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Mr. Ian Bruce: I am sure that my hon. Friend already knows this, but the House will be interested to learn that when all the discussion about what special sweetheart deal would have to be done with BT took place, the likes of Cable Tel, a leading cable company, demonstrated that it had already provided--it had needed special clearance from Oftel--a special deal for schools that made Internet connection affordable. That was done without the need for any special deal with the Government of the day.

Mr. Taylor: I am well aware of the details of the Oftel agreement with the cable industry to provide a fixed package for ISDN for schools. One of the problems for schools has always been the slightly open-ended commitment. Costs escalate in proportion to the length of time for which a computer is used. That is why some people in the industry are considering dumb terminals while others are investigating intelligent terminals and storing information.

The schools are confronted with the difficulty of what the budget deficit will be at the end of the year, so a fixed charge for access for the whole year, regardless of usage, was an extremely important development. We need Oftel regulation to ensure that there are proper competitive grounds for the contractor arrangements with schools.

I want to pay a compliment to BT, which has responded extremely well in a competitive environment. It continues to build out its network, with massive investment, not because of any deals with the then Labour Opposition or promises from the then Conservative Government, but as a result of the competitive pressures that it is under with the cable industry moving in on an important area of the local loop. BT responded by upgrading its network.

I am glad that the BT deal with MCI has recently cleared another of the hurdles. My voice is no longer listened to, as I am now in opposition as opposed to being

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the Minister, but I would like to put it on the record that if the Federal Communications Commission, the regulatory final hurdle in the BT-MCI deal, is attempting to say that it needs to examine more closely whether the United Kingdom is an open and liberalised economy for telecommunications, it really ought to come off its high horse.

As a Minister I was sometimes frustrated because the deeds of the FCC were at some variance with its words, as in the lead-up to the Geneva conclusion of the World Trade Organisation talks on telecommunications liberalisation. Thankfully, however, a successful conclusion was reached.

The United Kingdom is about the most liberalised complex telecommunications economy and it is far more open than others to inward investors and more generous in granting licences for international telecommunications and domestic operations. I hope that the FCC will not take a day longer than necessary to realise that it need have no doubts about the openness of our telecommunications policy. I know that the Minister will continue that liberalised approach in all that he does.

The information society initiative will change the way in which we work, both in this country and globally. There is no need for companies to be concentrated or for employees to work any particular hours in their office. We can network from anywhere because distance is no longer an obstacle. Rural communities can thrive.

There has already been work to ensure that life stays in the highlands and islands rather than being sucked into the big conurbations; that is no longer an inevitability. Life can be brought back to rural communities by tele-working and all the ways in which companies can access, analyse and distribute information instantly.

Companies' relations with other parts of their supply chain or their markets will also be transformed. The world is now a single marketplace. Once it is on-line, even a small company can communicate with people around the world, and if it is sensible and markets itself on the net, with its own web page, it can make itself appear a much more substantial operation. Small companies must be urged to get on-line.

I am delighted to hear that the information society initiative, programme for business, will continue. When I was the Minister, there were about 38 support centres around the country backing the business aspects of the initiative and providing hands-on help, especially to small and medium-sized companies, enabling them to understand why it was important for them to get on-line, use electronic data interchange and exploit the Internet as a marketing tool, to cut down the time that processes take.

For just-in-time processes to succeed, companies must be on line. In any event, many of the larger companies are beginning to insist on electronic ordering and processing. If smaller companies have not thought about that, they should think about it very quickly indeed. If one is not on-line, one needs to be extremely careful about rivals or competitors, wherever they happen to be based, encroaching on markets that had seemed very much one's own.

Our communities will have access to information and connections that were never thought possible before. The Minister did not mention the fact--I do so as an addition, not as a criticism--that technology is capable of looking

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after everybody. There are technological means, for example, of extending networks beyond what the cable industry can reasonably be expected to do.

The cable industry may cover about 80 per cent. of United Kingdom households, but using the radio spectrum will enable us to provide ISDN-equivalent signals to connect into rural communities. As we move into the digital television age, we will have other ways of ensuring that information and the interactivity of the new arrangements can reach out to those communities.

Mr. Battle: I regret the fact that I did not have the opportunity to mention that and many other matters in my speech. I hope that the hon. Gentleman will welcome the fact that we have introduced a Bill on spectrum pricing in the other place. It was left over, as it were, and should create precisely the space to which he refers.

Mr. Taylor: I am more than happy to respond to that. Opposition and Government can sometimes find common ground and I warmly support what the Minister is doing with regard to that Bill. We worked hard on it and I was pleased that it was in the Gracious Speech.

The general public simply do not understand how important the radio spectrum is in delivering the services that will emerge in the digital age. The purpose of spectrum pricing is to drive forward efficiency of use of the spectrum so that the bit that is no longer used in one way can be freed up for other uses. That is how we have enabled the mobile telephone industry to expand to an incredible extent. We have been able to clean up spectrum and allocate it to the mobile industry.

We are now approaching the third generation of mobile technology, which obviously requires us to make the best use of a scarce resource. Now that I do not have the responsibility of being the Minister, I can say that I profoundly hope that we will make use of radio spectrum pricing to raise considerable sums that will stimulate the transfer of the digital terrestrial television process to the percentage of the population that might be slow in taking it up.

The criteria in the Broadcasting Act 1996 were that we would review the switching off of analogue spectrum within five years, or 50 per cent. coverage, whichever was the earlier. As with black-and-white and colour, a persistent core of the population will hang on to their analogue spectrum and their old television sets, either because they cannot afford the new ones or because they have not been encouraged to change over.

It is in the British national interest to stimulate the change and radio spectrum may provide the funds, because plenty of people will be willing to bid for the spectrum that will be freed up when everyone has moved to digital terrestrial. The transmitters will give a much clearer signal, so spectrum can be taken back for other, more innovative, purposes. That is a technical, but important, matter if we want to achieve growth.

One of the constraints on what we are doing is the radio spectrum. There are plenty of ideas, but can we achieve the clear spectrum? That was one reason I had such a battle with Channel 5 when it wanted to use aspects of what we call the channel 35 spectrum, which is a clear digital spectrum. Channel 5 has it for five years. By the

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time we can claw it back there may well be mobile television or other signals for which we want to use that national spectrum. Channel 5 was given the spectrum on the basis that its 3 million or 4 million subscribers, who will be using a signal in that spectrum, will be moved off on to other signals by the fifth anniversary. Perhaps the Minister would like consider that.

Technology will transform the way we live; the connected communities will provide mind-boggling opportunities. Schools will be on-line; they will not only be on the Internet, but will be connected to homes so that teachers will be able--if necessary, interactively--to see what progress a pupil has made with his homework. There are various software packages to prevent children watching "Neighbours" until they have finished their homework. I do not want to be part of the nanny state, but that seems to be a profoundly good idea. Not only will children be able to do their homework, but on the same television network--using an interactive television or a personal computer--they will be able to access information digitally from the libraries, other information centres and museums anywhere in the world.

There will be a transformation in the way we live in our communities. Not only will we be able to work more at home, but we will be able to receive greater information and educational opportunities. I spent quite a lot of time ensuring that the Dearing report would stress how technology would transform higher education and its delivery. I spent much time on that when I was a Minister, even though I was at the Department of Trade and Industry--we did not pay any attention to departmental boundaries.

It is perfectly obvious that we need to consider not only the massive skills base and the use of technology in our universities, but how the universities' relationship with their students can be structured differently. In the technological age, universities have other dimensions; we do not need to bring students together in one central position in every university. I pay tribute to the work of the Open university and the way it has pioneered distance learning. We can also have diffused campuses. All such matters must be taken into account if we are to be able to afford to allow all those young people who wish to go to university and higher education centres to do so.

Technology will transform not only the way we live, but the way we learn. It will also transform our leisure time. Interactive games are often dismissed by the purists and IT snobs, but they are one of the great pull-throughs of interactivity. It is fun to play a game against a computer; it is even more fun to play a game against several other people, simultaneously, anywhere in the world. My teenage sons have taken a greater interest in that aspect of computing than I might have wished, but interactivity leads to other skills that can be learnt for interrogative educational purposes. That is another aspect we shall have to study extremely closely.

Other implications have not been properly thought through--certainly not in many of the debates that I have heard in this country, although they have begun to emerge in the United States. Information technology has now reached a stage where we simply do not understand the impact of the advances in the semi-conductor business on the rest of society.

Alec Broers, the excellent vice chancellor of Cambridge, gave a telling anecdote. He said that if the motor industry had advanced at the same rate as the

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semi-conductor industry over the past 15 years, the 60-mile journey from London to Cambridge would take a second; it would need only a teaspoon of petrol and the 20p parking fee at the other end would be greater than the cost of the car. That is mind-boggling, but it is not an unsustainable observation.

We have not fully appreciated the transformation in the rest of our lives that will result from the advances made in the semi-conductor industry and the ability of micro-processors to store information in our computers. The computers that most Members of Parliament have on their desk tops are more powerful than the on-board computers of the Tornado aircraft. The ability to access information is staggering, yet it has not yet fully impacted on other aspects of our life--but it will. It will certainly have a big impact on transport, as global positioning becomes part of our everyday life. At any given moment in a car we will know where we are and where others are so that we can avoid traffic. Information can be flashed, via satellite, to roadside signals warning of disturbances ahead, such as traffic jams. Those aspects will rapidly become reality and, through the foresight programme, many other ideas will be picked up by industry.

New technology will transform our lives; it will also transform economics. Economics has not made a proper shift towards what some larger companies realise will be inevitable. The global economy means that companies will have to restructure themselves and will no longer need the same sort of physical proximity to each other and members of the company--they will be able to communicate electronically and digitally. Employees in remote areas will be able to participate in video conferences. Information can be distributed rapidly. Rural communities can use satellites with a large footprint to enable not only information download but mobility.

Companies will change and politicians have to realise that economies will be increasingly open and responsive, not closed. It will no longer be easy for them to respond to Government intervention. In those circumstances, the idea that a Government economic policy based on the nation-state principle is likely to be the model for the future is hugely misguided. We can already see what has happened on the foreign exchanges, where there is instant movement of money.

The instant movement of information has political as well as economic consequences. As companies change the way in which they work, economies will change and we will inevitably have more global trade, regardless of individual Governments' attempts to restrict it. Politics will also change because Governments will have less influence on the movement of information, goods and services. That creates problems, including fiscal problems. Someone can avoid, not necessarily illegally, the imposition of tax because he is able instantly to source materials from other parts of the world. It is now possible to buy any book or CD of music on the Internet, and national boundaries are becoming irrelevant.

In an interesting speech the other day, President Clinton said:


I do not remember the wild west ever being a safe or stable terrain. President Clinton was either mixing his metaphors or being over-hopeful. I suspect that, between

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Governments, we still have a few battles at the OK corral to come. There will be some fairly vicious fights as Governments realise that the control and powers that they had previously taken for granted are slipping away. In those circumstances, as control slips away, there will be territorial battles and attempts to reimpose different controls. There will be exchanges between Governments which will create new rivalries. We are beginning to see that now in Internet data protection. That has a profound impact. The EU and United States have been at odds on the matter this week. If, for example, the EU refused to allow certain data to be transmitted to countries which they did not recognise as having the same privacy laws as those within the EU, there would be battles between what at present appear to be established trading partners. Given that privacy is important, I believe that the Minister will find the matter firmly on his desk in the coming weeks.


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