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Mr. Boswell: In the light of the Minister's assurances, and adding, solely as a point of substance, that we echo her warm praise for Don Cruickshank's record, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 10

Differential levels of fees


'. The Secretary of State may impose higher fees for those technologies which make inefficient use of the electro-magnetic spectrum than those which use the spectrum efficiently.'.--[Mr. Boswell.]
Brought up, and read the First time.

Mr. Boswell: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this, it will be convenient to discuss the following: New clause 16--Allocation of licences other than under section 3--


'.--When allocating licences other than by the procedures set out in section 3 (Bidding for licences), the Secretary of State shall have regard to the level of bids received in any similar circumstances when setting the fee to be charged.'.

New clause 17--Administrative pricing--


'.--When setting the level of administrative pricing for a particular section of the electro-magnetic spectrum, the Secretary of State shall have regard to the fee that might be levied if that section of the spectrum was used for a different purpose.'.

New clause 18--Pricing for different parts of the electro-magnetic spectrum--


'.--When setting prices for the use of different parts of the electro-magnetic spectrum for the same purpose, the Secretary of State shall take into account the variations in cost to the operators of using different parts of the electro-magnetic spectrum.'.

Amendment No. 2, in clause 1, page 1, line 15, at end insert--


'(2A) The sums prescribed or determined under subsection (2) shall not in total exceed by more than twenty-five per cent. the sums charged for licences in the financial year in which this Act is passed.'.

Amendment No. 12, in clause 2, page 2, line 38, at end insert--


'(d) the relative investment required to provide a service utilising the respective parts of the electro-magnetic spectrum.'.

Amendment No. 14, in clause 3, page 2, line 45, after 'regard', insert 'both'.

Amendment No. 15, in page 2, line 46, after 'spectrum', insert


'and the securing of investment in development of telecommunication services.'.

Amendment No. 16, in page 3, line 18, leave out


'as a cash sum'.

Amendment No. 17, in page 3, line 22, leave out


'as the amount of a single payment or'.

11 Mar 1998 : Column 714

Amendment No. 18, in page 3, line 23, at end insert


'subject to a limitation that the payment which may be bid shall not exceed 5 per cent. of the income wholly or partly attributable to the holding of that licence'.

Amendment No. 7, in page 4, line 10, at end insert--


'(9) The sums payable to the Secretary of State under this section shall not exceed £1,000 million.'.

Amendment No. 10, in clause 10, page 6, line 3, at end insert


'except as provided in subsection (3) below.
(3) Section 3 of this Act shall not come into effect until Community legislation is passed setting for all Member States rules for bidding for wireless telegraphy licences.'.

2.15 am

Mr. Boswell: Although the new clauses are set out at the beginning of the group, those in my name and the names of my hon. Friends essentially rehearse matters to which the Minister has already replied concerning the flexibility of pricing. I do not intend to reopen those issues at this hour. The group contains a number of amendments tabled by my hon. Friends, and it is for them, rather than me, to comment on any matters that they want to raise.

Briefly, I shall return to the points of substance that stand in my name. These are matters of great import and I am not sure that I would necessarily and realistically expect the Minister to accept them as they stand, but they send out an important signal about the costs of the operation. The hon. Lady will recall from debates on Second Reading and in Committee that there is a real doubt--perhaps I should say a suspicion--on the Conservative Benches that the mechanism offers the potential for a significant revenue-raising operation. We tabled the amendments in that spirit and to give some flesh to the assurances that the hon. Lady has already floated in Committee.

To deal with them briefly, amendment No. 2 prescribes that the total uplift in income should not


That might be a reasonable extra accrual of revenue. Indeed, at an earlier hour my hon. Friend the Member for South Dorset (Mr. Bruce) was metaphorically licking his lips at the almost boundless revenue-raising possibilities that he envisaged from that source. We will not hold that against him, but we want a practical limit. An alternative way would be found through amendment No. 7, which imposes a limit on the total return to the process of £1 billion. I invite the Minister to comment on those amendments.

Equally, amendment No. 18, on the bidding process, would restrict the cash sum payment to 5 per cent. of the estimated income from the issue of the licence. That would curtail any attempt to buy licences regardless of cost, perhaps to close them down or put competitors out.

Finally, to make the point, amendment No. 10 suggests that commencement of the Act might be deferred until the Community rules on spectrum allocation are clear. That echoes a point that the Minister made earlier, which is that we clearly cannot conduct our operations purely in a vacuum and it is important that we are sensitive to that, that we have some awareness of what is going on in other countries, learn from their experience and share it.

11 Mar 1998 : Column 715

There is also a practical point. I think that I reversed my anecdote. It should have been that the car radios set off all the garage doors in Kent--I cannot remember which way it went, but it does not really matter. The point is that, if two radio systems adjoin each other, they will inevitably impact. Therefore, I am convinced that it is important for the Government to take serious account of what is going on in the near continent.

Ministers should have regard to the fears that have been expressed that this is a major fund-raising exercise. Next week, the Chancellor will open his Budget. I doubt whether he will be talking explicitly about this, but we would deprecate any attempt to raise incalculably large sums through the back door in a way that had not been covenanted, has not been flagged by Ministers and would amount to a substantial breach of faith. I hope that the Minister will give us assurances, which we can then test against the way in which these measures and the pricing formula pan out in practice.

Mr. Letwin: I intend to be enormously brief. I want to amplify the point made by my hon. Friend the Member for Daventry (Mr. Boswell) on new clause 16, with a slight nod towards new clause 17. I hope that, not only in her closing remarks this morning, but, more important, in her subsequent considerations in the Department, the Minister will take account of the intention behind the new clauses.

It is extraordinarily important that no future holders of her office should disjoin the administrative prices that are set for some parts of the spectrum and the bid prices that are established in the open market. That is not to say--my hon. Friends have been careful in phrasing new clause 16--that there may be no difference, but we tabled the new clause to ensure that any Minister responsible for administrative pricing refers back to the relevant information from the bid prices.

Any decision that is made about a particular part of the spectrum without regard to the bid prices could distort the entire market. I am sure that the Minister will assure us that it would be her usual practice to refer to the bid prices--the main intention behind new clause 16 is to ensure that she puts that on the record, so that we have a clear understanding of how Ministers will deal with administrative pricing.

Mr. Lansley: I welcome what the hon. Member for Ilford, North (Ms Perham) said about radio taxis, which reminded me--this may amuse the hon. Member for Cambridge (Mrs. Campbell), who has been very patient during our proceedings--that Camtax, which operates in both her constituency and mine, has radio licence No. 1 for these purposes. I do not know whether she knew that, but it is another distinction which falls on our constituencies.

New clause 18 would enjoin the Secretary of State to


when setting administrative pricing. An example of what I hope the Minister would take into account is the difference in the infrastructure costs of delivering services between operators at 900 MHz and those at 1.8 GHz. The propagation characteristics of the two affect the costs incurred in providing a service. It would be wrong for administrative pricing not to reflect the infrastructure

11 Mar 1998 : Column 716

costs of providing a service at that higher frequency, which would necessitate the construction of more telecommunications masts.

Amendments Nos. 14 and 15 are linked. They would enjoin the Secretary of State to take into account


I hope that the value of that is self-evident, but I shall relate the amendments to a specific issue on which I would welcome the Minister's reassurance.

In our previous debates, Ministers said that they had no intention of applying spectrum pricing to the fixed-link radio operators operating at 10 GHz. The issue is an important one for them. Such operators have an onerous roll-out obligation, which involves the acquisition of additional spectrum in order to meet the obligations that they have taken on. Having done that under one regime, operators have a sense of jeopardy about moving to a different regime.

To pursue the issue of Ministers' present and future intentions, will the Minister confirm either that the Government will not impose spectrum pricing while the 10 GHz operating companies meet their current roll-out obligations, which means not before 2003, or that, in the event that the Government impose spectrum pricing before 2003, Ministers will accept that that will cancel or, perhaps by agreement, mitigate companies' roll-out obligations?


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