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Mr. Lansley rose--

Mr. Boswell rose--

Mr. Bruce: This is a complicated point, and I must finish it before I give way to either of my hon. Friends.

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New smaller users cannot use that particular lump of the spectrum. The new clauses would allow the Government to say, "We'll take out some of that spectrum so that it can be reallocated to new entrants, but we can give other parts of the spectrum, perhaps in less efficient areas, to BT or Cable and Wireless, which could utilise them because they have a wide range of users."

1 am

Mr. Boswell: I am most grateful to my hon. Friend for giving way. Does he have at the back of his mind the example of airline spots, which is not identical but closely cognate? For example, at Heathrow, British Airways has a preponderant allocation of the total available slots--some people argue that that system should be relaxed.

Mr. Bruce: Yes, it is historically the case that the person who arrives first bags the best area. We are all committed to encouraging competition, and Oftel is saying that competition will work better if the best areas--the Heathrows--are spread more evenly among the many operators rather than the few.

Mr. Lansley: I am grateful to my hon. Friend for giving way. I was hoping to intervene when he was rightly making his point about the switch from analogue to digital. Does he agree that the commercial imperatives that are pushing firms in the mobile telephone sector rapidly from analogue to digital are not reflected in the broadcasting sector? Is it not perverse, therefore, to implement an additional mechanism to push mobile telephones and their operators from analogue to digital when the Government do not seem to want to use the mechanism of pricing spectrum to push broadcasters from analogue to digital?

Mr. Bruce: That is a problem which all Governments face. We have heard about the influence of the Department of heritage, or whatever it is now called--we used to call it the Ministry of fun.

Mr. Boswell: The Department for Culture, Media and Sport.

Mr. Bruce: I thank my hon. Friend--it is good to have a prompt available.

The idea behind making people bid for a broadcasting licence was to ensure that they acted efficiently, but broadcasters are given a massive allocation of the spectrum, which could be available for other uses. The public and the Department for Culture, Media and Sport say that we must ensure that people can continue to use their analogue television sets for 20-odd years. I understand that, as Members of Parliament, we shall all receive letters when pressure is put on broadcasters to give up their spectrum.

The new clauses would provide for a pricing mechanism that could make the broadcaster say, "If we can get rid of the analogue as quickly as possible, we can make millions by transferring it to another operator." They might then spend those millions of pounds on subsidising set-top boxes for their consumers, for example. We should allow the market to help them to do what they want, and the consumer--who is barely mentioned in the Bill--to afford the new technology.

Mr. Ian Taylor: My hon. Friend makes a point that I made earlier, but I intervene to say that I think--I am sure

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that the Minister will leap to the Dispatch Box to confirm whether I am right--that the Government have announced the date on which the analogue spectrum for mobile telephony will be switched off; it will be some time after 2000. I wish that such a pugnacious approach had been applied to digital television as well.

Mr. Bruce: I see that the Minister does not want to intervene, but I am sure that, if she knows the date, she will want to tell us it when she winds up the debate.

In the previous Parliament, I introduced a private Member's Bill on telecommunications fraud. At the time, the Bill was intended to help combat fraud on analogue telephones. As promoter of that Bill, I thought it essential to switch from analogue to digital because people who wanted to hack into an analogue telephone would hack into mine as we might upset their nice little business.

I was talking about the exclusive and special arrangements that BT and Cable and Wireless, the two operators within the duopoly, had. No other operator has exclusive rights to that spectrum. Clearly, that is not compatible with the competitive multi-operator environment that now exists. Our new clauses allow the Minister to take that issue on board and to deal with it.

BT and Cable and Wireless also have access to spectrum for other services, especially fixed access and carrier markets. They have almost a monopoly there. They do not even want to switch their own services into those areas of the spectrum. Those services could be more efficiently run there. We are trying to say, "Look BT, you have got all of this." If it can sit on it and not worry, and is not even given an incentive to do anything about it, we shall not get the sort of spectrum management that the Minister has introduced in the Bill.

On the national channels for fixed links, the consultation document issued by the Radiocommunications Agency states:


That is the important issue. Spectrum should be available to other players. We should be able to open up this part of the market. Without our new clauses, there will be a continuing imbalance in a free market.

We hope that regulation will decrease in the future as the free market exists. The strange thing is that often, to get a free market, one has to introduce a lot regulations at the beginning to build up a framework within which people can compete.

Oftel talks about Government use of spectrum. It encourages the Government to free up their own spectrum and to use it to advantage. It is possible that the incentive for the Chancellor to get out and free up the spectrum--to go to the MOD and all sorts of people--could be in the Bill. Our new clauses provide more flexibility to allow that to happen.

Oftel certainly welcomed the suggested review of the licensing procedure and the increased transparency. We talked in the debate on an earlier set of amendments about helping that process on. Oftel questions whether those services for which simple pre-packaged licences were proposed should be licensed at all. I shall not go into that paragraph of Oftel's response to the consultation

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document. It is very useful, but it is not directly germane to the new clauses. It is a good point to say that the less regulation that we have on things that do not require licences the better. That allows short-range spectrum not to be completely controlled. We can just let people get on with it.

On the pricing principles, Oftel


We discussed in Committee how the Government would deal with those issues, but there is no mechanism within the Bill to ensure that the Government, Oftel and the Radiocommunications Agency can deal with those sort of pricing principles. That is what is contained in our new clauses.

In the absence of efficient prices determined by trading and auctions, it is important that administratively set prices approximate as closely as possible to those that would emerge from a freely operating market. The new clauses deal directly with that.

I shall not deal with paragraph 13 of the document, which I did not understand when I read it so it did not give rise to any new clauses.

In paragraph 14, Oftel states that the methodology for setting administrative prices should take account of alternative uses for the spectrum in question, rather than just the cost of a hypothetical alternative technology for a given use. That will not necessarily produce the most accurate and sensible way to use spectrum.

That approach might have an impact on prices for mobile and personal communications network use, and might allow prices to take account of the different propagation characteristics of different mobile frequency bands. A band of mobile telephony could be put up for auction, and that would create a particular price. The Minister may later allocate other spectrum for mobile telephony. If the previous band was worth £10 million, it might be assumed that the next band was worth the same amount. However, even if the two band widths were the same, they may not be equally efficient for delivering the service, and the pricing should reflect that. Our new clauses would help the Radiocommunications Agency with a more sensible and sensitive approach to pricing.

The next paragraph of Oftel's response deals with enforcement, which does not link directly to the new clauses. I simply mention it so that no one will think that I am trying to hide something that we should discuss.

I have gone through a complex set of amendments as speedily as I could. As we are modernising the procedures of the House, we should have a procedure that allows us to read the full document into the record. That would have saved time, and would have saved the Deputy Chief Whip from yet another visit to the Chamber. It is good to see him so cheerful at this time of night. I am sure that he is extremely interested in the subject, and that is why he is here.

I urge the Minister to accept some, all or at least one, of the new clauses, which would help the Government to manage the spectrum as they wish to do.


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