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Lord McIntosh of Haringey: My Lords, I also have a very long speech. I shall have to give the parts of it that refer to the amendments that have been spoken to. Fortunately, a number of amendments in the group have not been spoken to at all. I hope that the House will be glad to hear that I do not think it necessary for me to respond to them. I am glad that I was able to write to the noble Baroness, Lady Buscombe, and the noble Lord, Lord Avebury, and to place my letter in the Printed Paper Office and the Libraries of both Houses.
I realise that the noble Lord, Lord Avebury, has more general concerns such as the belief of some people in the industry, although by no means everyone, that RSA could compromise switchover or stifle emerging broadband. Those are general complaints about recognised spectrum access, and I do not think that I am in a position to do anything other than respond to the amendments in the Marshalled List. If he wants to discuss the wider issues, of course I am always happy to do so.
The principle of RSA has already been extensively discussed. The powers in the Bill are broad enabling powers. It is up to Ofcom to decide in which frequency band RSA should apply, the timing of its introduction and the level of charges. Decisions on that have not been made yet.
Before I go into the individual amendments, I should tell the noble Baroness, Lady Buscombe, that I listened closely to what she said and have some sympathy with her arguments on Amendments Nos. 75 and 76. I am happy to look again at the scope of Ofcom's powers on the restrictions and conditions to which the grant of RSA can be made subject. I want to see whether we can table an amendment at Third Reading to narrow those restrictions and conditions without compromising the effective management of the radio spectrum.
Auctions are referred to in Amendments Nos. 73B, 73C and 85 and in the linked Amendment No. 226A, which would prevent Ofcom from charging fees for RSA in excess of its costs. The underlying thought seems to be that it is wrong to charge for RSA on the same basis as licences. That is what the Trade and Industry Committee of the House of Commons said, and we have already published our response to that which goes into the issue in some detail.
Businesses such as Sky that currently benefit from satellite's free access to spectrum in frequency bands shared with terrestrial services are concerned about the prospect of paying for their use of that valuable resource. Understandably, they would rather pay nothing at all or limit their payment to cover Ofcom's costs. We have repeatedly said that we have included strong and effective safeguards in the Bill to meet those concerns about the level of fees. The amendments, which would limit the fees to costs recovery, go too far. They would deprive Ofcom of an effective spectrum management tool and perpetuate the present inequity in some frequency bands. But terrestrial users pay a fair price for spectrum, whereas satellite operators do not. That does not seem to me to be a defensible stance.
I am trying not to make points that are unnecessary in the light of the debate, but in dealing with the issue of auctions and pricing I have to say that I valued the principled position taken by the Conservative Party in debates on the Wireless Telegraphy Act 1998. It said that the spectrum pricing principles should be extended to satellite. That is what we are doing in the Bill. The amendments would depart from that principle, and I really do not understand why the Opposition wish to depart from it now. There is no basis for distinguishing between RSA and licences in respect of administrative incentive pricing or auctions.
By "administrative incentive pricing" I mean setting fees in accordance with spectrum management considerations, having regard to factors such as congestion which are specified in Clause 151(2) rather than by reference to the cost of managing the spectrum. These fees are levied to promote a more efficient use of the radio spectrum, not to maximise revenue. It is important to be clear on that point. Both the RSA and licences give the holder access to a specified quantum of spectrum of a defined quality, and the charging principles are exactly the same.
The noble Baroness, Lady Buscombe, said in Committee that RSA should not be auctioned because it is "merely protection". Indeed, the Trade and Industry Select Committee went further and called it a protection racket. This is of the essence. Permission to transmit is of little value unless there is the facility to receive free from interference. That facility underpins the value of spectrum of a communications medium. What the noble Baroness describes as "merely protection" is as valuable as a licence, and should, in fairness, be charged for on the same basis. Indeed, the Trade and Industry Committee endorsed those principles for spectrum licences.
In the end, decisions on auctions for RSA will be a matter for Ofcom. I cannot anticipate how Ofcom will use the auctions, but it will be required to act in accordance with the spectrum duty in Clause 151, taking account in particular of spectrum management considerations, and it will consult, as required by Clause 396. I appreciate the concern expressed by satellite operators about the level of fees. I am happy to repeat the assurance that RSA charges will be no higher than necessary for spectrum management purposes. Clause 151 gives that assurance statutory force.
Amendment No. 74 would require Ofcom to consult all interested parties before making regulations to apply RSA and to consider whether they are appropriate and proportionate. I have no problem with the principle behind the amendment and we have given repeated assurances that there will be full and detailed consultation before decisions are reached. But the amendment is not necessary, because Ofcom's general duty is to regulate in a way that is proportionate and appropriate. That will apply to RSA as to other aspects of Ofcom's functions. We do not need to repeat that requirement specifically for RSA.
There are provisions in the Bill requiring Ofcom to consult before introducing RSA. Clause 76(6) requires Ofcom to consult about major regulatory changes or changes with a significant impact. Clause 396 requires Ofcom to consult and take representations into account before making RSA regulations. There is nothing to prevent Ofcom from consulting more extensively if it wants to do so. The framework for consultation applies to, and is sufficient for, other Ofcom regulations. There is no need to have a special regime for RSA.
I have referred to our sympathy for Amendments Nos. 75 and 76. It is not possible to anticipate exactly what restrictions or conditions Ofcom may need to impose. It is prudent to give Ofcom similar flexibility as for licences. RSA could be for a wide range of services, not just satellite. Restrictions and conditions will have to be tailored to the circumstances, so we need to give Ofcom a margin of flexibility, for example—and this comes back to the point made by the noble Lord, Lord Avebury—to promote broadband by restricting the services that benefit from RSA, or to impose conditions on sharing spectrum in the interests of spectrum efficiency.
In exercising this power, Ofcom will be bound by Clause 3 to have regard to the principle of good regulation, and by Clause 6 not to impose unnecessary burdens. However, we will look again at the scope of the powers to see if we can narrow them. I hope that that will give some reassurance to the noble Baroness, Lady Buscombe.
The noble Baroness referred to the issue of revocation and modification, which is in Amendments Nos. 74 to 77. The amendments would limit the circumstances in which Ofcom may revoke or modify RSA to cases in which the holder has consented or there has been a contravention or restriction of the condition of the grant. This is too inflexible; Ofcom may need to revoke or modify RSA for a number of reasons. It may be in the best interests of consumers to free up spectrum that is subject to RSA for a new service to be established.
The amendment would not allow Ofcom to use the accelerated procedure in subsection (6) in urgent cases including those involving a serious threat to public safety, public health or national security. We must make provision for such a threat, should it arise, and for Ofcom to act swiftly. For example, in the terms of RSA, reserving frequencies for holders' exclusive use could prevent spectrum being made available for some application needed urgently to counter a serious threat. We need to have the power to act quickly.
Amendments Nos. 86 to 91 would remove references to RSA from Clause 161. That requires Ofcom, in imposing limitations on the use of particular frequencies, to make an order. It is difficult to predict exactly how the order could be used, but one can see in general terms why it is needed.
The noble Baroness, Lady Buscombe, acknowledged that radio spectrum is a scarce resource. In some frequency bands there is a need to protect one service from interference that can constrain the deployment of other services, for example, in bands shared by satellite links and terrestrial point-to-point fixed links. If we grant RSA and a shared band, that effectively reduces the spectrum available for other applications. In these circumstances, it is necessary to limit the grant of RSA to prevent other services from being unduly constrained to the detriment of the economy and of consumers.
Amendments Nos. 94 to 99 are about trading. They would prevent Ofcom from restricting the circumstances or manner of trading and imposing conditions. Amendment No. 99 would remove the sanction in subsection (4) that underpins Ofcom's regulation of trading of RSA. Transfers of RSA will give rise to similar considerations and similar regulations as transfers of licences. Ofcom will therefore need similar powers.
We cannot anticipate what use they will make of the powers in Clause 165, but they will be required by Clauses 3, 6 and 151 to be proportionate, appropriate and in accordance with the general principles of administrative law to act reasonably. They will be required to consult before making orders, and there will be rights of appeal against their orders.
I am sorry to have gone on so long, but this is a complicated group of amendments. I hope that I have given answers that address the problems raised by these amendments.
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