone has to buy something, so if you're one of the two or three in the running this is looking like a very safe business indeed.

* Only already established vendors will make it in. Remember, the ISPs won't care about this system -- it's not profitable, nor does it create distinction in the market. They'll be looking for the safest bet, which means the one with the best case studies and references.

* Because it's written into law, once you're in, you're in, unless they change the law.

* There will be no incentive to the customer (the ISP) to change you once you're in. Again, the ISPs don't care about this. Unless you're actually hurting their customers, no one is going to swap you out.

RULES: As technologists we know that internet filtering of this type is impossible to pull off with any finesse. The best that we can hope for is a blacklisting approach that doesn't create too many false positives, and that doesn't cut off genuinely valuable, mislabelled sites that don't take into account the entire remit of the human condition. (Classic example here is the unavailability of LGBT support sites to young children working to understand themselves.)

This system won't be a profit centre for the ISPs either -- they'll be looking to pass on the smallest amount possible to their end customer. The negotiations will go something like this, with the ISPs saying: "we have to implement this thing, we don't really care about it, what do you have that just about works?" So vendors will be pressured into providing the most basic system that they can, whilst maximizing the on-going revenue from that system. What's a good price for this? If I were selling it, I'd be looking at £6 per household per year, which gives rise to a £126 million-per-year market.

If we assume £10-£15 per household for broadband, that adds 50p per month. Yes, that might get absorbed at the start, but it'll certainly get passed on as prices organically rise. The market will certainly stand that sort of spend, even if it seems astronomical. But that's the point -- for vendors of this sort of system, Cameron's porn filter is like winning the lottery every year.

Large-scale, competitive markets follow the 'Rule of Three'. Simply, this states that there tends to be three, large, incumbent competitors in any market. This means we can expect three companies to enter the UK market and carve up the ISPs between them. The largest one will most likely snaffle 50 percent of the ISPs. As it'll likely be the most successful competitor, they'll get the biggest ISPs and have the lion's share of BT, TalkTalk, Sky, Virgin Media, and EE. That one competitor will - by definition - have a significant share of the actual households.

Let's assume the best competitor nets 80% of the households, based on the 80:20 rule (the Pareto principle), that suggests the big winner in this will be looking at a £100 million-per-year contract. All for providing the most basic system possible. ...That won't work. Does that seem high? Perhaps. But then, it'll be the households that are paying for it, not the ISPs.

Matt Baxter-Reynolds is a mobile software development consultant, mobile technology industry analyst, author, blogger, and technology sociologist with 20 years experience in server-side and mobile client software development. Read his blogs at ZDNet and The Platform. Or you can talk to him on Twitter.