Former Digital Britain minister Stephen Timms has told V3.co.uk that the transfer of telecoms policy issues from the department for Business, Innovation and Skills (BIS) to the Department for Culture, Media and Sports (DCMS) is a "serious error".
The reshuffle was forced on prime minister David Cameron after ill-judged comments made by business secretary Vince Cable to reporters from The Daily Telegraph last month that undermined his position on merger and competition issues.
Labour MP Timms explained that the move was not the right way to proceed when the sector is so important to the future of the UK.
"Telecoms and internet policy are crucial for UK business. Ejecting them from BIS means downgrading their importance. A serious error," he said.
"I understand the government's difficulty following Vince Cable's blunder, but reorganising the machinery of government to get round the problem is not the answer."
Timms's comments came after the government outlined the full extent of a shake up between BIS and DCMS that changed numerous issues concerning telecoms and the internet.
In particular, Timms believes that issues around the Digital Economy Act will be compromised by the change, warning that the government could now make mistakes in this area.
"There is a particular problem around digital economy policy. DCMS is the sponsor department for the content industries: music, film, publishing," he explained.
"If those interests have the whip hand in internet policy at the expense of internet users and service providers, the government is likely to make serious policy errors."
Timms was in charge of overseeing the passage of the Digital Economy Act through parliament in 2010. The legislation became law during the wash-up process ahead of the general election last year.
The Act is currently being challenged in the courts by BT and TalkTalk.
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