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11 Mar 1998 : Column 693

Mr. Lansley: My hon. Friend referred, if I heard him correctly, to Oftel's view that the Radiocommunications Agency will ensure that hoarding does not occur. He rightly says that one of the new clauses specifically addresses that point. The implications of Oftel's letter is that it expects that the Radiocommunications Agency will be able to achieve that. I am not clear from looking at the Bill--unless it is somehow hidden in the enabling power on regulations--how the Radiocommunications Agency will achieve that without benefit of the new clause.

Mr. Bruce: In short, it will not. The point made by Oftel is that the Radiocommunications Agency understands that the issue is important, will do further work on it and will come forward with proposals. One suspects that those proposals will be for further legislation, which the new clauses would short circuit.

There are clever people at the Radiocommunications Agency and even cleverer people in the DTI. Some solution to enable secondary trading may be found and people may be allowed to release the spectrum early, as we seek, without the benefit of the new clauses or new legislation--but I do not see how. If I did, I would not even have spent an hour drafting the new clauses, which are directly derived from a document to which I shall refer. It is very important that the House understands where Oftel is coming from. I have simply used my own thought process to try to introduce points without being out of order. I was quite amazed that Madam Speaker acknowledged that the subject of the new clauses had not been dealt with and that the new clauses were, therefore, in order.

This document is Oftel's response to the Radiocommunications Agency's proposals for implementing spectrum pricing--which the Minister had in her hands when she was considering how the Bill should be framed. She has now had many months in which to consider the new clauses and I hope that some of them might be accepted--although I spoke to her earlier this evening and she did not give me much hope. The document states:

That is at the heart of what we are trying to do in our new clauses.

Mr. Lansley: My hon. Friend makes a useful point. Given that one does not want to imperil those who have investments in or grandfather rights on existing licences, there will, of necessity, be only a limited amount of spectrum available in the first instance--unless one is able to recover some additional spectrum from some of the users who are relatively over-provided, such as those within Government or broadcasters. Does my hon. Friend agree that there would be some advantage in trying to win a little extra spectrum for allocation into administrative pricing, particularly if it enabled the secondary market to set more accurately appropriate administrative pricing for those who have current fees but who should not be disturbed?

Mr. Bruce: In asking that question, my hon. Friend sets out the case extremely well. By chiming in with this document, we shall see how Oftel suggests that that

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should happen. The Bill aims to improve spectrum management, but it deals with only that little bit that is currently available and another lump that is likely to become available--but we do not know for certain when. Analogue television might have to continue if digital television proves to be a complete failure. The two components must work side by side. We need the right tools. The Liberal Democrats and my hon. Friend the Member for West Dorset (Mr. Letwin) have remarked on the speed with which things change. However, I must move on, Mr. Deputy Speaker, and I shall try to limit the number of interventions--and perhaps give way only in order to wet my whistle.

Mr. Letwin: I am grateful to my hon. Friend for giving way. The interchange between him and my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) prompts some very interesting reflections. Does my hon. Friend agree that there could come a time when it will be enormously important to use administrative pricing as a signal to the secondary market, and indeed to the primary bidding market, in order to ensure that optimisation occurs at a lower point on the price curve? For example, if we want to see a wider spread of the use of a particular technology, we might want to ensure that the bidding resulted in a low rather than a high price, with tough conditions on coverage. Administrative pricing might be used to that end.

Mr. Bruce: Indeed it might. Probably the most important issue--to which new clause 5 refers--is allowing people to trade spectrum that they already own. We have seen how that becomes very popular with owners of spectrum, who find that something they are not using terribly efficiently suddenly has enormous value. They can then put their share on the market and make a profit, while releasing the spectrum for other people. If we leave only a tiny amount of spectrum for the new services, the providers will have to pay enormously high prices. If a lot of spectrum were available, the consumer would benefit. I am only halfway through my first paragraph, so I must continue. The document then states:

Mr. Deputy Speaker (Mr. Michael Lord): Order. I must remind the hon. Gentleman that although it is permissible to read from documents in the House, it should be done briefly and not at length.

Mr. Bruce: Indeed, Mr. Deputy Speaker. I think that the document is relevant, but I will take your guidance and skip through it. However, it is a pity that one cannot have a document fully put into Hansard, which would have been the most efficient way to do this. I am trying not to misquote Oftel, but I will paraphrase wherever I can to speed up the process. It is important to get the first paragraph down, as it concerns the principle that Oftel is dealing with.

The document continues:

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The next paragraph deals with the allocation of spectrum that had been given historically to both BT and Mercury, which is now known as Cable and Wireless Communications--it may even have changed the name again since the document was produced. A large amount of spectrum has been given to those two large companies and there is no incentive for them to use it efficiently or to migrate out of the spectrum allocated to digital broadcasting or fibre. Oftel certainly wants that facility to be made available.

On analogue broadcasting and related fixed-link services, the licences issued under the Broadcasting Act 1990 have already been subject to a market-based process through competitive bidding. Again, Oftel points out that there is no real incentive for someone buying spectrum for broadcasting to use it efficiently. Effectively, those companies have a licence to broadcast. There are ways in which to use the very same spectrum for other services, but there is nothing to encourage the BBC, Channel 5 or whoever to use it efficiently.

The document continues:

Often an enormous amount of frequency is taken up by that.

Mr. Jon Owen Jones (Lord Commissioner to the Treasury): Which clause does this relate to?

Mr. Bruce: All the new clauses are relevant and in order. I do not believe that it is the job of the Whip on duty to advise the Deputy Speaker on what is or is not in order. We are speaking to the group of new clauses and I can assure the hon. Gentleman that they are very much in order. The way the system works gives people the tools. I could certainly talk at great length if the hon. Gentleman would like me to. I am attempting to get on and to be as brief as I can. Sedentary interventions from the Whip on duty, who thinks that he is speeding up the process, actually slow it down.

Basically, such a move to digital would be in line with using digital instead of analogue signals wherever possible. Certainly, mobile telephones, instead of having an analogue basis, are now digital. That is a more efficient way in which to use the available spectrum.

The steps taken by the Radiocommunications Agency to recover spectrum allocations that are inconsistent with the market allocation are important. BT currently enjoys 30 per cent. of all the available telecommunications spectrum below 30 GHz--my hon. Friend the Member for West Dorset was right to say gigahertz, not megahertz--and 50 per cent. of the fixed-link spectrum below 38 GHz. The agency points out that a useful element of the spectrum has been allocated to BT. Cable and Wireless Communications was also given the most efficient part of the spectrum for utilisation.

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