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Mr. Richard Allan (Sheffield, Hallam): I too congratulate the Government on conceding the need for a specific reference to high-speed data transfer services. We have spent a good deal of time discussing a specific form of communications—broadcasting—and an inordinate amount of that time talking about one particular broadcaster, the BBC. I expect that we shall return to that subject later, but many of us consider the internet side of the Bill equally if not more important to where we are going with the communications industry.
Network services continue to become more important. The idea of a dotcom boom followed by a bust, suggesting that the dotcom issue has gone away, is nonsense in the context of what is actually happening to economic growth, and the amount of the economy that now depends on network services in the broadest sense. I believe that the importance of those services to broadcasting will grow over time, and that they deserve a high profile in the Bill.
The term "high-speed data transfer" is correct, although it will and should change over time. I think it right to leave Ofcom as the organisation on the ground, with contact with the industry and able to decide how "high speed" should be defined at any particular stage. I understand that, according to the legally mandated minimum requirement, telecoms providers should currently provide a line that transfers data at 2.4 kilobytes per second, while BT has a self-imposed minimum of 9.6. That provides us with something that is more or less useless as a universal minimum standard.
I see no reason not to have realistically high-speed minimum standards, imposed in a way that would allow the industry to deliver. It makes no sense to say that ADSL must be delivered everywhere via BT lines, because the technology simply does not allow that, but it does make sense to have a floor standard enabling investment decisions to provide technology on an even basis, and to enable that floor to be raised over time. I hope that Ofcom will interpret "high-speed data services" in that sense.
John Robertson: I entirely agree with what the hon. Gentleman is saying, but surely the state of the plant that companies must use would not allow the service for which he asks. Should not the Government invest in the network so that it can be provided?
Mr. Allan: There are instances in which specific Government investment is helpful. That has been taken up by regional development agencies, and I consider it an appropriate form of intervention. My colleagues in Cornwall used objective 1 money for a project to make up for the difference between the cost of BT's putting in the standard equipment that it would have put in anywhere else and the upgrade cost in Cornwall. That, I think, makes sense. I am more worried about cases in which Government investment constitutes a substitute, or creates competitors where there is an existing business—disrupts the market, in other words.
I have mentioned to the Minister concerns raised with me about Scottish Enterprise activity. Providers, including those based in Scotland, argue that the intervention is creating spare capacity where capacity already exists. Our interventions should be carefully targeted. We should recognise that for the vast majority of people in the United Kingdom, the market will provide. I agree with the hon. Gentleman that where it does not provide intervention is appropriate, but intervention should not be in lieu of the market; it should happen in specific cases of market failure.
6.30 pm
Mr. Lansley: Can the hon. Gentleman help to clear up a slight confusion? He says that, as the definition of high-speed data transfer services changes over time,
Ofcom will be able to do something in relation to it, but I cannot for the life of me work out what precisely Ofcom is supposed to do in relation to those services that, according to its other duties, it will not be doing in relation to other communications services and networks.
Mr. Allan: The hon. Gentleman makes the case that the Minister made in Committee. He refers back to the general duties of Ofcom, whereby it has responsibility for electronic communications in the wider sense. However, it would be helpful to include the additional wording
- "the desirability of encouraging . . . high speed data transfer throughout the United Kingdom"
Mr. Lansley: Ofcom's responsibility is, as Oftel's has been, to determine access pricing into BT's network, and the gap between the BT retail price and the wholesale price would apply regardless of the availability of that duty. The hon. Gentleman keeps talking about the requirement that the service be available right across the country, so surely he is talking about a universal service obligation. Is he talking about that, or is he not?
Mr. Allan: The amendment proposes something that is short of a universal service obligation but would be a clear objective for Ofcom. The situation is not the same for Oftel. When Ofcom is making an adjudication and dealing with telecom providers such as BT, it will do so on the basis that one of its objectives is the desirability of access throughout the UK. If there is a clear steer from Ofcom, because it has that objective, it will help to shape the investment decisions of all the companies in the sector, but it is not a substitute for those decisions.
If we all have a common interest in ensuring access to high-speed data services throughout the UK, that additional objective can do no harm. One might argue that it is unnecessary, but to argue that it takes us back is entirely wrong. It could take us forward and it would be helpful to include a specific reference to such access. It does not mean that there is a universal service obligation. That is a separate debate and relates to other clauses that we discussed in Committee.
The key point to note about the desirability of broadband access provision is that broadband is not just faster narrow band; it allows new forms of functionality. Obviously, additional functions kick in with every speed increase. One can do some things at ADSL, the normal BT broadband speeds, while other things can be done only at faster speeds. The hon. Member for Lichfield (Michael Fabricant) referred to video, for example, which will not kick in until a later date. However, as we climb this ladder, new forms of functionality are available on every rung, which are key to the competitiveness of UK industry.
Competitiveness is the basis for South Korean investment decisions. It stands to reason that businesses that can act more effectively and speedily have a significant competitive advantage over those that are on a slower track.
Michael Fabricant: Does the hon. Gentleman agree that if firms are to diversify and to be able to offer certain services by web, they will have to transmit even still pictures relatively fast? Whether they use a local or a distance server, minimum standards of broadband are required, at least something of the order of 400 kilobytes per second and not the low levels that are currently included in the definition of broadband.
Mr. Allan: The hon. Gentleman is right to say that different definitions are used. That relates to the target arguments. The Government have a target to increase use and so they are casting the definition as widely as possible. My sense is that all the telecom providers want to give as fast a service as they can—the faster the service, the more they can charge for it—so there is the prospect of, if not universal coverage, fairly high rates of coverage at 512 kilobytes per second, which is a functional rate for moving around large graphics files. That prospect is within reach.
I hope that the amendment will enable Ofcom to instruct the telecoms on all the issues referred to in other parts of the Bill, as the hon. Member for South Cambridgeshire (Mr. Lansley) pointed out. There will be a framework so that the companies know that high-speed data transfer throughout the UK is one of Ofcom's desirable objectives and that that will influence its actions as a regulator. Its decisions will be made through the lens of that provision. That will add something, and I am pleased that there is a specific reference to data transfer, as opposed to broadcasting.
Brian White: I fear that we are in danger of repeating the debate on broadband that we held in the Chamber on 1 May. I am astounded by what I have heard. The hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) admitted that public interest tests were reasonable, and then the hon. Member for Lichfield (Michael Fabricant) agreed that Government intervention in the market was an acceptable way forward, thus turning on its head 20 years of the Tory ideology that the free market will deliver.
Mr. Whittingdale: I should hate the hon. Gentleman go away with the impression that I welcome a public interest test. I made it fairly clear that I was not in favour of the Government's adoption of a public interest test.
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