Broadband - Business, Innovation and Skills Committee Contents

Examination of Witnesses (Question Numbers 63-79)



  Q63  Chairman: You will appreciate that we overran slightly with our last witnesses, and I hope you do not mind but I thought it was a fascinating session, particularly towards the end. We are really grateful to you for coming before us. I suppose you are representing the user community as opposed to the provider community, in broad terms. I think you have all provided us with written evidence, for which we are grateful. Now that you have yourselves in order I will ask you to introduce yourselves, starting on the left.

  Ms Payne: I am Gill Payne; I am Executive Director at the Commission for Rural Communities.

  Mr Stearn: I am Jonathan Stearn; I am a programme leader at Consumer Focus, and the key group of consumers I am concerned about are the disadvantaged and vulnerable consumers.

  Mr Hearnden: Good afternoon, I am Stephen Hearnden from Intellect, which is a trade association, so not quite consumer but close.

  Mr Holoway: Hello, I am Paul Holoway from IT Support Line, providing IT support to users and small businesses around Milton Keynes and Newport Pagnell.

  Q64  Miss Kirkbride: Do you consider that the Government aspiration of everyone having a minimum 2Mbps broadband line is good enough?

  Mr Holoway: I actually think we should be a bit more ambitious. Although I see around Milton Keynes 0.5 Mb broadband for some of the users, I feel that we should be pushing the boundaries forward than just stumping for 2Mb. A lot of people have 2Mb or more, but there are still some users on lower than 2Mb; but I think we should push the boundary towards five or 10, or even towards the legendary 100 Mb sort of thing, over a longer period of time.

  Mr Stearn: We were trying to find out where the 2Mb had come from. If you read the report it is very difficult to fathom where it has come to. It seems to be, "Okay, let us look at what is achievable and then go for that as our target."

  Q65  Miss Kirkbride: What do you consider that definition to be—that it is the slowest speed, that it is the average speed? What do you consider the definition to be?

  Mr Stearn: Again, looking at it, it seems to suggest—and Ministers have said beforehand that they are talking about the baseline, and it says in the report at one point "baseline". So given what has been said before, let us assume that what is being talked about is actually the minimum. That is an assumption because it is not absolutely clear within the report that that is what we are talking about. The report talks about the average being 3.3 at the moment, but we know from Ofcom that 4.1 is the average that currently exists. One of the things I was quite concerned about within the report is that they are talking about people, and getting past the technology it is important to see the people behind this as well. They are saying that 2.75 million people cannot get this speed. Also, elsewhere in the report, it talks about 15 million adults not having access to the Internet. That is the circle that needs to be squared.

  Ms Payne: Obviously we are looking at the rural community side of things. We are aware that there are 1.9 million people who cannot get the 2Mb, and therefore from our perspective that is a good starting point as a basis. It is not good enough, but it is a good starting point, if you can reach that number of people—which, by the way, is the size of the population of Birmingham, Glasgow and Liverpool combined, so quite a significant number of people.

  Mr Hearnden: Can I come back to the 2Mb. I agree with my colleagues that that should probably be looked as a minimum and a stepping-stone to faster services. We should be careful that 2Mb on its own, from a consumer point of view what you might call an exact science. We need to be looking at the sorts of services that consumers are likely to use. Certainly my experience of using the Internet is that having a reliable, robust service that is constant is probably more important than the absolute speed. Clearly, the absolute speed is important if you want to download a large file and you do not mind interruptions; but if you are looking at something like I-Player you want something that is reliable and constant so that you do not get the picture stuttering when you are streaming it. That is something that the industry is very mindful of in making sure that whatever we procure in terms of the 2Mb, it is a service that the users will get value from and will get a good service.

  Q66  Miss Kirkbride: What about the Government's commitment to this universal service? Should we go down the Finnish road, making it a legal right?

  Ms Payne: Making it a legal right would be quite tricky. From our perspective, it is very much that we think there are a number of issues that could be used to address this problem rather than looking at a legal remedy in that instance. We heard quite a lot about that earlier on. Looking at some of the issues around a purely commercial solution, our belief is that it is not going to deliver, and from what I heard earlier today I am no more convinced by that. There definitely needs to be some combination, we feel, of commercial, potentially from the centre, but there are also things like community broadband groups that are doing tremendous work to make things happen in local areas. I think that a legal remedy would not necessarily be the best solution right now.

  Q67  Miss Kirkbride: Given that you represent more rural communities, do you think it would be reasonable to expect them to pay more, given the difficulties of providing it?

  Ms Payne: We are already. We are saying we would like to see those costs come down for the rural communities, but we do recognise that it is a huge investment to reach them. The difficulty we have is that we are also here to represent rural business service, and they are telling us that they are disadvantaged in terms of being able to carry out their business, to employ people and reach their whole potential within those rural communities, which is a huge issue. We have then got the whole area around the Government e-agenda, such as being able to get your driving licence online, which we know that at the moment is much more difficult for rural communities, but as more and more services come along in that kind of way, rural communities will be left. It is the same where we have farmers, who are also being disadvantaged at the moment. There are considerable groups where there is an expectation of being able to use these systems, and they cannot.

  Q68  Chairman: It is very difficult to compartmentalise the questions and there is a range of areas about the digital divide that we want to ask later.

  Mr Stearn: We would like to see it as a universal service obligation. We have seen a lot of commitments from Government which do not end up being fulfilled. One of the areas I work in is, for example, fuel poverty, and there was a commitment to end fuel poverty amongst vulnerable households by 2010; well, that is not going to happen. The commitment to end it by 2016—the Government even went to court to argue that it did not have to stand by its own commitment. I think that commitment tends to be fallible when it comes to Government, so obligation is what we would like to see.

  Q69  Miss Kirkbride: Tell me what would be the difference between a commitment and an obligation—if it is not a legal right?

  Mr Stearn: It is very similar actually to what would be the statutory responsibility to achieve the target, rather than being able to argue you have not been able to achieve the target because of budgets or changes in the marketplace, for example.

  Q70  Miss Kirkbride: So it would help a bit!

  Mr Stearn: It should, really, yes.

  Mr Hearnden: I would like to see it as a universal service commitment. I think the industry is stepping up with a number of innovative solutions that will deliver by and large 2Mb. We heard from Avanti of satellite solutions earlier. There are wireless solutions and new solutions coming for extending the reach of copper. If we are flexible in terms of the definition of 2Mb, the industry will be able to deliver well nigh 80, 90 or 95% of the existing 1.9 million to give them a near 2Mb service. That is providing we are flexible in the definition of what constitutes 2Mb.

  Chairman: Even flexibility of a definition of 2Mb leaves me slightly concerned, but never mind!

  Q71  Mark Oaten: You have touched on the so-called digital divide. I guess what I am looking for from Gill and Jonathan is for you to make a slightly stronger case as to why we should give a damn. I live in a village in the middle of nowhere, and I have accepted that is a lovely surrounding—there are no buses, we do not get gas—so it is one of the prices for living in rural communities; you do not get certain things. Persuade me that I am wrong.

  Mr Stearn: Let Gill give you the rural one and I will give you an urban one. I think why you should give a damn—I used to be the Director of the End Child Poverty Campaign. We did a series of interviews with households living on the poverty line. I remember distinctly a household living in South London, a lone parent with three children. She had a pay-as-you-go phone and a pay-as-you-go meter to pay for her electricity and gas. They had no connection to the Internet. When I was talking to the older daughter, who was 16, coming home from school, she was late coming home because she had tried to stay at school to do her homework because she had no Internet access at home. The mother was paying about £240 more a year because she could not use the Internet to get cheaper fuel, for example. This is why there is a knock-on effect on consumers particularly on low incomes not having access to the Internet. It is not only adults but the impact it has on children as well and what they can achieve at school.

  Q72  Mark Oaten: That is a slightly different issue; it is not a difficulty about getting the network to them, is it?

  Mr Stearn: It is because she had no landline and the only communication she had was a pay-as-you-go mobile phone, which she only used when she had any money to pay for it. How do you get that family on to the Internet, and millions of families like them? As I said, there are 15 million adults who do not use the Internet, and only 38% of households on low incomes have access to the Internet.

  Q73  Mark Oaten: Let us separate the issue of an urban area where you are trying to get to people who have not access to it.

  Mr Stearn: Who do not have landlines.

  Q74  Mark Oaten: But there is a very separate issue of how physically you get to a rural area where it has just not been a priority.

  Ms Payne: There are two things on that. One is that you said you wanted to be convinced it is important we get it to rural areas. Again, it is the sheer numbers of people we are talking about here, and businesses—very successful businesses. I was talking with a business man yesterday who runs a global mining operation from a small village just outside Stroud. In fact, he has invested his own money in setting up the Internet access he needs to run that business. As a result he can employ more people, improve the local economy and so on. So it is making a bit difference in terms of employability. As you said earlier on, there is the whole new schools agenda, which is encouraging greater use of the Internet for getting school lessons to pupils at home, and if they cannot have that, it will be a huge disadvantage for children in rural areas. We have businesses and we have children, and we have families. Where we fall down is if we just focus this on areas about entertainment, because it devalues the arguments. It is very important, but it is also about businesses and people getting the education and skills they need to contribute properly to the economy as a whole. That is why I think it is important.

  Q75  Chairman: The thing about entertainment is that that is the big volume stuff, in terms of demand for service in megabits per second. You are talking about a much lower capacity issue. That is the point, is it not?

  Ms Payne: Only if it is a stand-alone system, and then it can go below the 2Mb. The 2Mb would be okay in a stand-alone system, but if you are running a business with more than one person or perhaps you have a business and a child at home and you are doing something else, then it will not—

  Q76  Chairman: But if you have a business you can use the satellite systems we are hearing about, which will give you very high speeds.

  Ms Payne: Having talked with the regional development agencies in the South East and South West looking at this development, they are very supportive of that, and that is a good solution.

  Q77  Mark Oaten: Is one of the solutions that the urban areas, where we have good coverage and good take-up, should be subsidising for the investment that is required into the rural and suburban areas where we have poor take-up?

  Mr Holoway: Are we talking about the 50p levy here? Is that what you are referring to?

  Chairman: We will talk about the precise mechanism later.

  Q78  Mark Oaten: As a view of how we move forward, not how it is done.

  Mr Holoway: You could even structure it so that the larger users of the Internet could pay more for the lesser users because it is slower elsewhere around the country.

  Mr Hearnden: I suppose the point I was trying to make is that what this obligation or commitment should be doing is making sure that everybody has the physical ability to link up, but also the practical ability to link up, and that brings in the whole issue of affordability. How do you make it affordable for all those households that cannot at the moment afford it? That is the key issue that is not really addressed in this report at all.

  Q79  Mark Oaten: That is a very important point because it is creating this difference between access, which is physical access or affordable access.

  Mr Stearn: Yes.

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