House of Commons Hansard Debates for 15 Mar 1995

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The networks and services must develop together, and we must keep the policy of attracting new investment in both. Unlike the Americans and the Japanese, the Government are reluctant to set a target date for the super-highway. They seem preoccupied with encouraging so-called competition for local cable franchises. We should concentrate on encouraging the development of a nationwide broadband network, with maximum usage for broadband services. That is what the French, the Dutch and the Germans are doing.

Just last week, France Telecom announced that it would bring forward new investments for expanding its optical fibre network to meet the French target of a nationwide super-highway by 2015. Meanwhile, Japan and the United States have set firm target dates for connecting up all schools and hospitals by 2000 and 2010. The problem for the Government is that they cannot set any targets, because there is no certainty that the cable companies can meet them. Under current regulations, there is no incentive to push ahead anyway.

Our report argues that our regulatory system hinders the development of broadband networks and services. We could see no logic in keeping the regulatory rules which ban BT and Mercury from providing cable television. Repealing them would provide the income stream that is needed for investment in the new broadband networks and services.

Mr. Peter Hain (Neath): I think that my hon. Friend is arguing the point that British Telecom principally, and Mercury to some extent, are the only telecom operators that can provide the broadband network nationally and send fibre into every home, and that that provides the sole basis for the integrated national network that can put Britain in the lead in the super-highway. Does he agree that, unless we have that, we will lag behind competitor countries such as the United States, Japan and Germany, when in fact we invented the technology?

Mr. Caborn: That is a good point, and one on which the report concentrates. As I develop the theme, the historical context in which regulation arose will show the weakness in the application of that regulation.

Mr. Peter Viggers (Gosport): The hon. Gentleman is aware of my declared interest in the cablecoms industry. Is he confident that BT would have invested the £10 billion in cable networks that the cable companies are proposing to invest this century if it had not been given some regulatory confirmation that it would have a return on its capital?

Mr. Caborn: That is a hypothetical question. The Select Committee report deals with practical matters, and the situation as it is today. We have tried to develop with the cable companies and with both BT and Mercury an information super-highway for the early part of the 21st century. Therefore, no useful point would be served by answering the hon. Gentleman's question. We have tried to look forward and judge how we can best match what we have now with the cables and the PTOs, and develop that for the full information super-highway for the early part of the 21st century.

Mr. Roger Stott (Wigan): I am following what my hon. Friend is saying with great interest. If we are to

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achieve what the Select Committee wants us to achieve, the question of the asymmetry rule must be addressed by the Government. As I understand it, the rule will only be reviewed in the year 2001, with no guarantee that it will be changed. If it is not changed, it is clear that British Telecom will not invest the £15 billion required to put fibre into the domestic network.

Mr. Caborn: My hon. Friend raises a very important point. He will find the Select Committee's answer to it as I develop my speech. I am sure that the Minister will be delighted to answer my hon. Friend's question. After all, it applies more to the Minister than it does to me.

As I was saying, we could see no logic in keeping the rules that ban BT and Mercury. The Committee asked why, when the predominantly US-owned cable companies have a privileged monopoly in our backyard, when BT tries to compete within the US it does not get equal access to the US market. That should be a matter for concern for the Government.

The entertainment ban was built into the regulation when cabling was in its infancy. At the time, there was some sense in giving fledgling British cable companies a helping hand. However, the position has changed dramatically over the past 10 years. The franchise has been sold on, and the big US cable and telecom companies seem more interested in taking on BT in the standard telephony market than in creating a national super-highway. The Government have made some concessions at the margins to BT and Mercury, and they are welcome; however, the ban remains open-ended. The Committee would have had more sympathy with the Government's position if the cable companies were attracting a higher take-up rate for cable television and promoting new interactive services. The fact is that they are not. The penetration rate for cable take-up is currently 21 per cent.--the same as it was in 1992. In the US, it is more than 70 per cent.

In some areas, cable has not even begun. I received a letter only last week from a couple in Hackney complaining that they could not get cable television. The couple contacted the local franchise holder, Cable London, to ask when they could expect their street to be cabled up. They were told to call back some time in 1997. Our report also pointed out our concern that the majority of cable companies were not investing in optical fibre networks, or offering new broadband services. The evidence we received--and it was pretty extensive--showed a mosaic of cable networks using mostly traditional copper or coaxial-based technologies. We could find few examples of cable companies experimenting with advanced broadband networks that have the ability to deliver interactive, two-way television. Even if the cable companies met their build obligations in full, it would still leave more than a third of the country without access to a fixed cable network. The Select Committee felt that the scales had been tipped too far in favour of the cable companies, and that now was the time to start opening up the market by lifting the entertainment ban and by providing for open access to any cable network.

Some cable franchises have been protected for 10 years, and they could run for a minimum of another seven years. It could be even longer than that, unless policy is changed. Despite the Minister's suggestion, the Committee could find no technical or legal problem with phasing out the ban.

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The way forward must be to get BT, Mercury and the cable companies to build a national network together. That can be achieved by relaxing the regulations franchise by franchise, with the aim of lifting all restrictions on BT and Mercury by end of 2002. As a quid pro quo, we recommended that BT and Mercury should be required to allow open access to their networks, and to be given the task of linking all public facilities to the super-highway as soon as possible.

The benefits of that approach are spelled out in our report. First, it would enable BT and Mercury to begin investing the £15 billion to £20 billion necessary to develop a national broadband network, without denying some protection to existing cable companies. Secondly, it would provide an incentive for cable companies to expand and upgrade their networks, both to private customers and to the public service users. Thirdly, it would create the certainty and purpose that is lacking.

The certainty is not just for telecommunications and cable companies; the problem affects the hundreds of UK firms which are supplying the technology and the software. Their concern is the long lead time they need to develop broadband technology. With the present uncertainty, those firms cannot take the risk that, in five or 10 years' time, BT may be able to start investing in broadband networks and services. We will end up having to buy the technology and equipment from United States, Japan or other countries.

Most of the cable companies said that they could live with our proposals, yet the Minister keeps telling us that the status quo is preferable, because it offers stability. The Committee could not accept that. We argued that keeping things as they are creates uncertainties. We could not accept that regulations could be changed only on competition grounds, set by the Director General of Telecommunications. That is nonsense. The creation of a national information super-highway is a policy issue with wide-ranging public interests and economic implications. It is not for the regulator to dictate the policy or to set the strategic framework. That is the Government's job.

If our proposals would thwart competition, I could understand why the regulator might want to keep things as they are, but our suggestion implies more, not less, competition. We argued that the phased lifting of the entertainment ban and opening up the markets franchise by franchise would provide for more open access under an integrated network.

The idea that ring-fencing local cable monopolies will lead to competing national networks with open access to anyone does not add up. For a start, the competition is not there, and if the entertainment ban stays, it is unlikely to emerge. Even if we end up with competing national networks, which has as much strategic logic as competing rail networks, we should ensure that parity and equality of access exist. Are we not in danger of creating a piecemeal, multi-tiered highway of local networks that deny universal service and customer choice?

The Parliamentary Under-Secretary of State for Trade and Technology (Mr. Ian Taylor): I shall pick up the points that the hon. Gentlemais making when I speak later, but I must ask him a specific question. If there is so much wrong with the Government's policy, why has the European Union adopted --belatedly--the same principles? Why were we able to establish the principles

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of liberalisation and competition in relation to, among other things, alternative infrastructures as part of the G7 conference's conclusions?

Mr. Caborn: Trying to liberalise the market and develop third-party access is to be welcomed. The Select Committee challenged the Minister about why we are protecting the cable companies for a now indeterminate length of time, possibly well into the 21st century. Our major PTOs--BT and Mercury--should be allowed to enter the entertainment market. The central question concerns the regulatory regime. The Committee argued for liberalisation of the market and third-party access and, as the Minister knows, the quid pro quo was that BT and Mercury open up to the cable companies.

What confounded some members of the Committee was that, although this is the Government of competition and open markets, we have to ask them to introduce competition by phasing in the lifting of the franchise. Only the Government do not accept the idea but I have no doubt that, with his enthusiasm for his new post, the Minister will change that.

Mr. Stephen Timms (Newham, North-East): Does my hon. Friend agree that what we need above all in interactive broadband communications is innovation, but that the monopoly arrangements introduced by the Government, whereby there is to be one franchise holder for an indefinite period, will not lead to that innovation?

Mr. Caborn: My hon. Friend is absolutely right. The Select Committee expressed the same concern, and suggested ways out of the present regulatory system, which would lead to the conditions under which such innovation could occur.

Access--public and private--is extremely important. It is essential that we develop a national network that provides open access for public and private service users. If we do not, I fear that we run the risk of an information society for the haves, with no access for the have-nots.

The Select Committee set out to deal with two key questions. Are the Government doing enough to develop the super-highway that we shall need by the turn of the century, and are the policies and regulations flexible enough to ensure that we are moving fast enough relative to our major competitors? On both counts, the Committee concluded that the Government must think again. We warned of the cost of delaying and dithering any longer.

The Select Committee recommended a compromise solution with which the telecom side and the cable industry said they could live. They want an end to uncertainty, and they want the Government to stop procrastinating. We emphasised in our report that the situation has changed dramatically since the cable franchises and the entertainment ban were introduced. Government policy, and the regulations, should reflect that.

There is still time to act, and I hope that the Minister will take the opportunity today to follow through the main recommendations in the report.

4.8 pm

Mr. Peter Viggers (Gosport): I am grateful for the opportunity to speak briefly. I have been away in the United States and was not aware that this debate was being held today. I found myself in the embarrassing position of having a commitment to chair a meeting

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elsewhere in the House at 4 pm, which is why I absented myself during part of the speech of the hon. Member for Sheffield, Central (Mr. Caborn). I apologise; my absence was not intended as a discourtesy, and I shall certainly read his speech in Hansard . It is sad that there does not appear to be as much interest in this subject in the House as there would be if the debate were taking place in a school or college. The young understand the importance of the Internet and the super- highway. I have to ask my 22-year-old son for advice on the use of computers, or, better still, my 18-year-old son--both are experts. The young are well seized of the importance of this subject. They understand its significance and the fact that it will change their way of life and how they work. Those of us who are rather older are finding it more difficult to adjust to the world of computers and the world of the Internet.

I first found myself becoming involved in the general subject when, as a Minister responsible for industry in Northern Ireland, I discovered a European proposal to lay a fibre-optic link around Northern Ireland in 1987. It seemed quite interesting, and that it would provide better communications. I was told that it would provide "more bandwidth, Minister" and I had to find out what bandwidth meant. I discovered that it meant the opportunity to use more and more electronic and electrical devices on the cable system which was to be laid around Northern Ireland.

Later, we were among the first in Northern Ireland to use video conferencing--on a secure network between Whitehall and Belfast. The object of the exercise was, in fact, to save money, because Ministers were running up such enormous bills for transport between London and Belfast.

I rapidly discovered that if one wished to make a point to one's own Secretary of State, one could not make it while sitting alongside him. One needed to make that point from the other end of the video conferencing facility. I rapidly developed the habit of flying to the other end to have a video conference with my Secretary of State, rather than driving up the hill to Stormont. Be that as it may, I still think that the system is worth while and will certainly develop.

In October 1989, I was approached to become chairman of a company which applied for cable communications franchises. I accepted. We were awarded five franchises. Subsequently, after various discussions about our future with different companies, we decided on a very happy marriage with NYNEX Cablecomms, and I declare an interest as a director of companies in the NYNEX group.

What is broadband, what is bandwidth, and what can it do? First, of course, with bandwidth, people can talk to each other--so it is a telephone. One can send people messages--so it is a fax. One can watch programmes--so it is a television. One can talk to people and see them at the same time--so it is video conferencing. One can work from one's own house or building by communicating with others--so it is an office. One can sell things by promoting them across it--so it is a showroom. One can buy things through it--so it is a shop. One can carry out financial transactions through it-- so it is a bank.

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Those are all single interactions between, as it were, one person and another, but on the Internet, with broadband, one can do so much more. For instance, several people can join together in the same discussion from different parts of the world, so it can create a design laboratory.

In the past few weeks, I have seen two powerful examples of the use of cable and bandwidth. The first, the beautifully named Super-JANET, the super joint academic network, will enable advanced academic groups to link and talk to each other. I certainly have high hopes that the sixth form college in my constituency, of which I am chairman, will be able to link up with local cable communications, and, perhaps, in Gosport in the south of England, be able to listen to lectures given in Manchester or in the centre of England. All such developments will come.

Last week in Washington, at the Walter Reed hospital, we were shown facilities whereby medical signals and photographs may be sent by British forces in Belize to the hospital where, in Washington, American doctors may form a diagnosis and advise local people in Belize of the best treatment for the patient. Advanced communications can do so many things.

I am certainly convinced that the key to success is in the Command Paper, where it says:

"The spur to all this progress--

which it described--

"was the original decision to liberalise infrastructures and services."

BT was privatised in 1984, and very few people now, even the most extreme socialist Members, would say that BT would have made as much progress had it stayed in public ownership.

Then we moved on to the duopoly review, and the 1991 White Paper entitled "Competition and Choice Telecommunications Policy for the 1990s". That allowed cable companies to offer voice telephony in their own right. The key to that is that BT is prevented from conveying entertainment until 2001, with a review in, or not earlier than, 1998, and is prevented from providing entertainment services until 2001.

Those restrictions on BT have enabled cable companies to enter the business.

From my experience, I can tell the House that when my company was in the business of trying to raise funds for cable telecommunications development, we approached a very wide range of British institutions, but I am afraid that the interest was negligible. I regret that. I am happy that American, French and Canadian companies have been prepared to invest here, but it is most unfortunate that British companies are not very well represented-- with, of course, the notable exception of Cable and Wireless and its affiliate Mercury. There would not have been a commitment to cable development if the Government had not laid down restrictions on BT. Those restrictions are absolutely critical. The cable companies will spend £10 billion this decade. Because of the diversity of provision, I am confident that that will provide an ideal fibre-optic network throughout the United Kingdom. It will provide the basis upon which development will take place. It will not be the Government-controlled and dictated fibre- optic network which would be so attractive to some hon. Members. It will not be the Government-planned system which will

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take fibre optics into every part of the United Kingdom, because it will be based entirely on competition and the opportunities of the companies involved to make profits.

I am convinced that the cable companies are making an enormous contribution. They are providing 30,000 jobs, and I believe that the way ahead now is as set out by the Government. I respect the Command Paper, in which I know the Minister is closely involved. I also respect the Government's point of view, and I am delighted that the Minister has taken such a keen interest in the matter and that he is driving the issue forward.

4.15 pm

Mr. John McWilliam (Blaydon): I should like to preface my remarks by declaring an interest. I am proud to say that I am sponsored by the Communication Workers Union, which is the amalgamation of the old National Communications Union and the Union of Communications Workers. This is the first occasion on which a member of our group has been able to declare that interest in the House. I also declare an interest as a director of EURIM. That position is totally unpaid and without any expenses.

I congratulate my hon. Friend the Member for Sheffield, Central (Mr. Caborn), all members of the Trade and Industry Select Committee and the Clerks and specialist advisers on the most important contribution that they have made to the debate. This debate is vital to the economic well-being of this country into the next century, and its impact has been largely ignored by the Government. I notice the paucity of Conservative Members present. I welcome the contribution made by the hon. Member for Gosport (Mr. Viggers), although I did not entirely agree with his comments. As he has known me for an awful lot of years, he will not be surprised about that.

We must consider where we are now, look at the kind of information super- highway we need and see how we can get there from our current position. The Select Committee made a major contribution to that end, but the Government must have a much clearer idea of the nature of competition, the customer, the provider and how the system operates. It was clear from the Minister's intervention on my hon. Friend the Member for Sheffield, Central that his understanding of the Bangemann report and what the G7 summit came up with, and my understanding of that, are somewhat different. I do not believe that the G7 summit dreamt up the asymmetry rule to which my hon. Friend referred. Indeed, the Bangemann report recommends against that. I do not believe that the G7 summit recommended that our market should be so dominated by foreign and American companies, although it is.

How have we reached this point? I have been privileged to serve on every telecommunications Bill since 1979. I have been involved in all the debates. We reached the current position because a Secretary of State made a fundamental mistake. He thought that the competition was in the network and not in what could be provided on that network. That is where the real competition always resides.

Mr. Gordon McMaster (Paisley, South): My hon. Friend is an expert on these matters. Does he agree that the asymmetric rule has caused havoc in many constituencies, as companies such as CableTel in my

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constituency tunnel through and churn up pavements without any regard to consultation with our constituents? Such companies are wreaking havoc as they are not properly reinstating the pavements and roads that they have dug up. Could not that have been avoided if the Government had adopted a more sensible policy?

Mr. McWilliam: I agree. One of the problems is that the cable companies are there to sell cable time and not to install cables. They largely employ casual labour to install the cables, and sometimes the skills of the casual labour are not up to the level that they ought to be. Indeed, I have seen instances in my constituency of a subcontractor shoving a mole drainer through the roots of many trees. As a noted horticulturist, my hon. Friend will understand the effects of that.

If the Government had recognised where the competition was in the first place, we would not have had that situation, but because of political dogma at the time, they decided that they knew best and that it was in the network. We know that that is not true. We have to consider the sort of highway that we want. Unlike most cable company networks, it has to be two way and it has to be broadband. As my hon. Friend the Member for Sheffield, Central said, one of the problems with many local cable company networks is that they are a mixture of twisted pair, coaxial and fibre. What is more, hon. Members must be aware that there is more than one kind of fibre, and that fibres have more than one sort of capacity.

There is also more than one way of switching the network. I want to make certain that I stay within the constraints of intelligibility, so I shall not go into network architecture in any great detail. What most cable companies have adopted as the network architecture, however, delivers the minimum bandwidth to the customer, not the maximum--that is not a national broadband network.

The network has to be national and must offer services in cities and rural areas. Given the present situation, the cable companies are not capable of doing so and there is no intention whatever of cabling the rural areas--one third of the United Kingdom--so the existing network will not lead to a national network.

There are constraints; some are Government-imposed and some are not. There are the technological constraints that I just described, which are due to the network architecture that cable companies have adopted, and there are the technological constraints that are due to the fact that all the cable companies have not adopted the same technology. Some of the fibre could be incorporated in a network, but some could not.

We must not be dogmatic about this, either. The hon. Member for Gosport talked of renationalising British Telecommunications, but it is not a question of that--it would cost far too much, and no one on the Opposition Benches is arguing for it. We have to study our national communications carriers, such as BT and Mercury and the international companies, such as BT and Cable and Wireless, to find out whether we are serving our industrial interests throughout the world.

Mr. Barry Sheerman (Huddersfield): I hesitate to intervene, as my hon. Friend is a great expert on this subject, but is it not the case that, if one compares BT and the present cable suppliers--the incomers, as I would call them, as I come from Yorkshire--one sees that BT has a

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great record of purchasing equipment from British suppliers? Is it not the case that, for all we were told 10 years ago--that, if we waited for fibre optics, which was a British invention, we would make it in Britain--the majority of the equipment purchased by the cable companies is imported from other countries?

Mr. McWilliam: In essence, that is true, in that many of the switches are imported. BT no longer purchases as much British equipment as it did, although it still purchases a great deal.

Mr. Sheerman: What about the cable?

Mr. McWilliam: No, it is not true. Most of the fibre optic cable is manufactured by BICC, which has the rights, and the copper cable also tends to be British, but much of the technology is not British and is not compatible with the existing network.

My hon. Friend the Member for Sheffield, Central was right to refer to the ownership of the cable companies. Ninety per cent. of cable companies are owned by United States telephone multinationals, at least one of which has a larger asset base than BT. Those are the very companies with which BT and Cable and Wireless are competing worldwide for a share of the telecommunications business. At the same time, British firms are not allowed into the markets in those countries.

We could almost describe that as industrial treason. The Government have legislated to allow companies into our market from countries that will not allow us into their market. They are destroying the profitability of our companies and their ability to invest worldwide and compete against those other companies.

Mr. Ian Taylor: I hesitate to intervene, as I shall pick up many of the hon. Gentleman's points later, but I cannot let him get away with that. Because of our action in opening up the United Kingdom market, British companies now have a better chance of getting into the American market than most of our European rivals. Vice-President Gore announced at the G7 conference that, one way or another, America would remove by the end of this year the 20 per cent. embargo that relates to foreign investment in United States telecommunications companies using spectrum radio, as long as the countries from which new investors are to come have liberalised. This country stands in very good stead in that reciprocal agreement. The opportunities in America--as well as in the rest of Europe, once it has

liberalised--will be open to British-based companies.

Mr. McWilliam: The Minister is as innocent of American politics as he is of where the telecommunications market is. He knows as well as I do that Vice-President Gore will have to get that liberalisation through both Houses in the States.

Mr. Taylor: No.

Mr. McWilliam: He will, and it will be blocked.

Mr. Taylor: Vice-President Gore said in Brussels that his Administration would bring forward legislation that would need to get through both Houses, but that if there

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was a problem, he would do it by regulation. Therefore, he could give a guarantee that America would change the rule this year.

Mr. McWilliam: First, the American system is geared to kill legislation, not to facilitate it, like ours. Secondly, if the Vice- President thinks that he will get that measure through, he has got another think coming. He will not do it, because there are too many vested interests in too many states. Those might have been fine words for the G7 and they might have been quite helpful, but all Vice-President Gore is interested in is making sure that the Americans develop their own super- highway. It is not really in America's interests for Britain to develop our own.

We have a problem in that we have no access to the United States, despite the fact that the Minister says that Vice-President Gore will give us that access by the end of the year. I shall believe that when I see it. We have problems with access to Japan--one of our major competitors, which is developing its system--and to Germany, which is developing a system on the back of a national system. Britain has a fragmented system, with the asymmetry rule.

I shall give the Minister a statistic. The average telephone line in this country is used for six minutes a day. That is all. Nobody is going to put a fibre-optic link into a house for a line that is used for six minutes a day. The existing cable network is not capable of supporting a super- highway, and the £10 billion of investment that has been referred to will not support the information super-highway. The existing system was not designed for that, and it will not support it.

The only company that has the asset base to support the investment needed is British Telecom, because we are talking about an investment of some £15 billion. That will be the cost of just getting the local fibre- optic network in. In order to get universal coverage in the UK, the Government would have to make some other changes. They would have to drop the asymmetry rule, and they would also have to let British Telecom have radio tails on terminal ends in rural areas, because there is no other way of operating the system economically. That is another bar against BT.

The Government must allow BT and Mercury to carry entertainment services, as that is the only way in which that investment could be justified. Last year, BT's profit was £3 billion, which was reduced by £500 million because of the regulator's formula on pricing. An investment of £15 billion could not be supported on a commercial basis on that profit. The only way to proceed is to open up the market.

If we are to compete against the United States, Japan, Germany and other European Union partners, which we must as we approach the next century, we must have that information super-highway. We cannot have it with the dogmatic approach that the Government have adopted since 1979, so we must have a new approach. Oddly enough, the new approach is to free up the system rather than tell the cable companies that they cannot extend their customer base. The Government must lift the restrictions on BT and Mercury and allow them to sell entertainment services on their main network, too. Those companies could then justify to their shareholders the investment of £15 billion, which needs to be made into the next century to set up that super-highway. That is the only way in which that will happen.

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I have taken enough of the House's time, as other hon. Members want to speak. This is an extremely important debate and I congratulate the Select Committee on Trade and Industry on its thorough approach to this subject. I respect the Minister's knowledge of and enthusiasm for this subject, but he must convey to his political masters the idea that the competition is not in the network but in what can be put on the network: entertainment, education and health services; business applications; and teleworking. He must also convey to his right hon. Friend the Secretary of State for Employment the fact that the project entails a view of employment patterns in this society that must be dealt with before it comes in, so that we know where jobs will be lost and gained, and protection for teleworkers is built in.

Unless the Minister does those two things, we shall not have the super- highway that we need to take us into the next century and we shall be unable to support the economic development that we need to provide for people's services, welfare and health.

4.42 pm

Mr. Archy Kirkwood (Roxburgh and Berwickshire): I am grateful for the opportunity to make a short contribution to this debate. I apologise to the hon. Member for Blaydon (Mr. McWilliam) for not being present to hear all his speech. I attended to my duties as a member of the Committee of Selection for 10 minutes in the middle of his speech, but I undertake to remedy that by reading it in tomorrow's Hansard .

I, too, congratulate the Select Committee on Trade and Industry and its Chairman on the work that they have done. I also congratulate the Liaison Select Committee on selecting this extremely important subject for debate, which has implications for our industrial, economic, educational and domestic future.

I endorse what the hon. Member for Sheffield, Central (Mr. Caborn) said about the services that the House of Commons has supplied through its parliamentary data and video network, and the use or otherwise that Hansard makes of electronic means of communications. It is essential that the House takes a lead in providing the infrastructure necessary not just for Members of Parliament to do their business more efficiently, cost effectively and faster, but to give a lead and show the worlds of commerce, industry and education that we attach importance to that new method of communication and are prepared to lead by example.

The PDVN should be developed faster and Hansard should make the information that it contains more freely and widely available by electronic means. I recognise the Minister's enthusiasm for the subject. He does good work and I know that he must win the arguments within the Department and the Treasury to further this matter. I hope that the Minister will give a commitment to examine electronic access to the PDVN and Hansard, as well as some of the other important aspects of the Select Committee's report.

Hon. Members are always a little sceptical when Ministers inform the House that they are about to work miracles and deliver more services at lower cost. In most instances, that proves to be untrue. However, the hon. Member for Neath (Mr. Hain) referred to the

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extraordinary British invention of fibre- optic technology, which offers us the chance to improve services and save money at the same time.

I will concentrate on opportunities for education in the first half of my speech because I believe that education in the United Kingdom could become more responsive, flexible and probably cheaper in the long term by deploying the latest technology sensibly and by using the emerging information infrastructure.

Some right hon. and hon. Friends and I were fortunate to spend a few days in Washington about 10 days ago. During that visit, the leader of my party, the right hon. Member for Yeovil (Mr. Ashdown), had a long and stimulating conversation with the American Vice-President, Mr. Al Gore. As a result of the meeting, it became crystal clear that America is in the driving seat of information technology. There is a commitment within high levels of Government to ensure that America progresses across the different sectors within that technological area. If we are to keep the advantage that we have in many areas of technology, we must secure that same commitment at the same levels of Government in this country. That would be disastrous for both the United Kingdom and for Europe as a whole. Interactive learning systems, including access to electronic libraries, will clearly revolutionise the way in which future generations are educated. It will become easier for individuals to explore, in their own time and in their own way, the subjects in which they are interested and perhaps develop that interest into a career.

We hear anecdotes and we read stories in the press about people who have otherwise dropped out of society but who have gone to cafes, surfed the Internet and have become experts in that area. In America we heard about people in Chicago, for example, who have accessed the library connections to Internet. They have become technological experts because they have engaged their interests and used their time to gain experience in retrieving information from the Internet, which--as those of us who have tried it will know--can often prove quite frustrating.

The Department for Education and parents must work together to define what they want to achieve to deliver a new educational philosophy for the future. As a nation, we must have training for life and I think that the optic-fibre network and the information super-highway will form an integral part of that training. We must compete with technology from the Pacific basin, America and other parts of the world. In order to stay competitive, we must generate wealth, which involves cultivating an educated work force and an educated society. There is a little of the chicken-and-egg syndrome in that situation, but Liberal Democrats are quite clear about how we would break into that cycle. We would concentrate on education and invest in the future of the nation, thereby providing the wealth that we need. We do not believe that we can leave everything to the market.

I agreed wholeheartedly with that part of the speech of the hon. Member for Blaydon which I heard. I concur with what he said about excluding the British players, BT and Mercury, from participating in building communications infrastructure. I think that his argument is sound, and I hope that the Government will pay careful attention to it. We may agree in five or 10 years' time,

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with the benefit of hindsight, that it was a monumental mistake to exclude the British players, and that banning them from broadcasting entertainment services until the year 2000 or 2001 in order to encourage inward investment from overseas companies was at best unwise, and at worst positively idiotic.

Excluding the British players certainly gave the American companies more than a head start, but it has been much worse than that. The American companies have cherry-picked the most lucrative areas of the country, establishing their own local monopolies, typically in cities and towns and digging up roads and pavements with little regard to the trees that lined avenues. They have left a patchwork effect instead of being required to reinstate the full width of pavements, giving local residents a benefit for the disruption caused. That may seem a small matter when we are contemplating the future of the super-highway, but it is important for the residents who are affected.

The infrastructure is not touching huge areas of Britain. The American companies regard the rural and sparsely populated parts of Britain as economically much less desirable than towns and cities. In the borders, for example, we are stuck between, to the north, Edinburgh, which is being cabled by United Artists, and, to the south, Newcastle, which is being cabled by United Artists. We are piggy in the middle.

Courtesy of Scottish Telecom, a 64 KB pipe goes through St. Boswells and Coldstream. In order to remain competitive and get access to proper broadband services that would suit the needs of commerce, industry and education, we would need at least a 2 MB fibre-optic cable. We are unlikely to have that, so there is no immediate prospect of the population in the borders having access to that level of infrastructure.

Al Gore is absolutely right. If we are not careful, and if the Government do not get their planning right, we shall end up with a society of information haves and have-nots. There is a great deal of concern in my party, which represents rural areas, many of which are disparately populated, that, if it is left to the market, those areas will never have access to a proper system of infrastructure. If the Minister is about to tell me I am wrong, I shall be delighted.

Mr. Ian Taylor: It is a matter of great concern to many people. In very rural areas, the answer is not necessarily simply to replicate the cabling that is installed in more urban areas. I assure the hon. Gentleman that we are now looking very much more at further release of the radio spectrum to provide access to rural areas. I am sure that he will be delighted about that for Scotland, as and when we can announce the next stage.

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