David Prosser's Outlook: Why plea-bargaining powers won't help the FSA to nail the HBOS masterminds

Is the net heading for a crash? Michael Grade's bumper pay-day

Any victims of the great HBOS short-selling sting who were expecting justice to be swiftly dispensed must be growing more disappointed by the day. It is now 10 days since the Financial Services Authority promised to hunt down the criminals who targeted the bank, yet dawn raids on the Mayfair haunts of the short-sellers widely thought to be the chief suspects have been conspicuous by their absence.

The Government's response to this failure should have been predictable for anyone familiar with the Home Office's thoughts on detention without trial. The answer, of course, in cases where the dock remains empty, is to offer investigators ever greater powers. So it was that Alistair Darling yesterday floated the idea of giving the FSA the option of offering plea-bargaining deals.

There's no doubt the FSA itself would like to be able to offer plea bargains. Last year, it said around a quarter of all takeover announcements were preceded by suspicious movements in the share prices of the companies involved – and that, in at least some of these cases, individuals were clearly breaching insider trading laws. Yet the regulator has never successfully brought an insider-dealing case to court. One reason for this failure, the FSA says, is that it has no carrots to dangle in front of low-level miscreants tempted to fess up.

The theory is beguilingly simple. If you can find a whistleblower low down in the chain of wrongdoing, persuading them to dish the dirt on links higher up should be easier if you can promise them immunity from prosecution or lesser charges.

In practice, however, the regulator must find a whistleblower in the first place, either by confronting them with proof of their wrongdoing, or by relying on them to tip you off out of the blue.

Instances of the latter are bound to occur from time to time, but anyone manning the phones at the FSA's version of Crimestoppers probably wants to have a decent book to hand. The former route to identifying whistleblowers is potentially more fruitful, but it depends on the kind of detective work at which City regulators do not so far appear to have excelled.

There are some reasons to be optimistic. The launch of a financial crime division within the FSA last year was an important step forward. The regulator also has increasingly sophisticated computer technology that can help it identify suspicious-looking trading patterns.

However, while the suggestion that the FSA might get plea-bargaining powers has lead to obvious comparisons with the SEC, the US regulator that uses these tactics as a matter of routine, the UK authority remains a very different type of watchdog. Most of the FSA's activities – and more than 90 per cent of its staff – are focused on supervision rather than enforcement. By contrast, around half the SEC's employees spend their time investigating and prosecuting criminal and civil cases.

This contrast may be no bad thing. While it is important to root out insider dealers and the kind of speculators that sent HBOS into a spin, policing the financial services sector, protecting its customers and above all preventing disasters such as the collapse of Northern Rock should be greater priorities.

There's little evidence to suggest plea-bargaining on its own will transform the FSA's abilities to nail financial criminals. Similar powers awarded to agencies such as the Serious Fraud Office a couple of years ago have not yet resulted in a notable increase in their success rates.

The case of HBOS, in particular, is unlikely to be solved by the emergence of a whistleblower. It is almost certain to have involved a small handful of individuals operating in ways that left no paper trail – none of these traders have any incentive to come forward.

Is the net heading for a crash?

Comcast, the American cable television company that is also the country's second largest internet service provider, has been roundly attacked for its proposal to put some limits or even blocks on customers who download very large numbers of files from the internet. Accused of wanting to profiteer from heavy internet users, or to violate the "neutrality of the net", Comcast yesterday backed down.

Yet underlying what at first sight looks to be something of a geek spat is a serious debate about the extent to which the way the internet, as it is currently constructed, is capable of coping with demand from users.

At the end of last year, a report from Nemertes Research suggested that the infrastructure of the internet was not being developed sufficiently quickly to keep pace with the increase in traffic on it. It warned that by 2010, internet users might find themselves stuck in the kind of traffic jams more usually seen on the M25 in rush-hour.

There have been similar suggestions in the past which turned out to be utterly groundless. In 1996, for example, as greater numbers of people began getting internet access at home, some analysts warned the web would crash within three years. It never happened.

This time around, the warnings centre on the bandwidth – the internet's version of road space – being used by peer-to-peer programmes. This software is widely used by people sharing large files such as movies, and underpins popular services such as the BBC's iPlayer. Some estimates suggest the biggest file-sharers account for around 10 per cent of internet users but are now using 75 per cent of the available bandwidth.

Put another way, the accusation is that file-sharers make up a small minority that is causing serious traffic jams for the majority of internet users.

One possibility is that in future, internet service providers (ISPs) might start charging people fees that are much more closely aligned to their web usage. At the moment, most ISPs in this country ask users who want unlimited download capacity to pay higher monthly fees, but don't actually charge per gigabyte downloaded.

This is a row that is likely to become louder over the next year or so. Commercial companies that operate legal peer-to-peer programs – including the BBC, Channel 4 and Sky, for example – would not be impressed if ISPs began charging their customers much higher fees, tempting though this must be for some operators, particularly if they have to invest heavily in web infrastructure.

Equally, however, if the Internet slows down to the extent where e-commerce becomes a much less convenient experience, there will be an even larger constituency of businesses making a great deal of noise.

Michael Grade's bumper pay-day

Nice work if you can get it. Michael Grade's £1.93m pay packet for last year was roughly 14 times as much as he would have earned if he'd stayed on as chairman of the BBC Trust.

Is Mr Grade worth the money? Well, ITV shareholders were delighted at his appointment and have remained broadly supportive ever since. But he has been unable to prevent a slide in the company's share price – now at 68p compared to around 105p when he took over.

Some of that decline is due to the uncertainty over how and when BSkyB will be forced to cut back on its 17.9 per cent stake in the company. And Mr Grade has won applause for securing much-valued rights to key sporting events as well as a number of astute appointments.

However, the green shoots of recovery at ITV look tentative. And the broadcaster is still smarting from the premium-rate phone-in debacle. Unless both advertising and viewing figures pick up more appreciably this year, shareholders may not be so accepting when details of this year's pay packet are published.