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Baroness O'Cathain: My Lords, perhaps I may ask a question for clarification. I am really arguing against myself now, having listened carefully to the Minister on the previous amendment about "may" and "will". The amendment states,

I take it that that means that the Government are allowing flexibility. I am sure that the Minister is as aware as I am that turnover does not necessarily indicate a person's ability to pay.

Lord Simon of Highbury: My Lords, I quite agree. That is why we have used the word "may".

On Question, amendment agreed to.

Clause 51, as amended, agreed to.

Clause 52 [Regulators]:

The Deputy Speaker (Lord Skelmersdale): My Lords, before calling Amendment No. 164D, I should say that if it is agreed to, I cannot call Amendment No. 164E.

Lord Simon of Highbury moved Amendment No. 164D:

Page 26, line 6, leave out subsection (1).

The noble Lord said: My Lords, with the leave of the House, I should like to speak also to Amendments Nos. 164F, 168A, 171E, 171F, 174B, 174D, 174F, 174H and 174J.

Amendments Nos. 174D and 164F are drafting changes. They provide a reference in Clause 52 to the separate parts of Schedule 10 on concurrency. Amendments Nos. 171E, 171F, 174B, 174D, 174F,

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174H and 174J relate to disclosure provisions in utility statutes and are for clarification. Because the concurrent powers of utility regulators are provided within their utility statutes, it might be argued that where they obtain information in exercising functions under this Bill it is nevertheless the disclosure provisions of the utility statutes that apply rather than Clauses 53 and 54 of the Bill. These amendments make it clear that it is the disclosure provisions of the Bill that are to apply, not those in the utility statutes. We shall be discussing disclosure more fully a little later. Meanwhile, I hope that noble Lords will be content to accept these amendments for clarification.

I now turn to Amendment No. 168A. At Committee stage I said, in response to an amendment from the noble Baroness, Lady Dean, to the scope of the Director General of Telecommunications' concurrent powers, that while I was not convinced that any change was needed, I would reflect further. I have now done so and I have come to the view that, in response to the concerns raised, a small technical change would be a necessary and useful addition to the scope. This change represents both a clarification and a widening of the scope of concurrent powers, but it is within the current framework of Oftel's existing powers and concurrency.

The proposed amendment replaces the phrase,

    "which relate to commercial activities connected with telecommunications"


    "which relate to the production, supply or acquisition of telecommunication apparatus or the supply or securing of telecommunication services".

The term,

    "commercial activities connected with telecommunications"

is a defined term in the Telecommunications Act 1984 and the proposed amendment essentially takes the elements of the defined term and adds the words "or securing" before "telecommunication services".

This is a modest amendment that would extend concurrent powers under the Bill but not beyond those conferred by the Telecommunications Act 1984 and would reflect the 1984 Act wording used in respect of concurrent powers under the Competition Act 1980. I beg to move.

Lord Fraser of Carmyllie: My Lords, we have no difficulty as regards the large number of amendments proposed by the Government. As the noble Lord will have anticipated, we have a difficulty with Amendment No. 168A. The noble Lord was full enough in his explanation to admit that the change of definition would have the effect of extending concurrency within the Bill itself. It would be to run against the grain of all that we have been arguing for, not only at this stage of the Bill but earlier, if we were to say that we approved of this amendment. I would prefer that the noble Lord did not move Amendment No. 168A when we reach it. I am not entirely convinced from the argument that he advanced that it is necessary even to meet his own needs. It would certainly be objectionable to us.

I appreciate that the noble Lord intends to move it only as a clarifying amendment, but to some extent it is somewhat inflammatory as we begin to get into the

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debate about concurrency. Any proposal, far from being any attempt to meet us on the points of concern that we have about concurrency and in fact extending what is going on, makes us extremely uncomfortable.

Lord Simon of Highbury: My Lords, I quite understand the position that the noble and learned Lord puts to me. I shall reflect very strongly on the issues. It is an amendment for clarification relating to sets of competences together. If it is thought that we have not achieved the right clarification, I am certainly willing to take the matter away and reflect again.

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 164F:

Page 26, line 9, at end insert:
("(2A) Parts II and III of Schedule 10 provide for functions of the Director under this Part to be exercised concurrently by regulators.
(2B) Parts IV and V of Schedule 10 make minor and consequential amendments in connection with the regulators' competition functions.").

My Lords, we have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 165 not moved.]

Schedule 10 [Regulators]:

Lord St. John of Bletso moved Amendment No. 166:

Page 70, leave out lines 24 and 25.

The noble Lord said: My Lords, in moving this amendment I shall speak to Amendment No. 167. I understand that the noble and learned Lord, Lord Fraser, and the noble Lord, Lord Kingsland, will be speaking to Amendments Nos. 168, 171H, 171J and 171K. I also understand that they may be speaking to Amendments Nos. 172, 173, 174 and 174A.

While I recognise that the Government are committed to introducing concurrent powers to the regulators in this Bill, these amendments would ensure that the functions under the Bill, when exercised by the Director General of Telecommunications, are exercised on the same basis as they would be exercised by the Director General of Fair Trading.

These amendments are specific to the information technology field. Amendments Nos. 166 and 167 would reverse changes which Schedule 10 to the Bill proposes should be made to the Telecommunications Act 1984 to merge the job of the DGT as a regulator with his new job under the Bill. The amendments, therefore, would concern the important issue, which we debated at Second Reading as well as in Committee, of the relationship between the new jurisdiction of regulators under the Bill and their continuing jurisdiction under the various statutes that created their offices and set out their statutory remits.

As I see it, the current situation is that Section 3 of the Telecommunications Act 1984 sets out the DGT's regulatory--if I can call it--"job description". The Act sets out how the DGT can achieve those objectives. Essentially, he has the powers to enforce licences granted under the 1984 Act. The DGT is vested with the same competition functions as the DGFT. Under the

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1984 Act there is a distinct separation of powers. The regulatory job was kept separate from the competition law job. Therefore, when the DGT acts as a competition authority he acts as if he had no other job in the same way as the DGFT would.

In essence my amendments would preserve the existing legal arrangements under the 1984 Act whereby the two jobs are kept separate and would ensure that the powers to be vested in the DGT under this Bill could not be used to achieve his regulatory objectives or job description. This would in no way prejudice the efficacy of his concurrent functions under the Bill but would ensure consistency when the DGT exercises his powers under the Bill (including enforcing the prohibitions) since he would do so on the same basis as the courts, the DGFT and the tribunal within the competition commission would do. This argument was eloquently rehearsed by the noble Lord, Lord Kingsland, in speaking to the group of amendments with Amendment No. 159A.

Following my recent meeting with the Minister, I believe that he shares my concerns that the Bill should provide a simple, workable and effective arrangement for the new competition laws. My amendments would further these objectives. They would ensure that concurrent jurisdiction exercised by the DGT with the DGFT under the Bill would be exercised on a consistent basis. I do not believe that Section 3(3) of the 1984 Act should be narrowed as paragraph 2(3) of Schedule 10 proposes. Amendment No. 166 would achieve exactly that.

I recognise the Minister's concern that when a regulator discharges his functions under the Bill he must treat those functions as paramount. In other words, when he acts as a competition authority, pursuing the objectives of the Bill, any conflict with his objectives as a regulator should be resolved in favour of the Bill. I am not convinced that the current drafting of paragraph 2(4) of Schedule 10 achieves that objective.

It seems to me that the purpose of regulation and the purpose of competition law are different. Competition law protects the competitive process. Regulation is concerned with many other and varied objectives. There should not be confusion between the creation of competition and the protection of competition.

The noble and learned Lord, Lord Fraser, referred to a letter which was sent to various noble Lords by Oftel. In that letter, dated 17th February, the director general stated of Amendments Nos. 166 and 167:

    "These amendments identify a distinction to be drawn between a regulator's sectoral statutory duties and those under the Bill. They are correct to do so. Under the existing framework I am unable to have regard to my Telecommunications Act duties when acting under general competition law. I believe that I would, as a matter of practice, be bound to maintain that approach to cases under the Bill. Therefore, although the Bill, as drafted, would not prevent me from doing so, there is a case for putting the matter beyond doubt".

If the DGT exercises powers under the Bill and leaves his sectoral objectives to one side, it seems to me that the functions that he is exercising--that is, those under the Bill--will then be "paramount".

If the amendments are not accepted, Schedule 10 would enable the DGT to have regard to matters even if they would not otherwise be relevant when exercising

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Bill powers, and would appear to allow the DGT to base his decisions upon matters which the courts, the DGFT and the tribunal would not be able to base their decisions upon. There would, therefore, seem to be an incompatibility between the provisions of Schedule 10 and the governing principles set out in Clause 58. Rather than Clause 58 prevailing, which I believe is the Minister's intention, it seems that Schedule 10 would prevail. I beg to move.

7.30 p.m.

The Deputy Speaker: My Lords, as Amendment No. 167 is grouped with Amendment No. 166, I should advise the House that if Amendment No. 167 is agreed to, I shall not be able to call Amendment No. 168.

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