Examination of Witnesses (Questions 600
- 619)
TUESDAY 12 MARCH 2002
RT HON
TESSA JOWELL,
RT HON
PATRICIA HEWITT
AND MR
ANDREW PINDER
600. Now let me ask you about something for
which you are responsible. Convergence can only truly come about
when there is a real broadband network throughout the United Kingdom,
because without broadband you cannot have television sent down
the internet network; you cannot have high speed data transmission
either. Although this country can quite rightly clap itself on
its back for having a very high percentage of people on the internet,
and one of you secretaries of state said we have the highest penetration
of digital television in Europe, 37 per cent instead of 16 per
cent average, we cannot clap our hands on our back for the penetration
of broadband networks, whether I gather we are only 22 in the
world. How are we going to see true convergence by seeing broadband
available to everyone?
(Ms Hewitt) If I can kick off on this, and Andrew
Pinder, our e-Envoy will probably want to develop some of these
issues around broadband. Clearly, pushing out broadband, getting
high speed internet access to homes and businesses is going to
be hugely important if we are, both as individuals and as an economy,
to take advantage of the potential of what is happening in the
communication and IT sector. Having said that, I think that there
is too much readiness in part of the media to simply talk down
what has been happening in the United Kingdom and focus only on
the fact that so far, and we are looking at a very short space
of time, the actual take-up of broadband has been very slow, very
slow indeed, compared, particularly, with a country like Korea
which is number one in the world, where broadband communication
is now something over 10 per cent. This remains very early days.
What we have done is to pursue a policy of competition in infrastructure
provision, including in broadband. So that we now have not only
BT supplying broadband and making broadband available through
ADSL technology so it is now accessible to about two-thirds of
the population; we also have about 100 internet service providers
who are taking BT's wholesale broadband product and retailing
it themselves. Alongside that we have the two cable companies,
also between them covering about 50 per cent of the population.
What we have seen in the last year has been a pretty effective
process of competition. We have seen the prices for cable across
an area where cable is available falling quite significantly,
now amongst the lowest in the world; and of course BT, whom my
colleague Douglas Alexander was challenging last autumn to get
its broadband prices down, has now (under new leadership) responded
to that challenge and announced, a couple of weeks ago, a cut
of about £10 a month in broadband offering. Those prices
will affect not only BT but also all these ISPs who are using
the product. When those new prices come on stream, as they will
do next month, and I assume they are all backed up by some fairly
significant advertising to the consumers, I think it is reasonable
to expect that we will see quite a big increase in broadband take-up.
The other point I would makeyou absolutely rightly referred
to the enormous success we have had in Britain in terms of narrowband
internet installation, which is too often overlooked. If you remember
we were an early adopter, particularly in Europe, to get flat
rate internet dialogue connections very, very cheaplywe
are amongst the cheapest in the world for those connections. Ironically,
that had a temporary effect of creating such a big price gap between
the cheap "eat all you like" dial-up connections we
had and the broadband connections. There was a big price gap there.
Whereas in Germany, which does not offer a flat rate subscription
for dial up internet, the only way you could get flat rate subscription
was to go straight to broadband, so pricing structures were very
different. That problem changed dramatically with the changing
in pricing that I referred to; but the fact that we have got this
very large installed base of narrowband internet connections means
there is a platform of consumers from which companies can now
move people directly on to broadband. I was talking last week
to Steve Case, who is now the Chairman of AOL TimeWarner, one
of the leading exponents of convergence in action, and he was
saying he believes that the policy framework in the United Kingdom
is absolutely right. He is deeply frustrated about the situation
in Germany, with which we are so often adversely compared, where
there is no competition whatsoever. It is very difficult for AOL
to get to consumers.
601. Do you share my concern though that the
definition of broadband is unclear? You mentioned the AOL TimeWarner
example. If AOL TimeWarner is going to be able to present Warner
Brothers television pictures down broadband, broadband has to
be very broad indeed. You have said that broadband was available
to two-thirds of the population if they wanted to take it up.
You identified the problem, rightly, of getting people to take
it up. Is it not the case that actually true broadband is only
available to something like one-third of the population? What
you are really talking about is a broader band than narrowband;
and BT is not really able to offer the breadth of band width to
give you true convergence which is, after all, what this inquiry
and the Communications Bill is all about?
(Ms Hewitt) We define broadband as moving up from
500 kilobyte/second. There is a whole range of broadband technologies
and broadband speeds. The important thing is to give customers
real choice here which of course increasingly they are getting,
not only from BT on its own but from retail suppliers and also
from cable. Different customers are going to want different applications
on their broadband, and of course the uses to which DSL technology
can be put are growing very rapidly, including the availability
of television down DSL.
(Mr Pinder) I would like to really just reinforce
what Patricia is saying. This is a developing market. We are seeing
really a spectrum of services coming through, from flat rate and
narrow band through the introduction of relatively slow broadband.
I would agree with you that the current broadband, which some
would define as going from ISDN at 128K, we would accept this
is not as helpful a definition. Gradually those products are dropped;
newer products coming on to the market are bringing the speed
up. Perhaps in response to BT's price cut we have seen NTL coming
on with 1 gigabyte. I am sure as time goes on there will be more
and more faster products. We will see products in the two, four,
eight and ten meg area, which is really what we need to see. I
am sure they will come.
Derek Wyatt
602. Mr Pinder, since you do not belong to either
of the two departments, I wonder if you could tell us whether
it would be better if you were either a minister or the person
who was not e-Envoy but a minister; and, if he was a minister,
whether he should be in the Cabinet Office, DTI or DCMS?
(Mr Pinder) Personally, I am rather glad I am not
a minister sometimes, seeing how they are treated and seeing their
workload! No, I think it works perfectly well actually. There
is an official sitting in the Cabinet Office able to range very
widely indeed, not just around the government but outside government.
I am in a very privileged position and can operate, I think, quite
effectively in making my voice heard in a wide community and across
departments. I have got some pretty impressive back-up. Patricia
is responsible for the affairs in Cabinet. We actually do have
an e-Minister in Cabinet, and of course the Prime Minister takes
an interest in these matters as well. I am not entirely sure that
having a minister in this role as well would do anything other
than slightly muddy the water. We have a Secretary of State who
can shout in Cabinet and me operating at the official level in
a fairly flexible manner, which seems to work.
603. Can I come back to the digital television
sets and television sets with switch-off. We buy a new television
set every eight years, so if you are buying in 2002 it will last
until 2010, so the switch-off date becomes rather critical. When
we raised this previously with Patricia when she was the e-Minister
she said, if I remember correctly, that we could not actually
get digital television because the EU had some regulation that
stopped us from actually saying to the TV manufacturers, "You
must deliver to the market now digital television sets".
Yet I said to you, in 1936 the Home Office said, "If you
want television sets in the UK you have to have 405 lines",
and then they said, "They have to have 625 lines". In
a previous life we have dictated to the market, so why can we
not do it again. I wanted an update as to why we cannot tell the
market in 2005 every set must be digital.
(Tessa Jowell) I think in response to Michael Fabricant's
earlier question I indicated that, as part of the Digital Action
Plan, it is intended to conduct a consultation in the first instance
on mandating the production of digital television sets, and that
will obviously go ahead. I think this has to be a decision for
the market. It also has to be a decision for consumer preference;
and the price of digital television sets is beginning to fall,
but they are still more expensive than analogue sets. I would
say in answer to your question, that we do not at this point have
a prediction for the proportion of population at the point of
switch-over that we would expect to own a digital television set,
rather than to have an analogue television set with a set-top
box. There is also, of course, the issue which is always raised
about the second, third and fourth sets in families. What I can
assure you is that the coalition is now established between the
government and industry, particularly on this, but clearly the
broadcasters also have a role and the BBC is committed to a digital
promotion campaign which we expect them to undertake, that we
have to sell the objective and the benefit of digital and there
is a hearts and minds argument, I think that the pace of market
adaptation will be influenced by the level of public demand. In
relation to television sets bought today which are still in perfectly
good working order in 2010, I think that by 2010 we will see households
with a combination of solutions. Perhaps the main television set
will be a fully digital one, but with set-top boxes providing
the necessarily digital capacity for the second, third and fourth
sets.
Chairman
604. But the then Government did not wait for
the market for consumer preference and hearts and minds when it
decided that cars should not be available using leaded petrol
any more. It made a specific decision which was interference with
the market on a matter of environmental protection. This is a
matter of the entire communications strategy of the country?
(Ms Hewitt) Indeed, Chairman, as Tessa has indicated,
we are looking at that with this consultation. We are looking
very seriously at the suggestion that we simply mandate digital
integration from a certain date; but the price issue is not a
trivial one. If you are buying a very expensive thousand pound
wide screen television then the additional cost of making that
integrated digital is a small proportion of the total price. If
you are buying a £50/60/70 portable for a young person in
the household to use, or whatever, then at the moment the extra
cost of making that digital is quite a significant price increase.
I think we are right to consult about that, rather than simply
to say, "Yes, that is what we are going to do". Secondly,
as far as the point about Europe is concerned, certainly we would
have to negotiate with our colleagues in Europe on the question
of mandating. Of course, that has important implications for the
industry, because they are not making sets purely for the United
Kingdom; they are making sets for the European and wider market.
We certainly need to look at that. Finally, we are, with the industry,
conducting some small scale pilots to look at all these practical
questions involved in moving towards digital switch-over, so we
can understand what the practicalities are of dealing with all
these second and third sets in households and the proliferation
of set-top boxes.
Derek Wyatt
605. I was in Sweden recently and they have
announced switch-off in 2007, so they have clearly gone through
all the questions and answers you are going through. Firstly,
have you been to see what they are doing; or have they been to
see you? Secondly, the DTI produced a very brilliant White Paper
on the Smart Knowledge Economy, and here we are, as Mr Fabricant
said, 22nd in the world for broadband and 13 out of 15 in the
EU for broadband roll-out. If we want, as the Chairman says, to
actually interrupt the market and do something dynamic, one way
we could do that is to give a Smart box away by annotising the
cost over three years, by making an addition to the licence fee,
so that very, very quickly we would be the smartest economy in
the world. What is your thinking and why are you not doing it?
(Tessa Jowell) The answer to that is, as I said when
dealing with Julie Kirkbride's first question, there is an eight
year time period between now and 2010, the outside boundary of
our date for digital switch-off, and policy will develop over
that time. Patricia and I are confident that the collaboration
between our two Departments, the drive which is now behind the
Digital Action Plan, which is a developing set of instructions
to government, industry and the broadcasters, will mean that at
some point, perhaps in five years' time, we will take stock of
the rate of progress on the basis of normal market mechanisms
of persuasion and price and so forth, and then have to consider
what steps need to be taken in order to make the policy realisable
within the time frame; but now is not the time to do that; not
at a time when new technology innovations are producing set-top
boxes which are cheaper than they have ever been before; when,
in a sense, the market is driving prices down both in relation
to digital televisions and set-top boxes. We should allow that
process to drive as far as it can and then there will be a point
at which we have to make public policy judgments about further
steps in the light of progress which has been achieved, but we
are not at that point yet.
(Ms Hewitt) If I may just add, the set-top box will
not necessarily give you a return path. There are issues here
about making sure that consumers themselves can use broadband
in both directions, and not simply receive digital into their
television, important though that is, and undoubtedly deliver
a wider variety of services.
606. All the time we wait we do become less
competitive?
(Ms Hewitt) No, I do not agree with that. If you look
both at the rate of take-up of digital television where, as Tessa
has said, we lead in Europe; if you look at the rate of take-up
on internet access, where we are amongst the world leaders; and
if you look at the pricing that we have got to the narrowband
internet access, where we are world leaders; if you look at the
steps we have taken to connect schools to the internet, where
we are the world leaders; and if you look at what we are doing
though the UK On-line Programme to enable access in communities
where there is a very low level of home internet access, because
of poverty, and sometimes digital television, we are doing a great
deal here to drive this forward. Of course there is still more
to do. I think it is a great mistake in this business to think
there is a magic wand you can wave here. Singapore, for instance,
at not insignificant public expense, has got everybody connected
to broadband, but a dearth of interesting content means that nobody
uses it. You do have to deal with both the infrastructure and
the content and understand the ways you can access this stuff.
The fact we have got such vibrant creative content industries
gives us another advantage in driving this forward.
Ms Shipley
607. I would like to begin by welcoming the
Secretaries of State and I think it is historic for select committees
to have two sat there; it is fascinating and too good an opportunity
to miss. Tessa said she would like to see this as a pilot for
other departments working together across cross-departmental structures,
not before time I suspect. There are serious problems with a lack
of that happening in government and previous governments, so welcome.
I am interested as to how you can work together without a communications
policy. Where are you going to jointly? What is your communications
policy? I can see how the two paths work, broadcasting and telecommunications,
but which direction do you hit jointly, together? It would seem
that, because you happily have a good working relationship, you
have been able to set up a very positive team and that is excellent.
How will that, in the medium term, be developed and maintained?
How would the public and businesses know to which department they
have to address something? Is this something that is just going
to fizzle out when your leadership is, perhaps, moved to other
departments?
(Ms Hewitt) Could I, perhaps, start by commenting
on that, Chairman? We are grateful to the Member for her comments.
First of all, the broader issue about joined-up working across
government. The important thing here, I think, is to embed this,
not just in the way that ministers work, because as you rightly
indicated ministers come and go, but to embed it in the way that
officials work so that it is in the institutional bloodstream,
if you like. The work that is being led, I think previously from
the Cabinet Office and now from the Office of the e-Envoy, on
joining up government electronicallyI do not want to give
the impression of any complacency but it is actually another world
lead. What we are succeeding in doing is making it possible for
officials right across government to access information, to build
their own community interest and to work much more effectively
and much faster across government than, generally, has been possible
with paper-based systems.
608. Secretary of State, where would you see
the problem located?
(Ms Hewitt) I think in terms of getting further joined
up working, this is very much to do with culture. Technology can
enable it but we need a culture change that is led by ministers
and by senior civil servants, which then encourages officials
to work in a different way and to share information. That, as
I say, is happening very effectively. On the policy framework
within which Tessa and I work, I think that was set out very much
in the White Paper from which the Bill stems. Essentially, what
we want to have is one of the most dynamic, creative content industries
in the world, supported and underpinned by one of the most extensive,
competitive infrastructures in the world. The big challenge there,
as several Members have reflected on, is indeed the challenge
of driving up broadband infrastructure in order that it can support
a much wider variety of applications.
609. In order to do that, and I do think the
content/infrastructure debate is a vital one, do you really think,
on balance, broadcasting can remain located in DCMS? Do you really
think that this is the way that you are going forward?
(Ms Hewitt) As we were saying earlier, it is absolutely
a matter for the Prime Minister, but it certainly is not causing
any problems at the moment. I think the industry and the various
groups and individuals who are concerned with this, by and large,
do know which department to address, but since we have a joint
team of officials working on this it does not really matter if
they are addressing their comments to the wrong department.
610. I think Patricia mentioned some comments
about the technological possibilities of joined-up working, but
what about the inter-personal relationships behind the scenes
in Whitehall and bringing those teams, in the medium term, together
and keeping it going, though the focus has moved somewhere else
in both departments when those people have been pulled off to
do other things? How is this going to carry on, this joint-ness?
(Tessa Jowell) I think the point about long-term sustainability
is a very important one. Arguably, this is the easy stage and
we have the excitement of new policy and very visible challenges
on which we have to deliver. I think you are right, I think that
there will be a degree of reorganisation around the boundary of
our two departments, in order to drive this policy forward, because
just as the policy development has been underpinned by a very
high level of joint working, so the support to OFCOM, particularly
in the early stages of its development, will have to be accompanied
by a similar degree of integration in the implementation capacity
of our two departments. Again, subject to our both being responsible
for making that happen, we will turn to that once the legislation
is under way. This isif I may just underline the pointa
challenge that has been faced by government across a range of
major areas of policy, and I hope that what we achieve will inform
that process.
Ms Shipley: This is the first time we
have had two of you sitting there and we can see the working relationship,
I think I am right in saying. So a historic moment. Thank you.
Mr Bryant
611. I think the biggest issue that concerns
me, as a Member for a seat where many people are excluded from
this digi-copia, is about universal access, especially because
certainly in broadcasting and in telephony we have had universal
access now for some 75, 80 yearsnot in everything but broadly
speaking. The first issue then is about the expense, because everything
we have talked about so far is an expensive piece of kit. If you
are talking about a computer etc, £15 a month is a lot of
money to many of my constituents. The thought of paying for additional
channels every month, even at £10 or £7 on ITV Digital,
is a great deal of money. I just wonder how important you think
development towards this free-to-air proposition is, which very
few people in the country still know aboutI know there
was meant to be series of adverts before Christmas but, I must
say, they passed me byand how important do you think it
is that digital terrestrial television survives?
(Tessa Jowell) I will start on that and start by saying
that you will be aware that in addition to the 2006-2010 window
for switch-off there are conditions which underpin that in relation
to the accessibility of digital signal and the affordibility of
digital equipment which, I think, relates back to the discussion
that we were having a few minutes ago. Those are tests against
which progress on the policy will be judged and there are also
tests which have to drive and set the impetus for the policy.
The second point is you will know that we are very clear in government
about the policy of platform neutrality, maintaining the three
platformscable, terrestrial and satellitein pursuit
of consumer choice but, also, recognising the point that you often
make about your own constituency, about the importance of DTT
in order to secure universal access. Platform neutrality is an
important driver of the universal access that is one of the tests
against which switch-over will be judged. Then, within that, dealing
with your point about content, yes, I think it is important that
as part of the offer there are good, free-to-air packages because
not everybody is going to want to pay for the subscription or
the premium services which are currently available. A good free-to-air
offering should be available and should be available on terms
that can be upgraded if people wish but if we can get to a pointwhich,
in relation to Derek Wyatt's opening questions is an important
one we do reachwhere there are lots of people who do not
want 200 to 300 channels but who will be happy with the 19 or
20 free-to-air channels now, and if the only cost beyond the set-top
box is the licence fee, then that is a good package and that is
a good driver of universal access. So I think there are both issues
in relation to universality by the combined contribution of the
three platforms, but also there are important issues for the providers
to secure what many people want, which is free-to-air with no
additional cost beyond the purchase of the set-top box.
612. I am still worriedand I am sorry
to be so narrowly parochialbecause it seems to me that
my constituency bears relevance to quite a lot of other constituencies
in the country because it has two factors which affect it: (a)
multiple deprivation indices and (b) the physical isolation of
topography makes it difficult for broadcasting of any kind. I
can tell, as I go up any road, who has gone digital because they
have got a dish, and that is the only means they have. We probably
have got up to more than 50 per cent now of digital television,
but I do not think that that necessarily means somehow that the
Rhondda has embraced the digital future. I am still worried about
the roll-out of digital terrestrial television. I am delighted
that BBC 4 now exists but there are an awful lot of people who
are paying for it in the Rhondda who will not be able to get it
until digital terrestrial television is an option for them. I
would urge you to be pushing the BBC to commit itself to further
roll-out of digital terrestrial television across the country.
(Tessa Jowell) There are two issues in relation to
digital terrestrial, at the moment. One is, obviously, the position
of ITV Digital, which made a statement the week before last. The
second is the adequacy of the technology. Here, the actions which
are specified in the Digital Action Plan are important in improving
the consistency and reliabilitythe general performanceof
the platform. You will be aware of the steps that are being taken
in order to improve that. I hope that what we have said persuades
you that we are determined to maintain the choice of access to
one of three platforms and to ensure that the free-to-air offering
justifies the continued payment of the licence fee, albeit linked
to the cost involved of purchasing a set-top box.
(Ms Hewitt) Before you ask another question, I wonder
if I could just expand a little bit more on this, because I think,
quite rightly, your concern was not simply about access to digital
television.
613. No, indeed not.
(Ms Hewitt) As in the very disadvantaged estates that
I represent, you can have very high take-up of digital television
through a Sky subscription with nothing else. That is very important.
I know that the National Assembly for Wales is very committed
to ensuring that, for instance, the Lifelong Learning network
should be accessible in each local authority area. That, if it
can be achieved, would not only help to secure, obviously, digital
broadband access into the schools but it would also provide a
sort of core point of presence within the local authority area
that might then be leveraged for other users. One of the crucial
things we are looking at in the broadband roll-out strategy is
how we can bring together all the different bits of public sector
procurement at the moment, which are all too often very fragmented,
in order that the private sector infrastructure investors can
see that it is more likely to be worth their while to make the
investment. We are also looking at how, as we do bring the broadband
procurement together within one local authority areaor,
perhaps, a broader regionwe can then not only get it to
the schools and the other public sector sites, very few of whom,
as you well know, in Wales have got broadband access, but we can
start to make it available to small businesses.
614. I still feel as if an early date for broadband
being available in my constituency is probably going to be 2006-2007,
and it seems to me that by then the economy of South Wales will
have moved on a very long way, and there is a danger that, especially
in former mining communitieswhere people would not have
gone to live if it had not been for coal in the first placewill
be left aside economically. There is clearly a challenge here
because we are talking about two ministers here, a minister in
Scotland and a minister in Wales and we are talking about health
ministers and education ministers as well. I just wonder how one
can get the kind of single-mindedness that one needs to be able
to crack this.
(Ms Hewitt) Can I turn to Andrew Pinder on this, because
it is one reason why we have the e-Envoy and that central office,
because joining up all the pieces is complicated.
(Mr Pinder) One of the things we are trying to do
is make sure that we co-ordinate any public sector procurement
in the broadband area to try to maximise our purchasing power
and get it into the places where you would not, as it were, ordinarily
gowhat I call the Heineken test. That is work which is
currently going on. Departments are going through the spending
round, as you know, so that they have put their bids to the Treasury.
Those bids are being analysed. In parallel with that, the Office
of Government Commerce is doing some work on looking at the practicalities
of how one aggregates both procurement at the national level and,
also, local authorities and other public bodies in a particular
area to make sure that we do get it out to areas as remote as
Rhondda and South Shropshire, which is where I happen to live.
Those areas suffer the same issues that you do, but without the
coal mines. So we are really looking at everything we can to look
at how we provide enough stimulus and enough purchasing power
to try to make sure that we maximise the areas we get broadband
to. I hope 2006 is an pessimistic assessment of yours.
Mr Doran
615. I will just follow on from those points,
but just a little less parochially. Tessa Jowell made it very
clear that there was a strong commitment in Government to neutrality
of platform and diversity of platform. Given the financial difficulties
of most of the platform providers, apart from Sky, are having
at the moment, how confident are you that they will stay in business
and continue to work as part of your strategy?
(Tessa Jowell) We have to await the outcome of the
process that ITV Digital are currently undertaking. We will continue
to take the steps that I outlined in response to Chris Bryant's
question to improve the efficiency of the platform, where those
steps rely on action by government. Clearly, the difficulties
facing the operating companies are a matter for them and the role
of government is to ensure that through the regulatory powers
that are available and the intervention of the ITC that the sort
of issues that diminish the attractiveness of the platform are
addressed. One of the problems has been the unreliability of the
signal and the inconsistency of reception and that is something
that we are addressing.
(Ms Hewitt) The Radio Communications Agency has been
working very, very hard with the digital terrestrial providers
to try and boost the signal and overcome some of the problems,
not least the issues that need to be discussed with Ireland in
the case of those west coast transmitters, in order to try and
ensure that we get more extensive and more reliable coverage.
616. It is not just ITV Digital that is the
problem because, if you read the reports, NTL and Telewest, the
two main cable providers have got, at least severe, financial
problemsdebts running into many billions of pounds. Does
government have any backstop if any of them fail?
(Tessa Jowell) In relation to NTL, they are restructuring
their present debt burden. There are certainly backstop powers
for government in relation to the use of the spectrum, but I think
it is important to be clear that we have two companies, NTL and
Telewest, and ITV Digital, who are addressing the commercial problems
that they are facing, and that is a matter for them. It is not
for government to get involved in the problems of the operating
companies. That said, the position of platform neutrality and
our wish to see the continuation of the three platforms remains,
and there is a distinct area for government intervention in order
to strengthen the viability of those platforms. Patricia has outlinedwhich
is very important in relation to cablethe action in relation
to increasing broadband access and I have outlined the action
which has been taken to improve the efficiency of the DTT platform.
617. I come to this from a particular perspective,
and that is Atlantic Telecom, based in my constituency. As you
will both recall, Atlantic Telecom collapsed, and, virtually overnight,
first of all, people who received cable television had it stopped
immediately, and then about a fortnight later they lost all their
telephone suppliers. What that showed to me, as the MP on the
scene, was a complete lack of consumer protection. I do think
that is a serious issue. I know that the telephone aspect was
being addressed by a number of meetings with Douglas Alexander,
but is there going to be any aspect of this in the Communications
Bill which you are drafting at the moment?
(Ms Hewitt) As you rightly say, Atlantic Telecom had
a very serious and immediate impact on the consumers who were
served by that company. As you know, both Douglas Alexander and
Oftel stepped in very quickly to ensure that, on the telephony
side, action was taken, not least to help them ensure that small
businesses were not left without telephone lines in the run-up
to Easter. We learnt some lessons from that and what has happened
as a result is that Oftel have ensured that they have got in place
a proper monitoring system so that they are close to the companies
and they can see where problems might arisean early warning
system, if you likeand there are proper contingency plans
for consumer protection to be put in place if they are needed,
and they certainly were in the case of Atlantic Telecom. That
will continue to be a responsibility of OFCOM when OFCOM itself
is up and running.
618. Now I am being parochial, because there
were two issues there which were important on the telephony side.
The first was the loss of the telephone overnight. I think you
may recall the requirement is 14 days' notice of the removal of
the service and, in the meantime, the only commitment is the retention
of emergency services. Effectively, that puts a consumer in a
worse position than somebody who has not paid their account. The
second is the removal of the numbers. As soon as Atlantic Telecom
stopped providing the service Oftel withdrew the numbers and because
they were in tranches of 10,000 no other provider would pick them
up. As the Secretary of State for Trade and Industry quite rightly
says, in the case of many small businesses that was devastating,
because for many of them the Yellow Pages is their main source
of business and they have had to wait, in some cases, nearly a
year for the new directory to be published. These seem to me to
be quite specific issues which need to be addressed, rather than
just simply monitoring.
(Ms Hewitt) They do need to be addressed and, as I
say, I do think there were lessons that needed to be learned from
the Atlantic Telecom collapse. That is what Oftel is doinglearning
those lessons.
John Thurso
619. I would like to pursue some of the points
that have been made in regard to broadband, but before I do that
can I ask one general question, which is to ask either of you
or both of youwhichever is appropriateto articulate
in a simple statement what is the principal policy objective of
the OFCOM Bill? What will be the key deliverables against which
this Committee and the outside world should judge success or failure?
(Tessa Jowell) The high-level objective of the legislation
is to deliver a communications industry and a communications regulator
to service the ambition of the UK being the most dynamic knowledge
economy in the world. There are then, within that, some pretty
meaty objectiveson my side of the shopin relation
to the broader broadcasting ecology, ensuring that we do two things:
that we preserve the distinctive character of public service broadcasting
in a context and in an environment where the market for the commercial
broadcasters is one which works effectively. In other words, that
the presence of public service broadcasters, with the privileges
that public service broadcasters have, does not distort the market
and act as a disincentive to investment. If I am talking to my
constituents, the second part of that rather than the first part
is what they would be interested in. Linked to that, I think,
is the point that Patricia has made about making it easier for
people, to demystify a lot of both the technology and the opportunities
that digital offers, both in terms of entertainment but, also,
in terms of access to public service information. I happen to
think that in 10 years' time we will look at the quality of public
service information which broadband makes possible to deliver
to our homes and it will change the pattern of our lives. I think
we are looking to a communications system that will service the
opportunities for changing people's lives, taking account of Chris
Bryant's pre-occupation, which is the pre-occupation of all of
us, that this very rapidly accelerating progress does not, in
turn, become a major driver for inequality.
(Ms Hewitt) Could I just check whether the question
was more narrowly focussed on the current Bill rather than the
main Bill?
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