Examination of Witnesses (Questions 228-239)
Wednesday 21 May 2003
RT HON
ALUN MICHAEL
MP, MR STEPHEN
TIMMS MP AND
DR MICHAEL
DUGGAN
Q228 Chairman: Good morning, ministers.
Welcome to the final session of the Select Committee inquiry into
broadband access in rural areas. Stephen, I think that your department
is the lead department on the issue of broadband but obviously
we are looking at it from a rural aspect which is why you are
here this morning.
Alun Michael: Firstly, I thank
you for underlining that point and to the Committee for giving
us an opportunity to give evidence together. I think it is a good
example of joined-up government and, of course as well as Stephen,
we have Michael Duggan from the DTI who is the expert on these
issues. What I would like to begin by saying is that, as you rightly
said, the lead on broadband lies with the DTI, but broadband is
very important indeed in rural areas and I think a good example
of the way in which the Government are working and developing
is moving from rural proofing being the sort of tick-list approach
to what other government departments are doing to a very strong
engagement on issues between the different departments. New technology
gives an opportunity to do business from rural areas that a few
years ago could only be done in a city centre. That has developed
rapidly in recent years and has helped the diversification of
the rural economy in the wider sense but, on top of that now,
broadband gives both an opportunity and a challenge. The opportunity
is the speed/effectiveness of connectivity, the large documents
that can be transferred and the access to more ambitious work
in new technology, but the challenge is that we are talking about
the connectivity for smaller communities, distances, technical
problems to be overcome, greater costs in some cases and some
very difficult obstacles to be dealt with but, it is very important
for some rural business in particular, because it is not a magic
wand and it is not a universal tool, not to lose competitive edge
while waiting for broadband connectivity. There has been a lot
of progress. There was a lot of criticism a year or so ago that
perhaps BT were being slow to provide threshold information and
that fed up a section of reluctance and perhaps even delay. I
believe that there has been great progress and that that whole
issue has now been removed from the field. The roll-out of broadband
is an urban issue as well as a rural issue. I was present to open
the connection in my own constituency in Penarth, which is hardly
rural, a couple of weeks ago. I think there are some things that
are showing a real way forward. I was talking to Candy Atherton
whose constituency in Cornwall is clearly one of the areas where
an amount of progress has been made. In Cornwall, I think that
things like the ActNow project promoting broadband connectivity
clearly depends to a degree to Objective One money and the sort
of partnership of public bodies as well as private bodies that
have been stimulated by Objective One, so, in that sense, it is
accelerating the process in one rural area because that Objective
One money is available, but that is what Objective One is meant
to do, so that is far from being a criticism. I visited ActNow
at the beginning of last week and I think that Stephen also visited
the project a short time ago. I was very impressed. For instance,
seeing that an original plan to connect some six villages grew
to nine and I believe is going up to 13 as a result actually from
local engagement, from people in the local village saying, "We
want some of that" and then a dialogue saying, "To what
extent is it possible to connect villages?" I did ask for
copies of the maps that showed the way that that acceleration
had taken place which had made a particular impact on me. I have
to say that this demonstrates that new technology is not everything
because I gather that they were not able to let us have those
maps in a form that we could give to the Committee this morning
although they will be sent. I had actually envisaged, rather than
them being sent by e-mail, that they would actually have been
put in an envelope and sent. So, you do have to keep a grip on
older methods as well as newer ones. However, we do have copies
of the presentation that was given while I was down there which
underlines the fact that broadband availability now encompasses
some 68 per cent of Cornish business which will go up to 79 per
cent shortly, which demonstrates the imagination with which local
communities are being engaged through an advertising approach
and the sort of `can-do' approach is being brought to bear on
connectivity. I think that the figures are impressive: some 1,650
businesses connected to broadband through ActNow, 14% of reachable
businesses in one year and over 5,000 Cornish businesses in households
in total connected to broadband. I think that some of the information
that was presented there would be of interest to the Committee.
However, I think it is worth making the point that that is an
illustration of acceleration. I was struck talking to one of our
colleagues, Peter Bradley, last night that, in the Wrekin, he
has, with the local village, been running a pilot to encourage
take-up and to see if the threshold could be reached and has had
a very positive response.
Q229 Chairman: Those are the general
issues but I think that what the Committee wants to be clear on
is what the objective of Government policy is in this area. Are
the Government saying that rural areas should have as much access
to broadband as urban areas? Is the policy of the Government to
bring about a certain percentage of access to broadband? What
is that percentage and to what extent are the Government prepared
to be interventionist in actually ensuring that that policy objective
is met because the impression that the Committee has had so far
is that the expansion of broadband in the UK has been largely
market led and obviously, in rural areas, we are beginning to
come up against problems with constraints where the market is
not necessarily very quickly going to deliver access. So, I would
be grateful if you would just concentrate on those issues.
Alun Michael: If I may say so,
I think that is what I have been concentrating on. It is demonstrating
the extent to which, firstly, there is Government commitment and,
secondly, there is a great deal that local communities can do
with the changes that have taken place over the last year, the
change of attitude to which I referred and the sort of exemplars
which I think very much show the way in which Government and local
communities need to be working in partnership in rural areas.
It is not easy to move rapidly everywhere. There are areas that
can only be reached by radio or satellite, but I am particularly
pleased—and I think that this is the way forward—about
the partnership now created. There was no expertise in my own
department a year ago. We now have a secondee, Helen Thompson
who is here this morning, seconded to the DTI team in order that
rural issues are understood by that team. Stephen is chairing
the ministerial group of which I am a member. We have a secondee
also to one of the RDAs. I attend the meetings of RDA chairs which
take place regularly under DTI chairmanship and they have been
engaging with the need to have connectivity in rural areas, which
of course is very much a part of their role in the regions and
I think that the opportunity that has been created by the Government's
decision to invest in school and health connectivity gives a particular
opportunity in rural areas which I think Stephen will want to
say something about but, across Government, that reflects an enormous
amount of investment and commitment.
Q230 Mr Curry: Can I just be clear.
We have had a number of witnesses and in fact almost all of them
have suggested up to now that however far we push broadband, there
is always going to be some sort of tier of people, as it were,
too far up the path/too far up the track to be able to access
it. Could you confirm for me or could you simply state for me
that it is the Government's aim that every community in the UK,
irrespective of location, should be able to access broadband at
affordable rates within a reasonable time.
Alun Michael: That is certainly
our aim and I think that some of the technical obstacles are ones
that everybody is working on overcoming. I referred, for instance,
to that connection of villages in Cornwall. Just outside the area
of the villages being connected, you would have seen, if we had
had the map here—and, please, let me make the point—two
places where there is a radio connection experiment looking at
the practicalities of overcoming the difficulties. There are RDAs
that are taking an initiative in relation to satellite connection
as well. So, yes, the answer is that there are clearly places—and
Stephen is more acquainted with the technical pros and cons than
I am—where connectivity through cable or through exchange
enablement is not possible but where other technological answers
are possible and that is what is being experimented with.
Q231 Mr Curry: I was not suggesting
that there should be a standard method. I was merely wanting the
aspirational statement, if you like, a vision thing, that it was
the Government's aim that all communities should have access,
and the next inevitable question is then the definition of what
a community is. Is a community defined as a group of people within
a certain proximity of a certain size? Will there be people at
the end of all this process who it is not reasonable to expect
that they will be able to access broadband?
Alun Michael: If you hear from
Stephen, the two strands of the discussion will come together.
Very clearly, there are some communities where the number of subscribers
would make the possibility of connectivity at the exchange remote
if not impossible. There is also the limitation on distance from
exchange of I think it is 6.5 kilometres—it is slightly
higher for ADSL—which is a greater area that is brought
in that was the case even 12 months ago.
Q232 Mr Curry: Minister, I asked
you a very general question and the response immediately goes
into a whole series of micro-schemes and I am finding it quite
difficult to pull all this together and get a sort of overall—
Alun Michael: If you had listened
to the introductory comments, perhaps you would be somewhere nearer,
David.
Q233 Mr Curry: Let me try again.
Last November, the Prime Minister made a speech in which he said,
as I recall, that, by 2004, every school and every GP surgery
would have broadband and that, on the back of this, there would
be enfranchisement for people in the community. The Department
of Health and the Department for Education and Skills is spending
a small fortune bringing hospitals and schools online. When they
are told that they have to allow those lines to be piggybackable,
who pays for any extra capacity that might be necessary to enable
that to happen? What happens to the deadlines which have been
established for those public-sector bodies and, since the Prime
Minister's statement, how many contracts have been changed to
permit piggybacking?
Mr Timms: I wonder whether I could
comment on that and I would like to set out some of the background
before I address those points specifically. On your question about
availability, looking through the position on broadband around
the world, I think that 90% seems to be at the moment the highest
percentage household availability of broadband anywhere. Even
in Korea which I think is the country that has done the most,
it is 90%.
Q234 Mr Curry: So you can have 100%
community availability but that may be less in terms of households.
Mr Timms: It is 90% household.
We want to be among the leaders. Indeed, we have set the target
of being the most competitive and extensive broadband network
in the world, so we need to be up there in order to achieve that
target. At the moment certainly, there are people who cannot get
broadband much though we would like them to share the aspiration
that you have set out. I think that we can point to good progress
over the last year. We expect to hit the two million broadband
connection milestone this week having been at 600,000 a year ago.
It remains the case, however, that there are over one quarter
of the households in the UK who are not within reach of the affordable
broadband service that David Curry has been referring to, concentrated
particularly in rural areas, but we are now working with Alun
focusing a good deal of attention on addressing the barriers that
they face. I think that the main barrier is concern in the rural
areas that the initial investment required to provide broadband
by any technology other than satellite will get a slower return
in rural areas where there are fewer people within a given distance
of the exchange than in areas of high population density and also
where the cost of backhaul is likely to be greater. So, those
are the barriers that need to be addressed. As David Curry said,
the Prime Minister said in a speech in November that the Government
will be spending £1 billion on broadband to improve public
services over the next three years with the health service and
education in particular with, for example, broadband in every
school by 2006, every doctor's surgery being wired up and so on
and it is my job to make sure that we make the most of the potential
for that investment to open up broadband access to customers outside
the public sector as well as obtaining best value for the taxpayer.
We concluded that the way to achieve that was to aggregate the
key aspects of public sector demand to deliver the department's
needs at the lowest cost but also to extend broadband to a wide
range of dispersed locations. So, subject to some further value
for money appraisal work that we are about to undertake, the Department
for Education and Skills and the National Health Service will
become the key anchor customers for this broadband aggregation.
They account, between them, for the great bulk of the public sector
demand and it is our hope that other public sector users will
be encouraged to come in behind them. We are in the process now
of designing exactly how this will be achieved and we expect to
reach a final view next month. We are working, again picking up
one of David Curry's points, to very, very tight deadlines here
because that is the nature of the targets which the public services
are committed to delivering. The health service has very demanding
targets and the fact that the health service is part of this aggregation
exercise must not delay or put at risk the achievement of those
targets. We are working very closely with the regional development
agencies, as Alun has mentioned—I met the chief executives
of the agencies yesterday—and also we are working with the
devolved administrations who have a crucial role to play whatever
model for aggregation we end up using. The broadband aggregation
project team is based in the DTI; it reports to the ministerial
steering group which I chair and of which Alun is a member and
that group met this week and reaffirmed its commitment to the
aggregation approach. So, I think that project will be critical
to the wider roll-out of broadband in rural areas alongside the
competition between the different broadband providers and the
growing demand from people all over the country for access to
broadband services. David was asking questions about the contracts
that have been let so far. The first health service contracts—and
these really are on the critical path for this—will, as
I understand it, be let in the early part of the next calendar
year. So, what we are wanting to ensure is that, well before then,
we have in place a procedure that will aggregate together the
demand in particular from health and from education in order to
obtain the benefits from aggregation for increasing broadband
availability.
Q235 Mr Curry: Minister, this is
my final point though I suspect that we will come back to this
later. When you were talking about piggybacking, I listened very
carefully and you said that other public sector bodies will come
in behind. What about non public sector bodies? If, in one of
the larger villages in my constituency, the intent is to put broadband
into the primary school, but what about non public sector users
coming in on that and how are the contracts then framed to create
that capacity and to allocate cost because public sector costs
are obviously something that we need to keep under control? How
does that work? Ho do those contracts work?
Mr Timms: The way we see it working
is that the public sector will put together its requirements,
service providers will then invest in infrastructure in order
to meet those requirements and that infrastructure will then be
available for other users, private sector users as well. There
are some quite interesting examples around already of places—there
is a school in Cheshire which has broadband and where there is
a wireless aerial which has now been set up in order to provide
a wireless broadband service to the community around. That is
the kind of development that I expect we will see much more widely
using the infrastructure that has been put in place for the public
sector but opening it up to other users, individual householders
and businesses in the area too.
Q236 Mr Curry: On the subject of
infrastructure, it just so happens that yesterday a letter came
to me from Scottish and Southern Energy and they argue that they
are looking at ways of bringing broadband services and infrastructure
to rural areas which will only be commercially viable if they
can utilise the advantages presented by existing electricity infrastructure
and they quote two examples: the installation of fibreoptic cables
in or on the overhead electricity lines and powerline communications
along the existing copper electricity cables. What they are saying
in a nutshell is that the costs of acquiring the rights for the
few what they call "ransom strip holders" is such that
it is discouraging development of this technology but that a minor
change in the Communications Bill which would affect the code
powers in Schedule 2 of the Telecommunications Act would actually
bring within the range of accessibility this existing infrastructure
and therefore open up a new avenue for delivery. I am very happy
to give you a copy of this and you may wish to reflect upon it
because we will probably come back to it, but that came out of
the blue and, since we are in the business of 1,000 flowers blossoming
sort of thing in all this, there are presumably a couple of thistles.
Mr Timms: I very much agree. I
think that what Scottish and Southern Energy is doing is very
interesting. They have had a successful pilot, I think in Crieff,
and they are now moving to a commercial pilot in a couple of other
locations. I am hopeful that powerline will prove to be an important
additional platform for broadband alongside ADSL and cable and
wireless and satellite that are already there. There were some
technical problems with that technology when it was last tried
three or four years ago. Those problems appear now to have been
ironed out and it now looks much more promising. Whether there
is change to the law needed to facilitate this, I am not convinced.
I will certainly have a look at the case they have made and they
have sent me a copy of their letter which I am grateful for as
well, but I certainly think that we do need to consider how we
can facilitate that development and that technology platform alongside
the others.
Q237 Chairman: On that specific point,
would it be possible for your department to let the Committee
have some further thoughts on that before we actually finalise
our report because that would be helpful?
Mr Timms: We would be very happy
to do that.
Q238 Ms Atherton: Just on ActNow
in Cornwall, the Committee might have had the impression that
you were suggesting, Alan, that 79% of Cornish businesses were
connected up. Actually, it is 14% and I would have to say that
the vast majority of these—and it is a very good scheme—are
in towns. They are not in the really rural areas of Cornwall so
much. I think that is the issue that we are trying to address
within this Committee. They are in towns and communities: Camborne,
Poole and Redruth areas has a community of something like 50,000
people. That is hardly down the end of a track and that is the
challenge that I think this Committee is concerned about. In fact,
it is a 14% take-up of businesses so far. I would particularly
like to talk about the broadband pilot project.
Alun Michael: That is businesses
actually connected as distinct from accessible.
Q239 Ms Atherton: Yes, I accept that.
Alun Michael: I confirm that.
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