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Mr. Gale: I concur entirely. I am sure that, if further amendments are necessary, the next Conservative Government will be only too pleased to address them.
I welcome my hon. Friend the Minister for Science and Technology to the Dispatch Box and thank him for his kind opening remarks. As he is aware, having studied reports of the proceedings in Committee, concern has been expressed by hon. Members on both sides of the House that the core argument on the development of digital terrestrial and satellite broadcasting relates to conditional access and the technology involved.
What my hon. Friend has told the House this afternoon is extremely welcome. Last week, the Government published a draft statutory instrument on conditional access. That will go a long way towards meeting many of the concerns about a common interface. If the viewing public are to have the confidence necessary to invest in initially expensive new digital receivers, it is vital that they should have access to all the programmes on offer. They will not be content with a selection achieved through one box, and then having to purchase a second, third or fourth decoder to receive all programmes.
Set manufacturers must be confident that they are producing equipment that will not be obsolete within a few months or a few years if they are to invest in the production lines necessary to turn out the new receivers. I hope that, as a result of what has been said today, set manufacturers and the public will proceed with confidence and that there will be a new range of wide-screen digital television receivers--with a set-in box, not a set-top box--capable of receiving all the channels whether by satellite, terrestrial or cable television.
As my hon. Friend said, new clause 41 would give reserve powers to the Independent Television Commission. It is similar to the amendment that I tabled in Committee and which was lost on the Chairman's casting vote. Although new clause 41 gives the ITC some discretion to choose between sub-sets of agreed European standards, it does so only within the terms of article 2c of the television standards directive.
I am assured that article 2c refers only to the most basic elements of the digital transmission system. It does not cover any of the ancillary elements such as service information, which is not the television picture or sound, but information about the service; it does not cover conditional access, but the statutory instrument will; and it does not cover electronic programme guides, which were discussed in Committee. All those elements are essential both for the digital transmission itself and for compatibility between them. There will be an opportunity through the statutory instrument to address those missing elements if my hon. Friend the Minister for Science and Technology is so minded, and I would be grateful if he would comment on that.
Mr. Maclennan:
I welcome the Minister's speech, and only in passing regret that the Government's intentions in this very complex area became clear rather late when they tabled their amendments on Thursday.
The complexity of the issue, both in terms of the technology and the legal language that we are deploying in the amendments, would probably be baffling to most auditors of this debate. I think that we all agree--I do not believe that there is any division across the Floor of the House on the issue--that we are trying to guarantee the ability of audiences to choose to receive either digital terrestrial or digital satellite services, or both, without disposing of equipment that they have already acquired. It is recognised that that is vital to the take-up of the new digital service. I take it that that is what inspires the Minister's amendments, although they are also clearly designed to bring the Bill into line with the terms of article 2c of the European Union television standards directive.
I tabled new clauses 43 to 46 because it has been put to me--and, I imagine, to other hon. Members--that the implementation of article 2c does not go quite far enough in removing uncertainties. The hon. Member for North Thanet (Mr. Gale) described well the defects of reliance on article 2c provisions that seem to be encompassed by new clause 41, and I endorse what he said. The provisions are of course flexible and, since we are in a fast-moving market, perhaps it would be wrong at this stage to specify a complete set of transmission elements where the ITC could play a role. Service information, for example, which is not covered by the directive, is information on where particular services may be found. It is important that compatible standards are made mandatory if receivers are to be able to locate channels and switch between them.
New clause 16, which the Labour party tabled, seems to cover similar ground, by appearing to lay a similar duty on the ITC. I am sure that it has a similar goal in mind, but I am concerned that the new clause would introduce delay into the process by simply providing, after extensive consultation, for the Secretary of State to lay an order giving the ITC powers--a somewhat slow procedure bearing in mind how rapidly it might be possible for a powerful player to come to dominate the market.
The ITC has indicated that it would consult widely and fully if it were exercising discretion in this area, and try to reach a satisfactory position by industry consensus. I do not think that, in this matter, we can simply allow the market to operate. It could take a long time to find a common standard, or one could be imposed on the industry. I therefore commend to the Minister new clauses 43 to 46, which would give the ITC the discretion that I think it requires. That is the right approach to create conditions in which a proper inter-connect regime can emerge.
I found the Minister's speech somewhat tantalising in that he held out the hope that some of the amendments, which have been tabled by hon. Members of all parties,
might conceivably be acceded to. I therefore hesitate to labour my points lest, by some chance, I might be the fortunate person whom he intends to favour.
Mr. Ian Taylor:
We have had a useful and clarifying debate. I suppose that I am touched by the words of the hon. Member for Ashfield (Mr. Hoon). One's absence is felt in these matters but, as I said, my hon. Friend the Minister for National Heritage did a tremendous job in Committee. My hon. Friend and I kept in very close touch and I would not want the hon. Gentleman to think that I had no interest in the Committee's proceedings. There is a close working relationship between the Departments of Trade and Industry and of National Heritage. My responsibilities as Minister for Science and Technology include the economic supply chain, copyright issues and many of the other basic technical standards that underpin the Department of National Heritage's broadcasting policy, and this is one of the areas in which such matters are particularly important.
Conditional access and interoperability are crucial to our ability to move forward in this very exciting digital television revolution. I entirely agree with my hon. Friend the Member for North Thanet; we must ensure that customers know where they stand and that they do not have to buy many boxes. He is absolutely right that, before we get very far down this track, the new sets will have built in decoders rather than set-top boxes. We are possibly talking about the change of 8 million television sets--that is a slightly back-of-an-envelope calculation--which is a considerable challenge. Indeed, we have set down a timetable for a review of when we might ultimately consider switching off analogue. I would like that to be capable of happening, and for us to give guidance, as soon as possible.
I should like, if I may, to cross-reference this issue with the White Paper that my right hon. Friend the President of the Board of Trade issued on radio spectrum pricing only 10 days ago. It contains a very useful section on radio spectrum pricing in relation to the broadcasting industry, which is not the subject of these amendments but to which I should nevertheless like to draw attention because I believe that it is relevant to the background to the debate. Set manufacturers must also be given clarity.
As always, there is a need for a concept of commercial return in order to stimulate investment. We must not stipulate to the point that we ignore the innovative process, nor must we draw the power so widely that the people who are investing consider the risk too big and, therefore, delay their activities until the Government of the day clarify their intentions.
In my judgment and that of my colleagues, new clauses 43 to 46 would give the ITC powers to do virtually anything in connection with digital television services. Far from creating the certainty that we require, they would be likely to provoke uncertainty. Were the power to be applied to technical standards in decoders, the need for clearance would arise under the single market procedures of directive 83/189/EC, and that would inevitably create further uncertainty and delay. We cannot accept those new clauses, or new clause 16, which offers similar scope. We believe that it, too, would be a recipe for delay and increased costs.
I accept that not every element can be covered in the statutory instrument. Basic standards on service information are included, although not the full
specification. The statutory instrument cannot implement more than is in the directive, but it will be laid in the autumn. In the document published on 26 June, we laid down a timetable to which I intend to adhere. We are having consultations until the end of this month, and we will move swiftly thereafter.
Finally, we come to amendments Nos. 228 and 229, tabled by the hon. Member for Caithness and Sutherland (Mr. Maclennan) and others. It is important to be charitable, and I must say that the amendments are ingenious and we like them. They seem to offer a response to some of the potential competition law difficulties identified with proposals explicitly requiring collusion between bidders for multiplex licences. Co-operation is still possible, and may be desirable. It should be clear that, under these amendments, the ITC would not be able to preclude bids that did not involve co-operation between multiplex providers. Equipment using different conditional access systems from that of other multiplex operators is still capable of receiving all the multiplex services through the application of simul-crypt, as I explained earlier.
Furthermore, new clause 41 and its associated amendment, amendment No. 253, provide a back-stop power for the ITC to help to ensure the greatest mutual technical compatibility that is reasonably practicable between digital services. Amendments Nos. 228 and 229 seem to us to add value to this objective in the specific context of digital terrestrial television. They make clear that, all other things being equal, proposals that added to interoperability without raising immediate problems of competition law would be favoured over ones that detracted from interoperability. The Government are therefore minded to agree to these amendments but, for the reasons that I have explained, we will resist the other amendments--and the new clauses--in the group.
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