First of all, I'd like to thank Valerie Darroch at Scotland on Sunday for the chance to speak to you this First Tuesday evening (like this week, I'm glad we could miss out the Monday :-) I was lucky enough to get the chance to work regularly with Scottish Enterprise and the Internet Society in Scotland last year to get Scot-IX, our national Internet Exchange Point, up and running, and it is always a pleasure to have an excuse to come back home.

Using the Internet to grow e-Business is an older idea than you might think - and by no means alien to Scotland. Over a decade ago I was fortunate enough to work for a Scottish-based company which was successfully turning the latest Internet technologies into world-class products. This was before the Internet had reached this country, and long before its potential to radically overhaul all aspects of life including commerce had even been visualised.

But the value of common, open technical standards, a universal language for all computers, developed by the co-operation of the widest interested community was clear even then. And that is the key foundation upon which today's e-Commerce boom is built.

Although that company is no longer with us, l am pleased to see the worth of its contribution recognised recently by the sale of one of its children, Spider Software. There is a lot of data being shipped around the world today by "Leith-built" Internet code :-) And working there gave me an important stepping-stone to setting up the UK's first commercial Internet Service provider, PIPEX.

We started PIPEX in 1991 (when there was an Internet, but no Web yet) on what by today's money and standards was a shoestring - one 64k leased transatlantic circuit for the grand sum of £50,000 per year, run by four people. And this was wholly funded by our not-too-large parent company Unipalm. I remember well the resistance of certain financial institutions to even becoming customers of this dodgy Internet thingy back then.

Only five years later it was sold for £50M, and you could buy access in any high street Dixons. Ten years later almost every financial institution has bought in big-time.

I think the key lesson of the PIPEX days was about coping successfully with rapid growth, and behind this are principles important to any e-business today:

• Management
• Investment
• Innovation
• Skilled people

All are critical elements of any technology-based service business - the key balance is to neither overdo any of these too early, nor starve the business of them for longer than is absolutely necessary. And when things take off and you have to start riding that exponential Internet growth curve, they need to be applied with a shovel !

A decade later the PIPEX beginnings, we are fortunate in the UK to have one of the best-developed and most successful e-commerce industries in the world. While Britain's track record as a trading nation and creator of intellectual property are major causes of this, there are two other factors:

• the first is about the regulatory climate,
• the second is about infrastructure

From a regulatory point of view, there has been a generally enlightened approach from both the current and previous UK governments, and in many ways early deregulation of telecoms has led Europe and benefited UK industry (and the treasury :-) enormously. It is good to see the government's support of e-business through the presence of here today, and at UK level the appointment of both an e-Minister & e-Envoy.

But, actions are as at least as important as stated intentions and their spin, and there is significant danger in two sets of impending legislation, on communications interception and on unsolicited e-mail, which in their current form threaten to place a disproportionate burden on Internet providers and their customers and to make the UK a much less attractive place to do e-business. Internet providers know well that consumers appreciate neither "snooping" nor "spamming".

But, the Internet is about more than politics - I am fundamentally an engineer, and what I know best about is infrastructure. So why is infrastructure important to fledging dotcoms (or indeed DotScoDotUks :-) ?

The UK sits very much on the Atlantic edge of Europe not just from a regulatory point of view, but as the first best place where the international submarine data highways land. All this makes the UK not only the logical place to connect America to Europe, but increasingly other parts of Europe to each other. At the London Internet Exchange, LINX, we have been in the right place at the right time and with the model which has allowed us to be instrumental in this growth.

Although not-for-profit, we now have the largest Internet Exchange Point, at the convergence of all these international data highways, not just in Europe, but anywhere outside the US. We can legitimately claim to have the role and importance of the "Heathrow Airport of the Internet", and like any port, trade in and around it is booming. Nor do I need to remind a roomful of airport users of the importance of providing a quality, reliable and uncongested service.

There are three important consequences of this:

• First of all, the UK has the rest of Europe paying for the expensive data pipes to get to us, giving UK e-businesses an important economic edge in terms of the cost of selling to the globalised cyber-market.
• Secondly, the LINX's role in keeping UK to UK (and Scot-IX's role in keeping Scotland to Scotland) Internet traffic off these costly international pipes provides cheaper access for providers and their business & consumer customers.
• And finally, our leading-edge gigabit switch technology ensures the fastest possible connections across the UK Internet backbone. This will become increasingly important as consumers' expectations are fired up by the much faster ADSL access nearly with us.

Where is Scotland in all this ? It may not have escaped notice that the Forth Valley is the narrowest point in the UK's position on Europe's Atlantic edge, and that our skills at commerce and engineering so essential in today's Internet are key strengths. That is why we felt it so important that Scotland had its own Exchange Point, Scot-IX, to act as a focus for the essential infrastructure needed to fully exploit Scotland's e-business potential, and that it should be built from the same spririt of co-operation between competitors that has been so successful at the LINX.

As a result of this community activity, the runway is constructed, the domestic Telecomms carriers' flights are arriving, and co-location companies like TeleCity and ScoLocate have invested in and nearly completed the terminal buildings - the time to put the duty-free shops in is already.

And what of the future ?

• For infrastructure, the next stage is clear - we need to get what are the Internet's direct international flights, namely the submarine fibres, landing on Scotland's coast in place.
• For e-commerce, it is an exciting and challenging time. It is clear that the current e-boom is part genuine underlying change in how to do business, and part overstated hype, and a lot of fortunes are still to be made or lost in exactly where that boundary lies. The recent market downturn is perhaps doubly unhelpful in a part of the world where investment for high-tech startups has been traditionally difficult to obtain.
  
  However, as I stated at the beginning, the thriving efficient competitive market that is today's Internet is built upon the solid foundation of a proven model for co-operation that extracts maximum value for everyone's investment. In Scotland we have a strong tradition of combining the values of community with those of free trade, there is an natural match and the prognosis is a good one.

Questions ?