Lord Foster of Bath
To ask Her Majesty’s Government what plans they have to ensure the rollout of superfast fibre broadband to homes across the country.
Lord Foster of Bath (LD)
My Lords, I am grateful for the opportunity for this short debate and to other noble Lords who will participate. I hope to argue that we are in danger of overselling how well we are doing on broadband rollout and that as well as promoting more use of fibre we need to do more to stimulate demand.
I begin by declaring that I live in the wilds of rural Suffolk, in a home as yet untouched by superfast broadband. I am not alone in having broadband difficulties —eight days ago, the DCMS’s connectivity Minister, Matt Hancock, addressing the Broadband World Forum, said, “This Friday I appeared on our local news programme with positive stats about broadband in Suffolk, but at the time I was on my hands and knees under my desk trying to fix my wifi, and it stayed off all weekend”. I know the feeling.
Yet as the LGA has said, broadband is a vital element in our everyday lives, as we shop and pay our household bills online, access our bank accounts and stay in touch with distant friends and relatives. Excellent digital connectivity is also a major driver behind growth, jobs and the creative industries. Without high-quality broadband services, residents will be increasingly cut off from digital local and central government services, including major programmes such as universal credit. Fast broadband services are also essential for all rural businesses, enabling them to reach their full potential by competing online.
Of course, many homes and businesses are more fortunate than I am in rural Suffolk. Indeed, it is quite easy to paint a rosy picture about how far we have come with broadband rollout. In the UK, more than 99% of premises have access to basic broadband, at 2 megabits per second—that is the best in the G8. About 90% of premises have access to broadband speeds of over 30 megabits per second—that is the highest of the big five EU economies, 8% higher than our nearest rival, Germany. By the end of 2017, it is confidently predicted that 95% of premises will have access to superfast broadband, being defined as 24 megabits per second and above. It all sounds pretty impressive and the Government’s plans in the Digital Economy Bill for a universal service obligation, clamping down on poor service providers, and the introduction of an easier system of changing service providers, as well as completing the 4G mobile rollout, should help make the picture look even rosier.
However, if we look more closely, the picture is less rosy. Take, for instance, the language that is used: the Government define superfast as broadband with download speeds of 24 megabits per second and above. However, across Europe superfast means 30 megabits per second and above, and even our own regulator, Ofcom, uses this higher-value definition. As my noble friend Lord Fox will discuss, download speeds are one thing, but what about upload speeds, which are so important for businesses?
What exactly is meant by “access to”? Access to superfast broadband is one thing, but having superfast broadband operating in the business or home is another. For example, only 30% of premises that have access to BT’s Openreach superfast broadband are using it. That is partly due to BT investing in fibre to the cabinet, but often not using fibre for the onward connection to the premises. So there may be a superfast cabinet nearby, but the connection to it from the business or home is usually copper rather than the far more efficient fibre. The degradation along the copper wire means that the so-called accessible superfast speed is nowhere near that at the premises.
BT’s efforts, such as long reach VDSL, to get faster speeds along copper may help, but compared with many countries across Europe we score low on fibre to the premises deployment. No wonder the CMS committee in another place said in July:
“The UK is a laggard by international standards in providing fibre connectivity”.
It talked of a lack of ambition in terms of fibre to the premises. With faster connections from cabinet to the premises like those offered by Virgin, the take-up is 42% instead of 30%. With full fibre to the premises it is likely to be even higher.
Of course, I welcome the exciting fibre optic developments by, among others, CityFibre, Hyperoptic and even BT, but we need a strategic shift to encourage fibre to the premises solutions for homes and businesses. In his speech, Matt Hancock, said, “fibre is the future”, and I look forward to hearing the plan for its realisation. We also need concrete action to promote new mobile technologies to play a critical role in enhancing the UK’s connectivity such as in remote areas, in on-the-go uses like self-driving cars and even in broadcasting. The UK should lead the world in 5G and the Government need to seize the opportunity in the 5G strategy that they have promised to publish next year.
However, it is clear that, even when truly superfast broadband is available in their homes, in businesses and on the go, far too few choose to take up the opportunity—not least older and less affluent people, who make up a high proportion of the 30% of the population who are non- or limited users of the internet. Higher take-up means lower unit costs. More importantly, as the Tinder Foundation and others have pointed out, only when we have a very high take-up rate can we achieve the huge benefits to individuals, businesses and the nation that superfast broadband offers. To date, the Government’s strategy has been to concentrate almost exclusively on encouraging, and partly financing, the development of superfast broadband structures. But a connected Britain is not just about the availability of superfast broadband. Driving take-up is just as important, and there has been a lamentable failure to address demand management. As a result, digital inclusion has already become a huge missed opportunity. Far more should have been done and now needs to be done to drive up demand through skills training, through marketing the benefits, by addressing barriers such as cost and by developing quality technology and content.
Of course I welcome the work being done by many others, such as BT, local councils, the BBC—through its Make It Digital programmes and apprenticeship schemes—and Barclays. But we need more, not least because the lack of digital skills is becoming a real constraint to economic growth. Indeed, 90% of all new jobs require digital skills, yet nearly three-quarters of large UK companies already say that they are suffering from gaps in digital skills. The recent government announcement on digital skills is welcome, but it is not a silver bullet and it does not go far enough. Without intervention beyond what is currently scoped, it is estimated that there will still be 7.9 million adults without basic digital skills in 2025. We need nothing short of a digital skills revolution.
Far more needs to be done to explain the benefits of getting online. The digital TV switchover was a great success, helped enormously by a brilliant marketing campaign. We need something similar to drive online take-up. The BBC’s iPlayer is already recognised as a great demand driver, and I welcome new connected TV services, from the likes of Freeview and Freesat, giving consumers catch-up TV for free from all our public service broadcasters. But more needs to be done to encourage new and exciting technological developments and high-quality content.
Furthermore, we have to address cost. Some 26% of non-users say that it is too expensive to have the internet at home. BT customers on benefits can have BT’s Basic + Broadband, but not all internet providers have such schemes. Last week the LGA, in its submission to the Government’s consultation on the Autumn Statement, called for all poorer households to get subsidies for fast broadband—as a social tariff. I hope very much that the Government will consider it part of their plans for the new universal service obligation. Following the freezing in October 2015 of the Government’s voucher scheme to help small businesses get online, it would be good to hear what the Government plan as its replacement.
Like water and electricity, reliable, superfast broadband should become universally available, and all our citizens should know what it can do and have the skills to benefit from it. Much has been achieved and more is planned, but unless we raise our ambitions still further, move from copper to fibre and address the demand management issues of skills, marketing, cost and content, the full potential will not be realised. I look forward to hearing the Minister’s reactions and details of the Government’s plans.
Baroness Pidding (Con)
My Lords, I thank the noble Lord, Lord Foster of Bath, for initiating this debate. When it comes to the challenges of rural broadband, at least for the humble end user, I can speak from first-hand experience. My partner and I are regular visitors to a lovely corner of deepest, darkest Devon and, even for visitors, the frustrations of a poor internet connection are very real. I can only imagine how much worse it is for residents. I am very pleased that the Prime Minister acknowledged the importance of rural broadband provision at the Conservative Party conference earlier this month. Not only is it a matter of basic fairness that country dwellers should have the same access to something so important, but greater connectivity is essential to unlocking the economic potential of rural areas.
The Brexit vote has made these arguments even more compelling. Not only did the result highlight deep divisions between our plugged-in cities and their rural hinterlands but we must now pull out all the stops to make the British economy as competitive as we can. Just as the canals and railways allowed the industrial revolution to flourish, so I believe will our broadband infrastructure prove the essential foundation for a globally competitive economy in the 21st century. According to the Countryside Alliance, 82% of adults believe that in the 21st century superfast broadband should be considered an essential utility, like water or heating. A similarly high proportion believes that investment in internet infrastructure would have a positive impact, more than the percentage that says the same for much higher-profile projects such as HS2 or a new runway. It is not difficult to see why.
We increasingly live in an online age and the Government are rightly trying to take advantage of the opportunities afforded by new technology to make their services available online, replacing long waits on the phone or mountains of paperwork with websites which can be accessed 24 hours a day, but it does not matter how impressive the Government’s digital services are if the national hardware is not up to scratch. For example, HMRC apparently expects all tax returns and PAYE to be completed online. Farms and other rural businesses that do not have access to adequate internet facilities have no choice but to shoulder additional costs by hiring an agent or adviser to fill in online forms for them. This is not a small number of businesses. A National Farmers’ Union survey found that 90% of respondents lacked reliable broadband while 40% had none at all and, according to the Federation of Small Businesses, half of rural SMEs are dissatisfied with their broadband connection. That is more than double the share of urban SMEs that feel the same. Such figures are deeply concerning, especially when research by McKinsey finds that businesses that have a proper online presence are growing twice as fast as those that do not.
If we are to make a success of Brexit, we need the entire economy to be firing on all cylinders. It would be foolish to strike out into the world without properly equipping ourselves for the challenge. Digital connectivity is part of this challenge. It is very important that we get ahead in this issue, otherwise the UK might find itself spending a lot of money delivering yesterday’s solutions to rural people as the cities embrace the next wave of new technology. The Government are clearly taking this issue seriously and I am sure that many of their proposals will be welcomed by rural communities, in particular the universal service obligation of 10 megabits per second and the commitment that 95% of UK households will have superfast broadband almost two and a half times that speed by 2017. However, what about those rural areas where the speed is currently under 2 megabits per second? Can we not start with these?
I recognise the importance of mobile internet so I am particularly pleased by the commitment to see 4G services rolled out to 98% of the population as part of BDUK. However, what about the other 2%? That 2% represents 1.3 million people who will be missing out.
Before this House can be satisfied that we really are building the state-of-the-art, future-proof, comprehensive and accessible internet infrastructure that this country needs, there remain questions to answer. I would like to hear a clear plan from the Government for how they intend to identify so-called not-spots—gaps in the coverage of the network. We must remember that poor connections can affect all sorts of areas and are not limited to the most remote communities and households. A good start would be reform of planning laws and the electronic communications code to make it easier for providers to build the infrastructure they need, while the Church of England's decision to allow 10,000 rural churches to use their spires as wireless beacons is a welcome and imaginative one.
I would like to see much more concrete evidence that the plans for mobile broadband will really deliver the coverage that rural businesses and communities need. I am also keen to hear how the Government intend to ensure that their rural internet solutions are sustainable. It is little use spending a lot of money to achieve equality today if cities retain structural advantages that will allow them to race ahead tomorrow. The Government must demonstrate that not only will the network they are delivering bring the countryside up to speed today but it will allow it to keep pace in the future.
Baroness Scott of Needham Market (LD)
My Lords, like the noble Baroness, I shall focus on the question of rural broadband services and, like my noble friend Lord Foster, I am doing that from the perspective of someone who lives in Suffolk.
Baroness Scott of Needham Market
Overrepresentation of our lovely county, indeed. I live in a very small village, and it is a mark of how village life has changed that when we come together for our social events one of the main topics of conversation is how bad the broadband is and how it has taken all night to download a two-minute YouTube video. I accept that the joint efforts of BT and the Government have taken us to a position where almost all households now have access to basic broadband, but I also agree with the proposition that in today’s world that simply is not enough. I note that the Countryside Alliance estimates that 48% of rural premises are not able to reach the speed envisaged in the USO.
Rapid digitalisation has meant that a whole range of rural services now require a good broadband link. As the percentage of households covered by superfast broadband increases, so that digitalisation gains pace. That means that a small minority of households run the risk of being left behind. I also observe that, as the assumption is made that households have superfast broadband, the functionality of the websites themselves has changed. What looks like an exciting and thrilling website to some people is actually a nightmare if you are trying to use it in a rural area with poor speeds.
The purely commercial case would have taken superfast broadband in Suffolk to around 50%. I pay tribute to the local authority in Suffolk, which, at a time when so many local authorities are strapped for cash, has invested heavily to meet around half the extension costs. However, around 3% of people in Suffolk—I think it is about 5% in the whole UK—remain outside any funded policy commitment, so as it stands there is a real danger of a big divide for them. There has been some speculation that this will be dealt with on a demand-led basis. To my mind, that is very much a suboptimal solution. The problem is that as we near the high 90s, the cost per premises increases dramatically as the civil engineering works and the distances become more complex and therefore the value-for-money question for those last few households becomes more and more difficult. We need to think about the cost per premises across the whole venture, not an ever-reducing number of houses.
I have other concerns about a demand-led USO. What if one house wants it now and then the neighbour wants it in two years’ time? That is simply not a practical or economical way of doing business. If someone who does not want it now sells their house, the new people coming in may want it; so the demand-led model has real problems.
The BT community fibre grant scheme is very welcome but it is limited to communities with schools and, of course, many small villages no longer have schools. When I think about my very small village, there are a number of older people who are not interested in broadband, but we also have young families with small children and, as they get older, I worry about whether they will stay in the village if they do not have the access they need in terms of schooling and social media. Rural services, not only in villages but even in market towns, are declining rapidly as banks close and government and council offices shut their doors; for example, when the Ipswich tax office closes in a few years’ time our nearest tax office will be in Stratford, east London, so digital services are key. Of course, to add to the problem in many rural areas we have poor mobile phone coverage as well: 4G is pretty much non-existent where I live, so we do not have the benefit of that either.
Until May I was chair of your Lordships’ EU Energy and Environment Sub-Committee, which included agriculture. The last inquiry we carried out was about increasing resilience. Access to new information and innovation is key to helping farmers. Some of the most exciting innovators we saw told us how they were working from YouTube videos from around the world and how they use Skype, but very few farmers are far-sighted enough to make the investment; one farmer had invested in satellite. If farmers are to thrive in the new world to which the noble Baroness just referred, they need this, too.
Another problem is understanding what your speed actually is. It is usually given to you in terms of your postcode, but of course in rural postcode areas the distances are enormous, so these can be pretty meaningless and there is an issue about the masking of huge variations. We need to keep rural communities viable, not just in Suffolk or Devon but everywhere. Digital infrastructure is now as important to that as water, gas, electricity and roads.
The Lord Bishop of St Albans
My Lords, my thanks, too, go to the noble Lord, Lord Foster, for securing this important debate. I, too, want to address rural issues and I declare an interest as president of the Rural Coalition. Many of our members are deeply concerned about this area. As other noble Lords have mentioned, nearly half of rural households in the UK currently struggle with broadband speeds of less than 10 megabits per second. Around one in five rural households can only access broadband speeds of under 5 megabits per second, and a significant proportion cannot access any broadband at all. This lack of connectivity acts as a huge obstacle to the growth of the rural economy and to rural sustainability. This is even more important as we get ourselves geared up for Brexit.
Without adequate broadband, small businesses cannot grow or thrive; freelancers struggle to connect with potential clients, particularly in an age of videoconferencing; farmers cannot complete the many forms for the smooth operation of their businesses, such as cattle movements or the basic payments scheme; and it is almost impossible for anyone to buy or sell anything online. Young people can also be very isolated from their friends. Noble Lords who, like me, know rural issues well realise that rural isolation is a huge issue. Children can also struggle to complete their homework. Students in remote areas cannot access resources or learning, which is particularly problematic as many educational institutions develop part-time and distance learning. So areas of the country without adequate access to broadband could increasingly fall behind.
The current minimum provision of 2 megabits per second is insufficient and although the 10 megabits per second universal service obligation promised by the Government for 2020 is welcome, it needs to go further. The USO must mean that households and businesses are connected to the network in the same way that electricity and water have to be provided. As the noble Baroness, Lady Scott, said, BT currently adopts a demand-driven approach, providing new infrastructure and connections only when a minimum number of people in an area request it. I am aware of instances where households and small businesses have been prevented from moving to new premises, not because the broadband is not available but because there is no interest in providing the additional local infrastructure needed. The USO must also rise in line with the increasing demands of technology so that the hardest-to-reach areas are not continually left behind.
I welcome the Government’s commitment to improving competition when it comes to delivering broadband for the 1.5 million rural households without an adequate provision. That is important because, while fibre might be the appropriate technology for 90% of the UK, it is not always the best option for isolated rural areas, where mixed technologies, particularly wireless, can be far more cost effective. We have already heard reference to Broadband Delivery UK and its market test pilots, which suggest that where a hybrid technology approach has been used, particularly merging fibre and fixed wireless, it has proved effective in very challenging areas, delivering high-coverage percentages while demanding relatively low public subsidy. Can the Minister give assurances that the final assessment of these projects will be published soon, the findings implemented quickly and funding provided, so that these alternative services can be delivered on the large scale that is needed?
I hope that the Minister might also explain a bit more about how DCMS expects the USO to be fulfilled. Most public statements on fulfilment seem to indicate that the focus remains very much on fibre, without any real consideration of proven alternatives. There seems to be a danger that a focus on only one technology might mean that rural communities could end up paying over the odds for fibre, when alternative technologies would have been more cost effective.
Finally, on the issue of mixed technologies, already referred to by the noble Baroness, Lady Pidding, I want to mention the potential for church spires in some of the hardest-to-reach rural areas to be adapted for wireless broadband provision. There are a number of examples of this in rural areas, including in Norfolk, Herefordshire and Worcestershire, which all have more than their fair share of hard-to-reach areas. WiSpire in Norwich has already shown how this kind of initiative can be successful and of real value to both the Church and the local community. It is a win-win situation. I hope that there might be opportunities for DCMS and the Church to have further discussions about how we can take that kind of collaborative working forward.
Lord Fox (LD)
My Lords, I join other noble Lords in thanking my noble friend Lord Foster for securing this debate, which serves as a useful preface to the Digital Economy Bill and the discussions that will ensue on that. I shall ask a number of questions of the Minister, but I understand that he has a limited time in which to answer them. This is part of the continuing debate that I am sure we will all be having as the Bill makes its way towards us.
First, I want to acknowledge the scale of the rollout challenge that has been undertaken. We can see from the numbers that it has come a long way. We should thank the hardworking teams in Openreach, who have done some pretty tough stuff to get us as far as we have. We should not debate this matter without making that acknowledgement. However, the UK’s broadband capacity is very important, as is access to it, and we need to be honest with ourselves about how far we have got on this rollout journey.
I want to set the scene slightly, while avoiding too much history. It is worth looking at the facts. BT has a number of irons in the fire. It has a considerable asset in its copper network and, understandably, like any company, it will want to leverage the value from that asset. Meanwhile, it is increasingly selling digital products down the network. These are products that add further strain to capacity where it is constrained, down the network that it has been tasked to build. It also has a business selling network services. This portfolio of businesses is not generally compatible with the building and operating of what should be a dull and efficient utility—let us call it a superefficient utility. To put that in context, it is the equivalent of asking a consortium comprising Network Rail, Eddie Stobart and Tesco to build and own our roads. We would not do that. I know Ofcom’s previously stated preferred option for how the ownership of Openreach might change and I am not going to spend much time—because we do not have it—debating that future ownership model, which clearly will be an issue, but I would welcome the Minister’s view on that.
Leaving that aside, does it matter who owns it and how it works? Do the ends justify the means anyway? My noble friend Lord Foster gave us a snowstorm of percentage signs and download speeds, proving how well or otherwise we are doing. Perhaps we should be somewhat wary of how those speeds are measured. My noble friend Lady Scott pointed out that, essentially, these are theoretical models based on the make-up of the network, how it gets there and postcodes. Who does that measuring? We know, as we heard from all the speakers so far, that the rates quoted rarely match those actually experienced in the office and at home. Above all, as my noble friend Lord Foster said, we should remember that the rate-determining link in the broadband delivery chain for most people remains a strand of often quite old copper wire linking them to a cabinet somewhere in the general vicinity of where they live or work. Will the Minister comment on having some independent verification of the measures we use for download speed? How would he seek to add to the confidence that consumers and buyers of these services can have in those speeds?
Perhaps we are looking at this the wrong way round. The focus on download speed is itself revealing, reflecting an aim by almost everybody to send stuff to people. It reflects an ambition to sell to consumers: the better the download capacity, the more we can put down the pipe and the more money we can make. But this is not a one-way street and for many who aspire to be part of the digital economy the priority is often the other way round: upload speed is equally important, and almost always lower in the available packages. Our budding designers, fintech entrepreneurs, games makers and whoever else need effective upload speeds to deliver their work to the next stage in their value chain. To realistically assess our success to date, this needs to have equal status with download speeds. Does the Minister agree with this analysis and will he push Ofcom and others to include stretching upload targets in the data we set for the network?
Finally, there is the industrial strategy—two words used by many people but we have yet to find out exactly what they mean. We heard from a Minister in the Chamber yesterday how important infrastructure will be in the industrial strategy—whatever that looks like. Last month, as I think the noble Baroness, Lady Pidding, said, we heard from the Prime Minister in her party conference speech that we need better broadband connectivity to create equal opportunity across our country. Mrs May clearly does not think that what we have to date is good enough and I am happy to agree with Theresa on that. While it is important that we all adopt a realistic understanding—we need to develop that—of how far we have got, we also need to understand that the current targets are not good enough. The world has moved on substantially since those targets were set. We must raise the bar higher and be more ambitious, rather than merely meet the current set of targets. So my final question is: how will the Minister ensure that the industrial strategy will deliver a 21st-century broadband network, rather than the 20th-century one that we are currently trying to build?
Lord Aberdare (CB)
My Lords, I too congratulate the noble Lord, Lord Foster of Bath, on obtaining this debate on a subject of such great importance. Having served on your Lordships’ Digital Skills Committee, I particularly agreed with the points he made on digital skills and digital inclusion. It is also a pleasure to speak after the noble Lord, Lord Fox, who, in a previous life, was a business client of mine.
I shall address two issues, with apologies for repetition. First, my concern that the superfast broadband rollout strategy will not prove ambitious enough; and secondly, the need for a more aggressive approach to the challenge of bringing superfast broadband to the elusive “final 5%” of premises across the UK.
We pride ourselves on the fact that the UK is a leading nation in terms of our digital infrastructure, including access to high-speed broadband. However, as the noble Lord, Lord Foster, told us, the figures tell a rather less encouraging story. Our position in the Akamai global rankings for average fixed-line broadband performance is slipping. In the latest table we are ranked 19th in the world, down from 14th, 18 months previously; and ranked 13th in Europe, down one place. Our average speeds are improving, but at a slower pace than in many other countries in the top 30—only just over half of UK broadband connections achieve speeds of 10 megabits per second. Therefore, I welcome the proposed universal service obligation for access to broadband of at least 10 megabits. However, I question whether this will be enough. In these days of video streaming, catch-up television, big data, massive open online courses, and coming developments such as the internet of things, 10 megabits will soon fall far short. It does not even begin to meet the Government’s definition of superfast—namely, speeds of over 24 megabits.
As we have heard, most broadband supplied by BT’s Openreach subsidiary relies on copper wire, not fibre optic cable, for the final link to user premises—so-called fibre to the cabinet, rather than fibre to the home. This seems bound to constrain achievement of the even higher speeds likely to be required in the future—ultrafast broadband of 100 megabits or more, or hyperfast broadband of 1,000 megabits and up, for a truly gigabit society, as countries such as Singapore are aiming for. Fibre to the home coverage in the UK is below 2%, against a western European average of 25%. Therefore, I welcome Ofcom’s commitment to,
“encourage large-scale deployment of new ultrafast networks, including fibre direct to homes and businesses, as an alternative to the copper-based technologies currently being planned by BT”.
I realise that there are trade-offs between present costs and future-proofing, but I hope we will not rely too heavily on a single supplier, Openreach, and a single approach, fibre to the cabinet, lest we find in the future that we end up with the equivalent of only one runway—to use a topical comparison—at a time when we need several, if not many more. I certainly would like to see other suppliers encouraged, and indeed incentivised, to come up with more innovative solutions, not least to find ways of tackling that stubborn final 5%.
That brings me to my second theme. My home in Carmarthenshire has no mobile telephone coverage. BT provides a landline, with poor line quality and not infrequent interruptions or breakdowns. Until quite recently, BT also offered the only so-called broadband service available, which seldom, if ever, reached 2 megabits, despite being charged at BT’s standard broadband rates. No wonder Carmarthen East and Dinefwr was ranked third bottom in an Ofcom table of broadband speeds by constituency as at June 2015. Salvation came in the form of a small local network supplier, appropriately called ResQ, deploying a fixed wireless access system to which we were fortunately able to connect via a farm across the valley—I do not think we have a church spire in sight. We now get speeds of 10 megabits or more for both download and upload in order to support local businesses. However, the prospect of any significant further improvement seems remote, particularly if it depends on BT and Openreach, which already seem at full stretch just keeping the landlines working.
Would it not make sense to open up at least some of these hard-to-reach and less well-covered areas to a greater variety of different suppliers and technologies, with support and encouragement through some of the funding allocated to promote high-speed broadband rollout? Even if Openreach is not wholly split off from BT, there is surely a case for trialling new and more ambitious technologies aiming for higher levels of speed and service in some of these hitherto deprived areas. How otherwise can we avoid them slipping further and further behind in an increasingly digital world, as the right reverend Prelate pointed out? How nice it would be if some of the areas currently languishing in the final 5% backwater could be transformed through innovative technologies, including satellite and wireless technologies, for example, into the leading 5%, helping to bring the UK nearer to the top of the global league tables, where it surely needs to be to achieve the Prime Minister’s aspirations for our role in the world after Brexit. I hope the Minister will be able to reassure us on plans to provide greater drive and impetus to make superfast broadband a genuine utility service, including for the final 5%.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a very good debate. As someone who is technologically a bit illiterate, I have learned much too much too quickly, and I am probably going to get confused as I try to go through some of my points.
Anybody who has got teenage children—I have children in their late teens—will know the agony of trying to match their expectations in terms of what you provide in your home environment. In Buckinghamshire, we have just experienced the rollout of fibre. I thought I could relax and retire at that point. It has been a nightmare because what you are not told is that there is a headline figure of 30 megabit downloads, but you do not realise that it is still two miles to the nearest exchange, it is still copper wires—why copper when everyone is giving up the landline, I do not understand—and you still have to compete with others in the same area, which is called the contention ratio.
That leads to a question about exactly what target we are aiming for. We have had a number of very good and interesting responses on that. There are already disagreements between the Government’s principal adviser, Ofcom, and the Government about whether it is 30 megabits or 24 megabits. We are still talking about people getting, on average, up to 2 megabits, not 10 megabits, which seems to be what Ofcom regards as sufficient to meet the needs of a typical household—not my household—to access government e-services, do basic web browsing and make video calls. We are not addressing what the noble Lord, Lord Fox, picked up, which is the way demand can change, and, as the right reverend Prelate the Bishop of St Albans pointed out, people in rural and other communities have been relatively low users from necessity not choice. We are not measuring up to the demand that we are expecting over the next 30 years. It may well be that increases in data usage are coming and will largely be in urban areas on fibre, but if we roll this out and, as the noble Lord, Lord Foster, suggested, get behind an inclusion strategy that shows people why they could and should be using digital, then we are talking about huge increases which I do not think are envisaged.
If connection is the main aim, we are probably not going to get to the right place quickly enough. It is a necessary but not sufficient way of progressing. We will have to think much harder about education, skills, the current barriers, how content changes will make differences and the possibility of subsidies and additional support for people. Without that, we will continue to have a suboptimal solution to a problem which has to define us in the new economy that we are approaching.
To sum up, most people are saying that there is an opportunity here—presumably we will return to this in the Digital Economy Bill—to do something that is a step change not an evolutionary change. If we do not do that, if we do not aim high for the gigabit society, we will be rushing to catch up. We are not in a good place, as the figures mentioned by the noble Lord, Lord Aberdare, show. We are way behind other countries in western Europe in terms of the support that is being provided. Sweden and Spain now have 80% of homes served by fibre. We are a long way away from that. I spent some time in a very small place in south-west Ireland called Skibbereen. It is not well known, but it has one of the best internet offices I have experienced. You can get speeds that reflect almost frightening capacity and it is full of people taking their work in to the Ludgate Hub, as it is called, in order to try to build their businesses in a rural environment. Without it, there is no doubt that they would have had to travel to Dublin in order to survive. That is the future we should be thinking about. We should gain more experience from it and try to aim higher than we are currently.
Finally, when we come to the Digital Economy Bill, I hope that we will also look at consumer rights. The Bill takes some grudging steps towards trying to make sure that those who use the new technologies have redress, but we have failed to achieve some of the changes that could have been put into the Consumer Rights Act 2015 in terms of making sure that consumers have those rights. I give notice to the Minister that we on this side will want to come back to some of these issues when we get to the Bill. It is good that providers will have to be more responsible for what they provide in terms of broadband speeds and effectiveness, but there has to be compensation on a much greater scale than is currently the case from those who do not supply it. We also have to make sure that those who acquire products on the internet using the superfast gigabit services that are coming down the track will have the same rights as ordinary consumers.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I will speak as quickly as I can because there is a lot of ground to cover. I am most grateful to the noble Lord, Lord Foster, for securing this debate and for all the contributions to it. Like the noble Lord, I live in an area with slow broadband and I share the experience of the noble Lord, Lord Aberdare, of using a good local supplier—Wurzel in my case rather than ResQ—which produces 50 to 70 megabits per second, but that is not available to everyone. The other thing I should say is that I am looking forward very much to being invited to a party in Suffolk where the main topic of conversation seems to be broadband. There is rightly a lot of interest in the superfast broadband programme and we agree that fast broadband is increasingly regarded as a necessity of modern life. I agree with virtually all the points made by noble Lords that the question is how we will get there. So I am delighted to have the opportunity not only to celebrate what we have done to date—and that is a lot—but also to reassure noble Lords that we are doing even more to ensure the delivery of the sort of broadband service that is required for the UK not just for today but for tomorrow, which all noble Lords have spoken about.
I know that some noble Lords are worried that we are in the slow lane, so to speak, in terms of broadband speed. I cannot quibble with the statistics cited by the noble Lord, Lord Aberdare. I do not know how long it took him to find those rather depressing numbers because in part through the work done by Broadband Delivery UK, mentioned by the noble Lord, Lord Foster, we are sitting at the top of the EU five; Germany, Spain, Italy and France, and indeed we are 8% higher than Germany, our nearest rival. But I agree that within those statistics there are quibbles about upload and download speeds, average speeds and latency. However, that is not really the point and we want to make it better. When it comes to digital infrastructure connectivity, we want the UK to be not only the lead in Europe, we want to be a world leader.
Perhaps I may remind your Lordships at this point of the scale of the superfast broadband programme which in addition to the already extensive commercial rollout shows how much has already been achieved. We are investing £790 million to reach areas untouched by the commercial sector while local and European funding has increased that public investment to a total of £1.7 billion. In view of the concerns surrounding Brexit, it is also worth noting that all EU funding of broadband contracts is guaranteed for at least the next two years until the UK is officially no longer a part of the European Union. Along with the noble Baroness, Lady Scott, and the noble Lord, Lord Fox, I pay tribute to the support of local authorities and the devolved Administrations for their tremendous support and investment in the Government’s superfast programme. That reflects their recognition of the local benefits that superfast broadband can bring.
My right honourable friend Matt Hancock, the Digital Minister—I should say the Minister for Digital; he is a real Minister, body and soul—explained recently that our path to a more digitally connected UK can be envisaged as a three-part journey. First, we must complete the rollout of universal 4G and superfast broadband between now and 2020. Secondly, we must continue to drive connectivity in the areas of need, both rural and urban, and support a competitive market for delivery. Speaking of competition, in answer to the noble Lord, Lord Aberdare, on Openreach, we support Ofcom’s position on the need to improve digital connectivity, including looking into the position of Openreach. It is already subject to wholesale access regulation that allows other suppliers to access its networks. Third in our trio of priorities, we must start work now on ubiquitous 5G and fibre over the decade ahead—by that, I mean fibre to the premises, and I will come to that later if I have time. That is, of course, the future for broadband, as the noble Lord, Lord Foster, said.
In answer to the question from the noble Lord, Lord Fox, the reason we talk about fibre to the premises is in part a recognition of the need to improve upload speeds. I understand quite well the issue about BT’s investment in its copper, but that will have to be dealt with in due course.
The first step of our journey is progressing well. Indeed, the figures coming out of the BDUK programme to date are encouraging. More than 90% of homes and businesses now have access to superfast broadband, up from only 45% in 2010. In fact, 88% has reached Ofcom’s higher measure of 30 megabits per second, which the noble Lord, Lord Stevenson, mentioned. This will increase and be updated in December 2016. More than 4 million additional homes and businesses have access due to the Government’s programme. This will rise to more than 5 million additional homes and businesses by the end of the programme. We remain on track to get to 95% superfast coverage by the end of 2017.
In addition, more than 42,000 SMEs across 52 cities have benefited from superfast and ultrafast broadband connections because of the Government’s broadband voucher scheme. To choose a random example, coverage in Bath, the former constituency of the noble Lord, Lord Foster, is expected to reach 98% by December this year, well above the national average. At the moment, any home or business with speeds below 2 megabits per second can access a grant for better broadband through alternative technologies, such as satellite or wireless, through the Better Broadband Subsidy Scheme. In fact, 99% of UK premises have access to basic broadband, which is the best in the G8.
Furthermore, because of provisions in the BDUK contracts, funding is being returned by suppliers as a result of higher than expected take-up, so £129 million has already been made available, with at least as much to come again. Together with the project savings, local authorities and the devolved Administrations should have more than £400 million available to reinvest in superfast broadband coverage over the next three years. As a result of the superfast broadband programme, coverage should increase to around 97% by 2020. Indeed, 20 new broadband procurements are already being taken forward by local authorities and devolved Administrations using this funding and other local and European sources of funding that they have been able to access. This includes £14.5 million that the Government have allocated to support ultrafast broadband in south-west England. Each of these procurements is open to all suppliers, both large and small, to bid for.
As mentioned previously, we understand that fast broadband is very much a fourth utility in modern life and that the future most definitely lies with fibre and 5G. The challenge that we are now addressing is how to get there. It is important to have market innovation in this area, with the Government setting the framework and supporting competition at all stages to ensure the best outcome. The industrial strategy needs to recognise digital skills, infrastructure and the power of digital in the economy. I am sure that more details will be available in due course.
The importance of broadband to rural communities is well understood and unprecedented, and I speak from personal experience. As more and more government services move online, rural businesses and households need to be able to rely on a good broadband connection so that they can continue to operate effectively. That is why the Government announced plans last year to introduce the new broadband universal service obligation, of which many noble Lords spoke. This will ensure that anyone who does not benefit from the existing commercial or publicly funded programmes is not left behind. It will give all homes and businesses the legal right to a connection of at least 10 megabits per second on demand. The Digital Economy Bill will be coming before this House either at the end of this year or at the beginning of next year and we will talk about that then. Although it will be set at 10 megabits per second initially, the Bill includes a power to review the USO over time to make sure it continues to meet people’s needs, which the right reverend Prelate mentioned, but we realise that there are many details to be worked out, some of which were outlined by the noble Baroness, Lady Scott, and others. We will take all these difficulties on board and look at the detail behind the USO and we will be making crucial decisions in due course. In the meantime the USO needs to be passed in the Bill in this House.
To conclude I want to mention some points that noble Lords raised. The noble Baroness, Lady Pidding, asked how we identify not-spots. Ofcom undertakes mapping to do that. The noble Lord, Lord Foster, mentioned digital skills and we certainly want digital skills to be embedded in education. We are actively looking at what more is needed to increase digital skills. The right reverend Prelate asked about the final report on market pilots which tested new ways of delivering superfast broadband in hard-to-reach areas. That is due to be published by the end of 2016. That is about all I have time for. The noble Lord, Lord Foster, made a number of other points. We understand the problem of not doing enough to get fibre to the premises and we will be addressing that. We agree with driving take-up and I will write to him on that.
We are working hard and we are making progress. I think we all agree with the ultimate objective, which is to not be satisfied with just superfast broadband; we want fibre to the premises for everyone and we want increasingly high speeds because that is what the future will require.