Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Greengross: My Lords, I am most grateful to the noble Baroness, Lady Barker, and to the noble Earl, Lord Howe, for their contributions. I am especially grateful for the Minister's detailed, comprehensive and frank response. She dealt with most and possibly all my concerns and clarified the situation a great deal. If any of my concerns are still outstanding, I hope that I may write to the Minister. However, as I said at the outset, I do not intend to test the opinion of the House. I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.

Baroness Crawley: My Lords, I beg to move that the House do adjourn during pleasure until 8.35 p.m.

29 Apr 2003 : Column 661

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.24 until 8.35 p.m.]

Communications Bill

8.35 p.m.

House again in Committee on Clause 3.

The Earl of Northesk moved Amendment No. 13:

    Page 3, line 29, at end insert—

"( ) the promotion of broadband competition in the United Kingdom at all levels of the market"

The noble Earl said: It may be for the convenience of the Committee if I speak first to grouped Amendments Nos. 315 and 316—which are straightforward and offer alternative and measurable definitions of what broadband actually is, which is hugely important.

The noble Lord, Lord Sainsbury of Turville, is only too aware of the issues that concern me—if only from the Written Questions from me that he has had to field. In November 2001, I asked the Government what data transfer feeds they used to determine whether an Internet connection can be defined as broadband. The noble Lord replied that they had

    "offered an initial definition of broadband as always-on, unmetered Internet services with a downstream (from supplier to home or business user) speed of more than 384 kbit/s".

Fair enough. I am sure that your Lordships will have grasped why I tabled an amendment that articulates a definition of broadband that is consistent with this. Unfortunately, the waters get murkier. In November 2002, the noble Lord offered me these words of wisdom, observing that

    "the speed of broadband connections, which at 512 kbps is 10 times faster than a standard dial-up modem".—[Official Report, 4/11/02; col. WA 77.]

I received that reply with some delight. For all sorts of reasons, that is my personal preference as a definition of broadband. Not unreasonably, I returned to the issue in March and April to see whether the initial definition elaborated upon last November had solidified into something more robust and definitive. The noble Lord's reply stated:

    "The Government view broadband as a generic term describing a range of technologies operating at various data transfer speeds".—[Official Report, 11/3/03; col. WA 179.]

Does it matter? It does, for a number of reasons. As Simon Goodley, writing in the Daily Telegraph put it:

    "If you were being particularly pedantic . . . the DTI's new definition could technically include ISDN services (which have been round for a decade) and might even extend to a carrier pigeon holding a floppy disk in its beak,"

In effect, connections at less than 384 kbps—which most industry observers would define as either midband or narrowband—are included in the figures to assess the take-up of broadband, thereby seriously inflating the true position. It has been estimated that if all 128 kbps or less cable modem connections were stripped out of the data currently published by Oftel,

29 Apr 2003 : Column 662

the realistic number of "true" broadband connections in the UK would drop from 1.4 million to—from memory—something a little over 700,000. Viewed from that perspective, BT's digital subscriber line market share rises to something like 65 per cent.

I understand some of the motivation behind Oftel and the Government adopting the definitional approach that they do—not least, international benchmarking. Nevertheless, I make no apology for my conviction that it does little to establish the healthy and vibrant competitive market across the whole sector that the Government maintain that they want.

Viewed from a technical standpoint, data transfer speed, and thereby an appropriate and accurate definition of broadband, is crucial. What matters is that the real benefits of Internet communication are constrained by the speed of data transfer. Simon Goodley from the Daily Telegraph again states that,

    "what cut-down services don't do very effectively is precisely what the Government said it wanted mass broadband for. Mid-band does not put us at 'the centre of the information economy', the place where the DTI constantly reminds us we need to be. It is also not much use for services such as video streaming, which may primarily be an entertainment source but also has commercial and educational applications. Whether you think any of this is beneficial, it is what the Government wanted broadband to do".

The point was vividly brought home to me in America—I duly apologise to the Minister—by news coverage of the war in Iraq. Because I was in the United States, I do not know to what extent the UK media chose to use the technology of videophones and so on to get the news to us. However, in America, grainy and fuzzy images of the star reporters of each network were broadcast pretty much every hour of the day. No matter that the images froze all the time, or cut the reporter off mid-sentence; from the networks' point of view, it was news in the raw, delivered live, up-front and as it happened. My guess would be that had the reporters been able to file, or rather broadcast, their stories at faster data transfer speeds, the quality on TV screens would have been much closer to the standard that we have come to expect.

I should say, too, that the Prime Minister has got himself involved in the issue. Members of the Committee will no doubt recall his statement on his return from the European Council meeting in Barcelona of March last year. He stated the Government's commitment, as an endorsement of a pan-European policy objective—the Minister referred to that on the previous amendment—to deliver broadband technology that will allow,

    "internet access at 10 times the present speed",

by 2005. By any measure, and as confirmed by the noble Lord, Lord Sainsbury, in March this year, that implies,

    "products in the 500–600 kbps range".—[Official Report, 31/3/03; cols. WA 98–99.]

I am sure that Members of the Committee now see why I favour the 512 kbps measure.

It is also worth noting the recent judgment of the Advertising Standards Authority against NTL. Members of the Committee will, I am sure, be aware of the case where a complaint against NTL was upheld because it had advertised its 128 kbps Internet access service as a "high speed broadband product". In the

29 Apr 2003 : Column 663

sense that NTL had been complying with Oftel's definition, there should have been no complaint. However, as a spokeswoman for the ASA put it:

    "If you just call it 'high-speed broadband' then consumers will take this to mean a service of at least 500 kbit/sec".

The perception and confidence of consumers is crucial. I cannot help feeling that if Oftel, the ASA and indeed the Government are confused about what properly constitutes broadband products, sure as eggs are eggs, consumers will be, too.

Finally, in so far as it could be portrayed as such, any slippage in the Government's definition can be interpreted as a watering-down of their commitment to broadband. That in turn calls into question targets such as establishing the UK as the most competitive broadband market in the G7 by 2007. All that explains why it is so important that a credible, clear-cut and agreed definition of broadband should be in general circulation. Amendments Nos. 315 and 316 set out alternative means for achieving that.

I apologise for spending quite so much time on those subsidiary amendments, but Members of the Committee will have grasped that much of what I have already said informs the purpose and intention of the lead amendment. Happily, I can therefore curtail some of the remarks that I might have wished to make. None the less, I should at least put a little more flesh on its bones.

I do not think that any of us would disavow the benefits that broadband can bring. That case is already well made. We all would acknowledge that take-up in the early stages of broadband development in the UK was extremely disappointing. No matter; that much is history. However, in reaching conclusions about how to take things forward and deciding the shape and direction of broadband development over the next 10 years or so, we must be absolutely certain of exactly where we are now. For example, email traffic is at its highest level ever, with some communications service providers in the UK handling more than 16 million emails across each of their networks every day. In terms of infrastructure, it is a simple fact that outside cable franchise areas, BT has a virtual monopoly on broadband products.

Whatever its virtue, very few telecommunications companies have entered the local loop unbundling market. Indeed, the regulator, David Edmonds, despite his high hopes for mass industry take-up, described it as a "niche market" in his evidence to the Trade and Industry Select Committee on 4th February of this year. That is the reality of where we are now.

It is crucial that Ofcom, as the front-line regulator of this area, should have the means at its disposal proactively to promote and encourage the benefits that broadband can bring and, more importantly, to ensure that there is an effective competitive market across the breadth of the sector. Anything less runs a serious risk that consumers will be short-changed in the future to an even greater extent than they are being at the moment. Hence the amendment.

29 Apr 2003 : Column 664

I am only too well aware of the defence that Ministers in another place have mounted against the thrust of my intention. It is neatly encapsulated in a comment from Dr Kim Howells, who said:

    "There is no specific mention of broadband because the Bill is technologically neutral. We are committed to the roll-out of broadband across the United Kingdom, but we do not feel that it requires a specific mention in the Bill. The Bill is designed to put in place a framework that can respond flexibly to developments in technology, but it is not about one technology rather than another".—[Official Report, Commons, Standing Committee E, 10/12/02; col. 29.]

I am sorry, but that completely baffles me. It is akin to the Government arguing that in the context of, for example, transportation, they have no wish to promote the technology of air travel because to do so might give it an edge over rail and road. That is ludicrous. If I am permitted to use this phrase, the beans were comprehensively spilled in a reply that I have already quoted from the noble Lord, Lord Sainsbury. He said:

    "The Government view broadband as a generic term describing a range of technologies operating at various data transfer speeds".—[Official Report, 11/3/03; col. WA 179.]

In other words, the Government do not perceive broadband to be a specific technology that can be put ahead of any other. As the noble Lord said (as it happened, correctly) it is a "range of technologies"—DSL, cable, wireless, satellite and so on—all of which compete with each other, or attempt to do so, in the marketplace. What, therefore, is the Government's beef about putting such a technologically neutral—and, I should argue, eminently reasonable and desirable—concept and objective in the Bill?

For all sorts of reasons, and whatever the statistics may say, the UK is still not realising the full potential of its broadband opportunities. As things stand, there is a very real lack of competition in the sector, which is limiting customer choice on prices, service packages and service quality. However, by the same token, there is a real chance in this regard to produce legislation that not only addresses the problems, but looks and thinks forwards.

Should the Government choose not to agree to the amendment—I do not have many hopes for it—there is a significant risk that the chance will be lost for the foreseeable future. It may be worse—I sincerely do not believe that I am exaggerating—because it could put the regulatory clock back by perhaps as much as 20 years to a much more monopolistic era. The choice really is that stark. I beg to move.

8.45 p.m.

Lord Gordon of Strathblane: I rise briefly in broad agreement with the thrust of the noble Earl's latter two amendments, but I want to I suggest a minor change to Amendment No. 13.

Towards the end of his speech, the noble Earl said that it should be Ofcom's duty to promote the take-up of broadband and to encourage competition. If only the first point as well as the second were inserted in the Bill, I should be happy. However, there is a grave danger of us overemphasising the potential of competition in this regard. In most of Britain, the great

29 Apr 2003 : Column 665

problem is not competition but the total lack of anyone willing to provide a service. As the noble Earl will recall, the broadband stakeholder group produced last autumn a report which divided Britain into four categories: category one, plenty of competition; category two, only one provider but satisfactory service; category three, subsidies required; and category four, political solutions required—which sounds like very big subsidies.

In the light of that, to make it an obligation on Ofcom simply to go for competition could close off another option: to allow monopolies in large urban areas in exchange for a universal service provider to extend the service into rural areas which otherwise will not get it. At present, there is a bit of a fiddle whereby the Government one way or another through regional development agencies, or whatever, will be expected to foot the bill for Ofcom rather than the telecoms providers. I hope, therefore, that when the noble Earl returns to the matter on Report he will modify the amendment which otherwise would carry widespread support.

Next Section Back to Table of Contents Lords Hansard Home Page