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Sir Robert Smith (West Aberdeenshire and Kincardine): I certainly found the last few speeches quite informative about the range of tensions involved in trying to achieve what is best for our constituents, especially in trying to get new technology and broadband into rural areas. The Minister will know, from having met my hon. Friend the Member for Gordon (Malcolm Bruce) and myself recently, just how important such things are in areas such as the north-east of Scotland.
The great challenge for that area is that its rurality involves a dispersed population. In many parts of north-east Scotland, there is no constraining physical geography that, as in the highlands, forces people into nodes of population that can be tackled by conventional connections. The population is more dispersed, so the attempt to get such technology into the area is even more challenging, yet it should be a very tempting area, given the importance of the oil and gas industry and the amount of data handled by many people who commute to the city of Aberdeen. The benefits of high-speed data links should be apparent, but there is a worry in the community about how to press forward.
Just lately, the pressure on BT and others seems to have had some effect. For example, the exchange in Drumoak has had its target level reduced to 150 registrations, which is achievable. Another community, Kemnay, already has 300 people signed up, but a target has not been issued. Having listened to the debate, I do not know whether the amendment will improve the situation, but—as the hon. Member for South Cambridgeshire (Mr. Lansley) said—the universal service obligation is a long-term aspiration. It is certainly a challenge to reach the last bits of the really rural areas.
BT lobbied Members of Parliament last week and told us that it could cover 90 per cent. of the country under the conventional rules that affect the market. It felt that it could cover up to 97 per cent. of the country with some tweaking, but in those last exchanges the number of years that would be needed to see a return on BT's investment would need to be changed. Would the amendment affect Ofcom's ability to allow BT to run the market in a way that would allow that last 7 per cent. of exchanges to be enabled?
Michael Fabricant: The hon. Gentleman mentioned exchanges, but BT are doing good work by spreading broadband out in the highlands and islands, and other parts of north-west and north-east Scotland, using the low earth orbit satellite constellation system. It does not involve exchanges and it is another way to supply broadband, but it is costly.
Sir Robert Smith: It also has a problem with the return of data and the ability for two-way communication. A company in my constituency is developing satellite
systems, and it is another solution for some rural areas. However, if the regulator can be convinced by BT, the ability to provide the conventional solution for more people will mean that they can use the same equipment in their houses to access the network. They can be on the same wavelength as everyone else and make best use of broadband. In another interesting innovation in my constituency, Scottish Hydro-Electric is using power lines to carry broadband.
Mr. Bryant: The hon. Gentleman will be aware that BT has argued that the reason it has to have the thresholds is for reasons of competition law. It cannot be seen to be subsidising an exchange because that would be anti-competitive against other suppliers. Will the Bill make it possible for BT to surrender that feeble reason for not rolling out broadband?
Sir Robert Smith: That is what I want to hear from the Minister, when he replies. Will the amendment allow those exchanges that BT argues need a greater rate of return to be enabled? That would be the quickest way to ensure that even more constituents gain access to broadband.
John Robertson: The hon. Gentleman mentioned the Scottish Hydro-Electric scheme, but that is not a new idea. Companies such as Thus plc have tried to do it in the past. Even British Rail tried it. The problem is that it comes at a cost, and where will the money come from?
Sir Robert Smith: We will find out, because the commercial trials are taking place in my constituency in Stonehaven, where the cost is roughly comparable to that of the BT equipment. It is two-way broadband, and the speed in both directions is the same. One of the greatest complaints that I received at the meeting I held with my hon. Friend the Member for Gordon was what ADSL is not the product that businesses want. They want to be able to send large data files as well as receive them.
The good news from BT was that our exchanges happen to be made by Fujitsu, so it is possible to use a patch to make them into two-way fast exchanges. However, I want to know whether the hon. Member for South Cambridgeshire is right and the Government have accepted the amendment to get themselves off the hook and removed from any role in driving broadband forward in rural areas. Will the amendment have any effect on the regulator? Will it allow the regulator to adopt a different model in rural areas to ensure that the maximum number of people benefit in the quickest possible time from this new market?
Mr. Timms: I welcome the fact that we have had a lively and interesting debate about broadband—as we often do. I also welcome the hon. Member for Lichfield (Michael Fabricant) to the Front Bench. We enjoyed his contribution and look forward to many more, on these topics and others, in the months ahead. He quoted me correctly when he said that I had argued against the inclusion of the term "broadband" in the Bill, but the amendment uses the alternative term "high-speed data services". That is helpful. The data that we use to compare progress on broadband in the UK are compiled on a consistent basis with the way in which
data are compiled in Europe and elsewhere. That is one of the arguments in favour of using the definition in the Bill, because it is used elsewhere.When I joined the DTI last year, I was greeted by a headline in one of the computing newspapers that claimed that the UK was neck and neck with Croatia on broadband. We have come a long way since then, as the hon. Gentleman will—I am sure—acknowledge. He appeared to suggest at one stage that we might include basic rate ISDN in the broadband figures, and that double rate ISDN was equivalent to broadband. We are not including ISDN basic access in the broadband figures, and indeed there is a fundamental difference in that ISDN is not always on, as broadband is. That is a significant benefit of broadband.
Michael Fabricant: Double ISDN is in the order of 112 kilobytes per second—
Michael Fabricant: Yes, that is right. That rate is included in the broadband definition, and that is the point that I was making. The Minister is right to say that ISDN is not always on and has to be dialled up, but that bandwidth is not fast and cannot be used for the projection of graphic images. Therefore, that speed does not fit the definition of broadband and it should not be included.
Mr. Timms: It can be used, but it is slower. We are looking for consistency, to allow us to make comparisons with other countries, as the current definition allows. My hon. Friend the Member for Glasgow, Anniesland (John Robertson) was right to emphasise the importance of the roll-out of broadband across the country. My hon. Friend the Member for Rhondda (Mr. Bryant) was also right to draw the House's attention to the importance of aggregating the public sector demand—not through subsidy, but with the public sector as a customer for broadband—to increase the level of demand, including in rural areas, to allow the service to be rolled out there.
We are making rapid progress. I have established a rural broadband team in the DTI, which works closely with my right hon. Friend the Minister for Rural Affairs and Local Environmental Quality. I am confident that the rapid rate of progress that we have seen lately will continue. I agree with the hon. Member for Sheffield, Hallam (Mr. Allan) about the importance of the internet. One does sometimes hear ill-informed comments about boom and bust, suggesting that the importance of the internet has waned. He is right to remind the House that that is not the case. We see greater realism in people's approach to the internet, but it will still be extremely important in the future. I also agree about the dangers of distortion of the market through inappropriate subsidies, which the hon. Gentleman also mentioned.
My hon. Friend the Member for Milton Keynes, North-East (Brian White) speaks with great authority on these matters, and did so again this evening. He and the hon. Member for South Cambridgeshire (Mr. Lansley) spoke of some possible unhelpful approaches to the issue. It is fair enough to question
whether the amendment adds much to the Bill, but I do not agree that it is potentially damaging. I suggest that if they look at clause 3, they will see that subsection (2)(b) already refers to
- "the availability throughout the United Kingdom of a wide range of electronic communications services".
- "the desirability of encouraging investment and innovation in relevant markets".
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What the amendment will do is impose a duty on Ofcom to have regard to the desirability of encouraging broadband in exercising its functions, which will require it to take other decisions, such as the setting of general conditions with which communications providers must comply, in a way that would be more likely than not to encourage broadband. The hon. Gentlemen's misgivings about potential downsides should therefore not cause them concern. The provision will, of course, sit alongside all the existing requirements, including that in subsection (3) about the desirability of promoting competition in relevant markets.
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