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Lord Inglewood: I am grateful to the Minister for his full response to the points inherent in the amendment. If I have in any way misled the Committee or the Minister I apologise. I made my remarks upon the basis of information that I had, which I understood to be correct. Having heard all the Minister has said about the point, I shall agree with the advice that he gave me and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Haskel moved Amendments Nos. 8 and 9:

Page 2, line 39, leave out ("subsection (1)") and insert ("this section").
Page 2, line 40, at end insert—
(""telecommunication service" means a service falling within paragraph (a) of the definition of such a service in section 4(3) of the Telecommunications Act 1984").

On Question, amendments agreed to.

On Question, Whether Clause 2, as amended, shall stand part of the Bill?

Lord Renton: I wish to make a short, important drafting point. It occurred to me only while listening to the interesting discussions in Committee. The noble Lord, Lord Clinton-Davis, rightly described Clause 2 as
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giving rise to complexity. It certainly does when read in connection with Clause 1, where we find that there is power to make regulations. In the first line of Clause 2, we find that:

However, it is important to note that Clause 1(3) refers to regulations which must be made and which affect the application of Clause 2.

I turn to my main point of difficulty. Clause 2(3), as amended by Amendment No. 8, now reads:

It may be that I am speaking from ignorance, but I do not believe that I am. I do not recollect a phrase such as:

Whoever must determine the outcome may from time to time vary in opinion or from the opinion of other people who have to determine. The use of the expression "or determine in accordance with regulations" when used as an alternative to "prescribe by regulations" could give rise to uncertainty of legal effect. I do not ask for an answer now. I ask Members on the Government Front Bench carefully to consider between now and the Report stage the effect of lines 39 and 40 as now drafted.

I wish to make a further suggestion, which I hope is helpful. Clearly, the regulations mentioned in line 39 must be regulations under Clause 1(3) and not a fresh set of regulations made under Clause 2. Therefore, in order to remove the uncertainty, I suggest that after the word "regulations" in line 39 the words "made under Clause 1(3)" should be inserted. Those are my two specific suggestions. Of course, there may be better ways of dealing with the matter, but as it stands it may result in confusion.

Lord Clinton-Davis: I always pay close attention to the arguments of the noble Lord, who I know is assiduous in such matters. I frequently agreed with him when I was on that side of the House. I do not know whether on those occasions he wanted me to do so, but I frequently did.

I am not sure that the noble Lord has a good point, but of course I shall reflect on the matter. The regulations set out in Clause 1 specifically refer to "regulations under this section". Clause 2(3) states:

That is an all encompassing situation. However, it is right that we should clear up any ambiguity that might exist. I am not convinced that the noble Lord is right, but, as he anticipated, it would be wrong of me to make up my mind on the spur of the moment. Consequently, I shall probably write to him before the Report stage, otherwise he has his remedy at that stage.

Clause 2, as amended, agreed to.
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Clause 3 [Bidding for licences]:

Lord Derwent moved Amendment No. 10:

Page 4, line 8, at end insert ("except that regulations made under this section shall not apply in relation to any application for the renewal of any wireless telegraphy licence which is in force immediately before the passing of this Act").

The noble Lord said: The amendment is of great importance to the four mobile telephone operators. On Second Reading, I warmly welcomed the Government's reassurance that there was no intention to apply auctions to the four existing mobile operators in respect of the radio spectrum currently allocated to them. However, the industry would feel more secure if it could see that reassurance repeated on the face of the Bill. It would clearly state that auctions would not be applied to the current spectrum allocations.

The Minister will realise that that is fundamental to all the current operations and operators. If the Bill were to give such a reassurance all the operators would be allowed and encouraged to continue their extensive additional network investment. As the Minister generously acknowledged, that investment helps to maintain the UK's position in the forefront of world mobile telecommunications, providing employment and increased competitiveness. I therefore hope that in this instance the Minister will feel able to accept the amendment, which does no more than enshrine in the Bill what he has already assured us is the Government's policy. I beg to move.

Lord Clinton-Davis: Once again, I find it possible to express sympathy with what underlies the noble Lord's argument, but I am afraid that I must withhold my support. I hope that my reasons for that will be satisfactory to him.

I have given undertakings, which I am happy to repeat, that we do not intend to require existing licensees to enter an auction for the right to continue to provide current services within their existing spectrum allocation. The noble Lord, Lord Inglewood, was also concerned about that point.

As the noble Lord sought to underline, we need stability and certainty, especially when one is thinking of large investments in networks and systems, which is frequently the case. A technical and important issue arises from the reference in the amendment to the "renewal" of licences. The mobile telecommunications operators' wireless telegraphy licences will continue in force, so long as the appropriate fee is paid annually, until revoked or surrendered. The amendment could not apply to such licences because, technically, they are not renewed but continue in force from year to year.

I do not wish to quibble about the drafting of the amendment. That is not what we are about in a discussion of this kind. However, I mention the matter as an alternative way of meeting the noble Lord's concern that existing licensees might find themselves having to bid for the spectrum which they occupy in order to continue to provide their current service. To hold an auction, it will be necessary first to revoke the existing licence. Security against that may be conferred under Clause 4, as indeed it is under Section 3A of the Wireless Telegraphy Act which Clause 4 replaces.
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The mobile telecommunications operators have been given certain assurances about the circumstances in which revocation or variation will be enforced without the consent of the licensees. I am happy to provide an undertaking that the operators will be given exactly the same security under Clause 4 which they currently enjoy. That will protect them effectively against having to undergo an auction in the circumstances which the noble Lord's amendment seeks to identify.

I hope that that will be sufficient to satisfy the noble Lord. I hope that the further undertaking which I have given will also buttress the position that he has sought to address. In those circumstances, I ask the noble Lord to withdraw the amendment.

4 p.m.

Lord Renton: Before the noble Lord sits down, and before my noble friend Lord Derwent withdraws the amendment, I must say that having listened to the Minister carefully I was hoping that he would give an assurance that the application of Clause 3 would not be retrospective in any way. The amendment would prevent it from being retrospective and that is its virtue. Will the Minister give an assurance that there will be no question of retrospection of effect?

Lord Clinton-Davis: The noble Lord has more experience than I of this Chamber. However, we are in Committee and it is not necessary for the noble Lord to say, "Before the noble Lord sits down" while we are still on the amendment. There is no intention here to be retrospective. I thought that I had said that, although perhaps not in quite the precise terms which the noble Lord wanted. But I think I am able to satisfy him now.

Lord Inglewood: I am grateful to the Minister for his response. I am grateful too to my noble friend for raising the matter. It seems to us that the issue we are discussing is of very considerable, practical importance. I am grateful to the Minister for what he said about that and for the undertaking that he gave to the Committee in relation to it.

Perhaps I may raise one consequential point. Were the position to appear unsatisfactory as regards possible security of tenure, if I can express it that way, of those holding licences, it seems to me that one would then logically have to consider what, if any, question of compensation there may be for what one might describe as the loss of legitimate expectations. I am sure that everyone would agree that the right way to proceed, if we can, is by not entering a world where one needs to consider that matter. That can be achieved by ensuring that everyone is clear, satisfied and happy with the legal and, if I may so describe it in a non-legal sense, the equitable position we are in.

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