App Security and Privacy Interventions
Julia Lopez Excerpts(2 years, 6 months ago)
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The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
I am pleased to inform the House that the Government have published a document titled “Call for Views on App Security and Privacy Interventions”, which sets out proposed interventions to protect consumers from malicious and poorly developed apps.
App stores can serve as trusted digital marketplaces that help protect users, but this Government expect them to have the right processes to check that apps are not a risk to users’ security and privacy. While many app stores have vetting and review processes, malicious and insecure apps continue to make it onto some stores. Developers also have a clear responsibility for ensuring that they are creating apps with appropriate security and privacy. Given the increasingly important role apps play in everyday life, we need to take action to manage the potential risks associated with using apps.
A key ambition of our new national cyber strategy, published in December 2021, is to reduce cyber risks so businesses can maximise the economic benefits of digital technology and citizens are more secure online and confident that their data is protected. The Government’s work on app security and privacy will put in place a framework that ensures operators of app stores and developers are taking appropriate steps which mean that users are not put at risk from malicious apps. The national cyber strategy also pledges to secure the next generation of connected technologies, for which apps can often be an important enabler. Additionally, as set out in the plan for digital regulation, we will ensure our overall approach to governing digital technologies is proportionate and supports growth and innovation within the sector.
The interventions suggested in this publication include a voluntary code of practice that sets out baseline security and privacy requirements for app store operators and app developers. The code would be a first step in a series of policy interventions intended to protect consumers from malicious and insecure apps, with the possibility of regulating aspects of the code in the future, should these policy interventions not achieve the desired outcome. These proposals complement work that is already happening across Government to help protect users and establish a pro-competition regime for digital markets, which will introduce new rules to ensure digital consumers and businesses are treated fairly so that new and innovative tech firms can flourish. As digital markets evolve, such as the distribution and methods for accessing apps, our focus will be to ensure that users are protected and developers are building apps with appropriate levels of security and privacy.
Alongside this publication, we have launched an eight-week call for views process, where we will be welcoming the public’s views on the proposed interventions. These views will help shape UK Government policy over the coming years and allow both consumers and businesses to securely use apps as part of everyday life, helping make the UK a stronger and more secure place for people and businesses.
I will place a copy of the “Call for Views on App Security and Privacy Interventions” document in the Libraries of both Houses.
[HCWS3]
Channel 4 Privatisation
Julia Lopez Excerpts(2 years, 7 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
(Urgent Question): To ask the Secretary of State for Digital, Culture, Media and Sport if she will make a statement on the privatisation of Channel 4.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
Our TV and radio industry is one of our great success stories, and public service broadcasters such as Channel 4 are central to that success. Our PSBs sit at the heart of our broadcasting system, delivering distinctive, high-quality content and helping to develop skills, talent and growth across the entire country.
However, the broadcasting world has changed beyond recognition in recent years. Rapid changes in technology and the rise of American streaming giants such as Netflix, Amazon Prime and Disney+, not to mention YouTube and social media platforms, have transformed audience habits. Viewers can watch what they want, when they want, on their laptop, phone, smart TV or Fire stick. As a result, while streaming services have enjoyed a 19% increase in subscribers in recent years, the share of total viewers for linear TV channels such as the BBC and ITV has fallen by more than 20%.
The Government are determined to protect the role of PSBs in our nation’s economic, cultural and democratic life, and to make sure that they remain at the heart of our broadcasting system no matter what the future holds. Tomorrow, therefore, we will be publishing a White Paper that proposes major reforms to our decades-old broadcasting regulations—reforms that will put traditional broadcasters such as the BBC, ITV and Channel 4 on an even playing field with Netflix, Amazon Prime and others, and enable them to thrive in the streaming age. We will set out the full details of our proposals when the White Paper is published.
It is important to understand that the sale of Channel 4 is just one part of that major piece of reform. Like the rest of the White Paper, it is a reflection of the transformation that broadcasting has undergone in the last few years and the need to make sure that our PSBs can keep pace with those changes.
Channel 4 has done a fantastic job in fulfilling the original mission that it was set by the Thatcher Government: to spur independent production and deliver cutting-edge content. The independent production sector has exploded in the last few decades, growing from a £500 million industry in 1995 to an industry of approximately £3 billion in 2019. However, since it was structured to address the challenges of the 1980s, there are limits to Channel 4’s ability to adapt to the 2020s and beyond.
Channel 4 now faces a new set of challenges. It faces huge competition for audience share and advertising spend from a wider range of players, many of whose deep pockets have been driving up production costs. Streamers such as Netflix spent £779 million on UK productions in 2020, more than twice as much as Channel 4. While other PSBs, such as the BBC and Channel 5, have the freedom to make and sell their own content, Channel 4 has no in-house studio and relies almost entirely on linear television advertising spend at a time when those revenues are rapidly shifting online.
Under its current form of ownership, Channel 4 has few options to grow, invest and compete. The Government believe that it is time to unleash the broadcaster’s full potential and to open Channel 4 up to private ownership and investment—crucially, while protecting its public service broadcasting remit. We believe we can sell Channel 4 to a buyer who will fund emerging talent and independent and impartial news, and invest in every corner of the UK.
We intend to use the proceeds of the sale to tackle today’s broadcasting challenges. As I said, our independent production sector is thriving. Only 7% of its revenue comes from Channel 4. The much bigger challenge we face is a shortage of skills. Our film and TV studios are booming. We need to give people the skills to fill the jobs in them, so we will reinvest the proceeds of a Channel 4 sale into levelling up the creative sector and giving people in left-behind areas the training and opportunity to work in the industry.
The sale of Channel 4 will not just benefit the broadcaster; it will deliver a creative dividend for the entire country. As I said, the future of Channel 4 is just one part of our wider reform of the entire broadcasting sector, and I look forward to providing the House with the full details shortly.
Lucy Powell
The sell-off of Channel 4 is an important matter for Parliament, yet instead of a statement we had announcement by tweet during recess, and now we hear that a White Paper is to be published tomorrow, when we will not be here and there will not be an opportunity for statements. Where is the Secretary of State to defend her policy today? It is a pattern, and it is a disgrace. Nothing screams rudderless Government like fixating on the governance of Channel 4 while people’s energy bills are going through the roof. It did not even make the list of pretty bad ideas discussed at yesterday’s Cabinet.
Why sell off Channel 4, and why now? Is it because there is an overwhelming clamour from the public? The Government still have not published the 60,000 consultation responses, but my understanding is that the vast majority were against any sale. Is it to help level up the country? Given that Channel 4 commissions half its budget outside London, creating a pipeline of talent across the nations and regions, and stimulating the creative economy in places such as Leeds, Glasgow and Bristol, of course it is not. Is it to create more British jobs in our world-leading creative industries? The Minister and I both know that the likely buyers are going to be the big US media companies, looking for a shop window for their own content. That will mean fewer British-made programmes for British audiences and fewer British jobs. Any UK bidder could lead to less competition, and of course they would be looking at economies of scale.
Is it to support the independent production sector? Channel 4 is currently, uniquely, a publisher-broadcaster, allowing start-ups and independents to retain the value of their own programmes, helping them grow and export. No buyer is going to continue with that model. That is why the UK independent production sector is so overwhelmingly against the sell-off. Or is it to save the Treasury money? I know that the Secretary of State was a bit confused about this in front of the Select Committee, but Channel 4 does not cost the taxpayer a single penny. Indeed, its profits are all reinvested in British jobs and programming.
The Secretary of State says the sell-off is needed to help Channel 4 compete with the likes of Netflix and Amazon. The truth is it will be gobbled up by them. She says the sell-off will generate a pot of up to £1 billion for her to dish out in grants, but Channel 4 already invests that amount here, commercially, each and every year. She says she will protect the essence of Channel 4 in a new remit, but I thought that was the straitjacket she wanted to free it from. The truth is that the sell-off just does not stack up, and the Secretary of State is running scared of Parliament. In fact, it is going to clog up Parliament for months to come because she has no mandate to do it and there is widespread opposition to it on her own Benches.
I can only conclude that this is a deliberate distraction from partygate, a vendetta against Channel 4 news coverage, or another act of cultural vandalism. Channel 4 is a great British asset, owned by the public, that does not cost them a penny. It commissions award-winning British programmes owned by the small independent sector. That is why Margaret Thatcher invented it, and that is why the Government are wrong to sell it off.
Madam Deputy Speaker (Dame Rosie Winterton)
I really do need to remind both Front Benchers that in an urgent question the Minister has three minutes, the shadow Minister has two minutes, and the SNP spokesperson has one minute. [Interruption.] No—if it is a statement, it is different. I call Minister Lopez.
Julia Lopez
Thank you, Madam Deputy Speaker. It is important to say that tomorrow is a sitting day, and we bid for a ministerial statement on this subject.
We are very keen that the House understands that the Channel 4 sale is not a stand-alone issue; it sits within a very important series of reforms that we as a Government want to make to the public service broadcasting system. Channel 4 is an incredibly important economic asset in that ecosystem, and we want to make sure that it is sustainable not just now but long into the future. We think it is our responsibility as the Government to do that future-gazing and to make sure that Channel 4 has the freedom and flexibility it needs to be able to make changes to thrive.
There are two important things to understand about Channel 4. First, it cannot retain control of its own intellectual property, and therefore it does not have the same financial flexibility as the likes of ITV and the BBC, both of which have their own studios. Secondly, its borrowing sits on the public balance sheet, and therefore if it required greater financial flexibility in the future, the Treasury would need to be content with that.
As I say, tomorrow is a sitting day. We had very much hoped that we would be able to set the sale of Channel 4 in the context of a wider series of incredibly important reforms that we wish to make to the public service broadcasting sector. I regret that the hon. Member for Manchester Central (Lucy Powell) does not think this is an important issue and has dismissed it as some culture war. That could not be further from the truth. The last time that important broadcasting reforms were made was 2003. I hope she will agree that the broadcasting world has changed immeasurably since then, and that the Government would not be responsible if we did not address some of those changes.
We think the public service broadcasters play an incredibly important democratic, cultural and economic role in our nation’s life and we want to sustain that role, so we think the privatisation of Channel 4 is an important part of a wider series of reforms. We will make further details available to colleagues, and I will be engaging one-to-one with colleagues who have concerns as we go forward.
Sir Peter Bottomley (Worthing West) (Con)
The Minister may or may not have been convinced by the words that she read out, but I do not think that they convinced the House. Channel 4 is in the best state that it has been in creatively or financially for decades. We were told that it is supposed to be able to compete with Netflix, but Netflix is a loss-making, debt-ridden business whose share price is now $198 when it was $700—an enormous drop.
If the choice for the country is about Channel 4’s specific remit and structure as a publisher-commissioner that does not hold programme rights, the Government could do best by leaving it alone. If they do not, they could engage with Channel 4’s management team about its proposals—I am not sure that we have all seen them in public—and explain why they prefer to go to the United States than to have a state broadcaster that is independent of Government.
Those in government may not like Channel 4 because it may criticise the Government in its news output, but it is better to be in government and criticised than to be in opposition and cheer.
Julia Lopez
I thank my hon. Friend for his comments. It is important to understand that the Secretary of State and I went into the entire process with a very open mind—[Interruption.] That is certainly true. We went into this looking at what is best for the public service broadcasting sector as a whole going forward. We looked incredibly carefully at alternatives, and I hope that the material that we will publish tomorrow will assure him of that fact. We think that we can get the right blend by retaining Channel 4’s public service broadcast remit, which maintains its distinct and unique appeal, while enabling it to get the private sector capital investment that it requires to deal with some of the wider challenges presented by the likes of Netflix.
I appreciate what my hon. Friend said about changes in subscriptions. I think that underlines the volatility of the market and the need to be able to compete and invest in content. That is incredibly important. If Channel 4 is to remain uniquely appealing, we need that investment in content, and we believe that the reforms will give it greater sustainability going forward.
John Nicolson (Ochil and South Perthshire) (SNP)
Well, here we go again: a Secretary of State, oblivious to the unanimous opposition of the sector, is ploughing on with a politically motivated privatisation. She knew so little about Channel 4 that she thought it was publicly funded and had to be corrected by a Tory colleague on camera. Channel 4 costs the taxpayer nothing. The cynical motivation for the policy is simple: it is payback time; it is revenge. The Government hate “Channel 4 News” and its rigorous journalism holding Ministers to account.
The Minister mentioned a Netflix-style model, ignoring the fact that Netflix, unlike Channel 4, loses money—it is currently $15 billion in debt—and does not send war correspondents to Ukraine. Will she therefore listen to the experts, or must we wait for the Sue Gray report, the Prime Minister’s defenestration and the Secretary of State’s replacement?
Julia Lopez
I thank the hon. Member for his question. I did not suggest that Channel 4 would pursue a Netflix subscription model; I simply made the point that Netflix and others—this is not a Netflix issue alone—are changing the dynamics of the marketplace very rapidly. People now view content in very different ways and I do not think it would be a wise, sensible or responsible approach to leave PSBs untouched and unable to have the flexibility that they need to address some of those fundamental challenges.
The hon. Member made a number of unpleasant comments about the Secretary of State. She is not the first Secretary of State to have considered this question. This is not a Secretary of State-specific point of view but a question that has been live for a number of years. It was looked at previously, and the fundamental changes in the market have only deepened since that time with the move away from linear advertising and the rapid change in viewing habits. She took the responsible decision to look not just at Channel 4 but at how we ensure that public service broadcasters have the flexibility they need to be able to provide the content that we all love. She has done a sensible thing in looking at the decision afresh and dealing with it head on, and she has courage in doing so.
Madam Deputy Speaker
I call the Chair of the Digital, Culture, Media and Sport Committee, Julian Knight.
Julian Knight (Solihull) (Con)
I am concerned to hear that the media Bill White Paper will be published tomorrow, a day when we may not have an opportunity to see the full details. I hope that we will not have to rely on the media round in the morning to get those details.
On Channel 4 privatisation. I start from the position that everything should be in the private sector unless there is the strongest of cases that public ownership is absolutely essential. I therefore broadly welcome the concept of privatisation, but what assurances can the Minister give me that the privatisation is a game worth the candle? Will it be part of a redesign of public service content ensuring prominence, collaborative working of a whole new order and a continued driver of BBC reform to gradually and safely wean it off the licence fee?
Julia Lopez
First, I thank my hon. Friend for his engagement on the issue and for the work of his Committee, which the Department very much values. I was able to speak to him about the proposal previously, and I am glad that we have a meeting scheduled for later today, for which my plan had been to take him through some of the wider reforms that we wish to make in the PSB sector and offer him the assurances that he seeks. As he knows from previous conversations, the Secretary of State and I were adamant that the proposal needed to go hand in hand with a creative dividend and a wider set of reforms to make it a success.
Chris Bryant (Rhondda) (Lab)
The UK has the best broadcasting in the world by a country mile. In so many different genres—drama, comedy and natural history—we lead the world, which is remarkable considering that we are a relatively small economy compared with the rest of the world. Channel 4 is intrinsic to making all of that work because it does something that no other broadcaster in the world ever did: it guarantees diversity through the private sector for everybody. I therefore cannot understand why the Minister would want to dismantle it. Will she say just one thing to me? If she does sell it off, will she ensure that it can be owned only by people who pay taxes in this country?
Julia Lopez
I agree with the hon. Member about how fantastic our broadcasting sector is—it has unrivalled creativity—and we are seeking fundamentally to preserve that in the reforms that we are making. In this country, we are able to have a great blend of specific public service remits that private broadcasters can deliver, and that is what we would seek to do with Channel 4 going forward, protecting the things that we enjoy and love about it. We believe that any future buyer of Channel 4 would seek to purchase it precisely to tap into the specific markets that it appeals to.
Julia Lopez
I will not speculate on the nationality of any company. We will be looking at bidders who share our vision for Channel 4, the important role that it plays in investment in our creative industries and the distinct and unique remit that it has in our country. We can provide further details as the process goes on, but I will not stand here and make commitments and crowd out particular buyers for an important UK company.
Mrs Helen Grant (Maidstone and The Weald) (Con)
Channel 4 is a prized national asset that was created by Margaret Thatcher 40 years ago. It puts public service before profit and continues to be sustainable, so why are the Government failing to consider its detailed plans to address their concerns? The plans were set out very clearly in a document entitled “4: The Next Episode”, which was provided to the Government on 28 January this year.
Julia Lopez
My hon. Friend plays an important role through her work with the all-party parliamentary group for Channel 4, and I am glad for the engagement that we have already had on the issue. I am also glad that she recognised the role of the Thatcher Government in creating this special entity. As I mentioned in my statement, it was set up to spur independent production in this country, and it has done a fantastic job in that, but the world has changed fundamentally.
My hon. Friend raises the alternatives that Channel 4’s management put forward. I assure her that we gave detailed consideration to those plans and tomorrow we will provide further details in a set of documents as to why we decided that they are not the right way forward. We also have duties to the taxpayer, to the wider creative sector and to the audience. Our reforms are really to sustain Channel 4’s place in in our creative ecology.
Alison Thewliss (Glasgow Central) (SNP)
Channel 4 invests about £20 million a year in Scottish independent production companies, contributing £36 million in gross value added and supporting about 400 jobs. I am proud that it has a hub in my constituency. Glasgow-based indies do get contracts with Netflix and the others, but they are clear that the Channel 4 model is at the heart of their success. Why would the Minister put all that at risk with privatisation?
Julia Lopez
We do not think we are putting it at risk. There are a number of things we can do via the PSB remit on quotas for independent production and we would seek to maintain those. We will be bringing forward a series of reforms that we hope, ultimately, will grow the sector over the period of time we are talking, such that all independent producers will benefit.
Jeremy Wright (Kenilworth and Southam) (Con)
My hon. Friend was right, of course, to say that previous Secretaries of State have considered the privatisation of Channel 4, but she will also recognise that not all of us were persuaded at the time that it was the right thing to do. If the Government are determined to privatise Channel 4, she will also recognise, I am sure, that one of the things that makes Channel 4 distinctive is its willingness to take risks and commission work it cannot be sure will be successful. By doing so, it encourages creatives in the sector to take risks themselves. That is good for the sector and good for our broadcasting. Can she reassure me that if privatisation proceeds, the Department will be particularly focused on making sure that that provision is retained in the broadcasting landscape?
Julia Lopez
I thank my right hon. and learned Friend for his question. In recognition of what he says, the reason that previous Secretaries of State looked at this matter was that they could see a number of trends, particularly on spend on linear advertising, that were only going in the wrong direction for a broadcaster like Channel 4, which is uniquely dependent on that spend. Something like 70% of its revenues come from linear advertising spend. I think he would recognise the speed of change in the sector and the fundamental changes in viewing habits, particularly among younger audiences. We think it is responsible for any Government to be very cognisant of that. He will be aware that a number of things can be done in terms of remit and how we engineer the sale to ensure that what is unique, distinct and valued about Channel 4 can be maintained and protected going forward.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I feel a bit sorry for the Minister, because the Secretary of State is not here. We all know what the game is: this shabby little bunch in No. 10 are determined to undermine public service broadcasting in our country. As she said, this is part of a wider attack on the BBC and all public service broadcasting in the week when the forces of darkness, in the shape of the richest man in the world, have gobbled up Twitter. The fact of the matter is that if we do not stand firm—[Interruption.] The Whip is either having a bad attack or he has indigestion, but this is not funny. For a party and a Government who believe in levelling up, this will do great damage to Leeds and the creative industries in the north of England. The forces of darkness are on the rampage. Channel 4 will be gobbled up in no time by someone like the richest man in the world.
Julia Lopez
I am desperately grateful for the hon. Gentleman’s sympathy and I am sure I will need it going forward. I would just simply say that the reforms we seek to make are about the fundamental sustainability of the public service broadcasting system. If the Opposition wish to bury their heads in the sand and pretend that those fundamental changes are not happening, then that is for them to worry about. We are making a series of fundamental reforms. As I say, the legislation was last looked at in 2003. This Secretary of State is looking fundamentally at this area to make sure that we are serving audiences, the taxpayer and the wider creative sector. I commend her for having the courage to make those changes.
Damian Green (Ashford) (Con)
My hon. Friend is aware of my profound scepticism about the wisdom of the action the Government are taking on this matter. I keep reading that the Prime Minister wants Departments to do Conservative things. May I therefore urge on the Minister the very Conservative action of listening to the voice of small business—the many small businesses and creative companies—that Members from all sides of the House are praising because they provide innovation, creativity and jobs around the country, precisely serving the levelling-up agenda? Can she tell us, having looked at the consultation responses the Government have not published, what is the overwhelming voice from those small businesses? They are all saying that Channel 4 is not broke and does not need fixing in this way. They are urging the Government not to go down this route.
Julia Lopez
I thank my right hon. Friend for his engagement already on this issue and I appreciate the conversations we have had. We will publish the consultation responses tomorrow. As I said, we have a whole package of information that hon. Members will no doubt scrutinise and hold us to account for, but I hope that they will also welcome it, because this is a series of important reforms. This is fundamentally about growing and sustaining our fantastic creative sector to the benefit not only of audiences but of the small businesses he cites. One thing we are keen to secure is a creative dividend to deal with the challenges that companies are actually talking to me about, which are the skills required for the booming production sector we have in this country.
Naz Shah (Bradford West) (Lab)
Ampere Analysis says that privatisation would put independent production companies out of business. As the Member of Parliament for Bradford West, Channel 4 in Leeds makes a real difference to diversity, especially in news channels and in journalism as a whole. Can the Minister assure me that if we go down that road and they privatise it, the buyer will be required to maintain the presence and trajectory of workforce growth in Channel 4’s regional offices in Leeds, Glasgow, Bristol and Manchester?
Julia Lopez
The hon. Lady is right to highlight the great investment that Channel 4 has made in Leeds, which was actually at the encouragement of previous Secretaries of State when we previously looked at the question of privatisation. In our relationship with Channel 4, we have encouraged it to seek to increase what it does in the regions and nations of our country, and we think it has done a great job of that. We value the contribution it has made to regions and cities, and we will very much seek to preserve that in any sale process.
Stephen Hammond (Wimbledon) (Con)
Channel 4 has been a driver of the independent sector. As the Minister knows, the independent sector trade body is raising considerable concerns about the impact of privatisation on the sector. Will she tell the House whether she intends to retain, in the privatisation details, an obligation and a quota for the independent private sector?
Julia Lopez
I thank my hon. Friend for raising the important point that we can get a number of our aims in relation to independent production via quotas in the public service broadcasting remit. We will be seeking to do that. We will provide further details as the process goes on, but I hope that when we are able to publish the White Paper tomorrow he will see that we will seek to retain and modernise the approach we take to independent production such that the companies he is concerned about will be able to benefit.
Ian Paisley (North Antrim) (DUP)
The small businesses in the creative sector in Northern Ireland have revolutionised television production in Northern Ireland beyond recognition. No one would have thought that a film about four or five wee girls growing up in the maiden city in Northern Ireland would have been such a dramatic success in every single aspect. That would not have happened without Channel 4. That is the reality. There are 81 jobs in Northern Ireland supported directly by Channel 4. It contributes £8 million annually to Northern Ireland’s GVA. Over a quarter of £1 billion is contributed to Northern Ireland as a result of television and film making. Nine television dramas and six major films were made last year in Northern Ireland. What will the Minister do to ensure that the production fund and the independent fund, which have supported jobs, production and apprenticeships in companies such as Waddell Media, Stellify Media, Strident Media and Fired Up Films, will be protected going forward?
Julia Lopez
I am glad to hear the hon. Gentleman remind the House of the thriving creative sector in Northern Ireland, and the tremendous programmes and content that have come out of the place that he represents. That is something we all celebrate. We think that any future buyer would look at the unique and distinct content that Channel 4 provides as one of its great assets. We are able to protect some of that via the remit, which we would seek to do, but it is also important that Channel 4 is only one part of why the creative sector has been very successful in Northern Ireland. I commend him and his constituents for the contribution they have made to that success.
Andy Carter (Warrington South) (Con)
I agree with the Minister that there have been massive changes to the broadcasting sector, in particular in TV advertising and particularly for linear TV. It is right that we do not leave PSBs in aspic, but will she confirm that there will be an ongoing commitment in PSBs for prime time news? It is important that we have a diversity of voices in news. Will there be that commitment to prime time news for Channel 4 under a new ownership model?
Julia Lopez
It is frustrating that I cannot set this entire question within the wider context of the reforms that we seek to make. Public service broadcasting is valued by the Government precisely because it provides the kind of content in which a lot of commercial operators are not necessarily inclined to invest. The challenge is to want to make channels continue to be PSBs. The reforms that we are introducing will provide people with a number of advantages in being public service broadcasters that we hope will mean that the important democratic content, which we all value, is retained in the future broadcasting system. I hope that that reassures my hon. Friend and I am happy to continue to engage with him during the process, because he is a champion for the sector and has a number of important views that need to be considered.
Rachel Hopkins (Luton South) (Lab)
Under private ownership, Channel 4’s output will be dictated by profit rather than public service, and I share the concerns about creative risk taking and the impact on diversity when commissioning content—would we see “Derry Girls”, “The Last Leg” and Mo Gilligan? Does the Minister agree that private ownership will dilute, rather than enrich, broadcasters’ programming?
Julia Lopez
There is a fundamental misunderstanding that private ownership and being a public service broadcaster are at odds with each other. The whole point of what we are trying to achieve is to get capital investment and have a distinct public service broadcasting remit. We hope that that blend will sustain Channel 4 long into the future. It is important that those who are not in favour of privatisation answer some of the fundamental questions about the long-term trends that concern us as a Government.
Jason McCartney (Colne Valley) (Con)
How do the proposals genuinely fit in with our levelling-up agenda? What protections and safeguards would be put in place to ensure that Channel 4’s HQ not only stays in Leeds, but continues to flourish there? What safeguards can be put on Channel 4’s excellent commitment to quality regional TV production so that it can continue to flourish, particularly because Channel 4 currently invests more in independent production companies outside London than any other broadcaster and supports thousands of jobs outside London?
Julia Lopez
I know that my hon. Friend is concerned about Yorkshire and the importance of ensuring that creative businesses there thrive. We share that fundamental aim. As I mentioned to my hon. Friend the Member for Warrington South (Andy Carter), the key thing is that we need broadcasters to wish to retain their public service broadcasting remit, because it includes our ability to impose quotas on production spend, including outside London. My hon. Friend the Member for Colne Valley (Jason McCartney) will know that his area has benefited substantially from that. We are seeking to stitch those kinds of commitments into not only the PSB remit, but the sale process, so that our aims on levelling up align with any future owners’ aims on levelling up.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Shall we just remind ourselves of what things were like in the past? When I was growing up, there was an awful lot of pretty mediocre stuff on the box from across the pond, such as “The Lucy Show”, “Lost in Space” or “Batman”. As the hon. Member for Rhondda (Chris Bryant) said, however, we have had a cultural renaissance since then. Today, we have a British broadcasting product that is the envy of the world. Let us remember that, for the United Kingdom, that equals soft power, which is very important in these dark days. I have a straightforward economic question for the Minister. A new owner will want to make a profit and they will take money out. How will that possibly not impact on the money that would otherwise be spent in genuine local production companies the length and breadth of the United Kingdom, including in Scotland?
Julia Lopez
I always enjoy engaging with the hon. Gentleman. The Government do not see “profit” as a dirty word; profit is key to creating investment in the companies and kinds of content that he is concerned about. He is right to celebrate Channel 4. We celebrate it and all the fantastic content that it brings, but this is about maintaining and increasing spend on content. That is why we will have a series of reforms in tomorrow’s broadcasting White Paper that I hope will reassure him of our intentions as a Government to have a sustainable PSB sector. I go back to the point that, through the PSB system, we get commitments in the remit to the kind of news content that he is absolutely right to highlight as incredibly important to our soft power.
Alun Cairns (Vale of Glamorgan) (Con)
Channel 4 spent £516 million on original content in 2006. That number fell to £329 million because advertising incomes fell at a similar pace. Does my hon. Friend agree that unless we do something, Channel 4 is at risk of stagnating, and that we can keep a similar news remit, commitment to diversity and investment in nations and regions in a different model?
Julia Lopez
I agree about the fundamental trends that my right hon. Friend highlights, and about some of his concerns. Channel 4 has fundamentally accepted those concerns in providing us with a range of alternative options, which we have looked at very carefully. We believe that the route we are highlighting is right because, through that, we will have a more sustainable public service broadcasting system, and we will be able to maintain the content and our commitments to some of the less commercially viable programming that audiences very much value.
Grahame Morris (Easington) (Lab)
During the previous statement, the Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster), told the House that it was difficult to predict the huge surge in the demand for passports once the lockdown restrictions had been lifted. Surely, however, it was possible to predict that over the lockdown period, the demand for Netflix subscriptions would increase dramatically because people did not have any alternative. It is surely also completely predictable that now that those restrictions are lifted, the demand for Netflix subscriptions will decline. That is reflected in subscriptions and share prices. Given the cost of living crisis, why push ahead with forcing a successful, publicly owned Channel 4 to adopt a privately financed model when subscriptions are becoming a luxury that many people and families simply cannot afford?
Julia Lopez
The hon. Gentleman needs to understand that we are not seeking to have a subscription model for Channel 4. On the issues that we have highlighted relating to Netflix, there are trends that predate the pandemic, involving younger audiences, certainly, moving away from linear television and the decline in linear television advertising. The Government think that addressing all those things is incredibly important, because our public service broadcasters produce a whole range of free-to-air products that we want to maintain as free-to-air products. The range of reforms that we will introduce tomorrow are about the sustainability of the whole PSB sector. I hope that that reassures him that his constituents will continue to get high-quality British content long into the future.
Dr Neil Hudson (Penrith and The Border) (Con)
Up and down the country, public service broadcasters, such as Channel 4, the BBC and ITV, are treasured national assets, delivering vital news, education, entertainment and sport. In rural areas such as mine, people depend on free-to-air terrestrial TV, especially in areas with poor internet coverage. I know that the Government are working on that, and my hon. Friend is working with me to help to improve that situation in rural Cumbria, but please, please can I urge the Government to rethink this Channel 4 privatisation idea? Now is the time to support and bolster our public service broadcasters, not challenge them or lead them to being a competitive, subscription-based service, which is the last thing that our rural communities need.
Julia Lopez
I thank my hon. Friend for all his work on connectivity in his constituency. I am pleased to say that Cumbria is one of our priority procurements for gigabit roll-out and I look forward to working with him on that. I simply refer him to my previous answers: we would maintain Channel 4 as a free-to-air service. We are not looking for a subscription model. Everything that we are doing seeks to bolster the public service broadcasting sector. I hope that when he sees the context in which this decision has been made, he will feel reassured.
Ben Lake (Ceredigion) (PC)
Diolch, Madam Deputy Speaker. I echo concerns that others have raised that the privatisation of Channel 4 might jeopardise its investment in communities across the UK as part of its public service remit, and its quotas relating to commissioning content in each nation of the United Kingdom. That investment has amounted to more than £77 million in Wales in the past 10 years, and supported over 200 jobs in 2019 alone. Will the Minister elaborate on how the Government will seek to ensure that that valuable contribution continues, even if privatisation proceeds?
Julia Lopez
I appreciate the hon. Gentleman’s comments about the importance of creative investment in his region. I cannot be too detailed at the moment, because the White Paper is coming out tomorrow, but I hope that he will have taken heart from my comments about how we can put quotas in the public service broadcasting remit to ensure a certain level of non-London production spend and investment in our regions and nations.
Simon Jupp (East Devon) (Con)
Independent production companies across our nations and regions rely on Channel 4’s current operating model. Channel 4 is an important public service broadcaster, but that does not mean that it has to be owned by the Government. Will my hon. Friend explain how levels of independent production can be protected as the channel is sold?
Julia Lopez
In having a more sustainable public service broadcasting system, we seek to not only maintain investment and content production, but expand them. If we did not make the series of reforms that we seek to, we would be concerned about the withering of something that we believe audiences and the creative economy cherish. When we are able to provide further details, I hope that my hon. Friend will be reassured by some of the things that we hope to do in this field.
Mike Amesbury (Weaver Vale) (Lab)
This is not levelling up, is it, Minister? It is levelling down. It is closing down independent producers, largely in the north of England. For the supply chain, it will mean laying off up to 2,000 workers. Look, cut the ideological rubbish and think again. Make your mark as a Minister and put this in the bin.
Julia Lopez
I am not sure that I wish to thank the hon. Gentleman for his slightly demeaning approach. I do not think that I have been particularly ideological in anything that I have said today; I have been clear that the reforms we seek to make are about the sustainability of the public service broadcasting sector that I value, he values, this House values and—most importantly—audiences value. We need to make sure that the PSB sector is sustainable. The Opposition can bury their head in the sand when it comes to current trends, but fundamentally, the reforms that we are bringing forward tomorrow aim to ensure that the things that the nation values culturally, democratically and economically are taken forward in tomorrow’s broadcasting system.
Madam Deputy Speaker (Dame Rosie Winterton)
The hon. Member for Weaver Vale (Mike Amesbury) knows that he should not address the Minister directly like that.
Rob Butler (Aylesbury) (Con)
Having worked as a news presenter both at the BBC and at Channel Five, my feeling is categorically that the commitment to high-quality journalism is just as strong in the private sector as in the public sector. Rightly, much has been made of the calibre of some of Channel 4’s programming, but tonight’s schedule includes “The Great Home Transformation”, “Grand Designs: The Streets”, “Bling Ring: Hollywood Heist” and “Shocking Emergency Calls UK”. I assume that the Minister might agree that those programmes could just as easily be produced by a private sector owner.
Julia Lopez
I very much enjoyed my hon. Friend’s contribution to the reception celebrating 25 years of Channel Five. The channel has made some very interesting news investments recently; it has taken up top-quality presenters and has really invested in its news content. That proves that private sector investment in our broadcasters can mean higher-quality content that is more attuned to what audiences of the 21st century want. I welcome the interest of any company that wants to do to Channel 4 what has happened to Channel Five, with the high-quality programming that it provides.
Matt Western (Warwick and Leamington) (Lab)
I may have my facts wrong, but as I understand it, Channel 4 is phenomenally successful. Its subscription service levels are something like a third higher than Netflix’s in the UK, and All 4 is the largest subscription service in this country. Channel 4 does not cost the taxpayer anything, yet it generates £1 billion per year for the UK economy. Other than the scrutiny of Government, what is not to like?
Julia Lopez
The Government are thinking carefully about the fundamental sustainability and future of the Channel 4 model. The hon. Gentleman may be aware of two key points about Channel 4: it does not retain ownership of its intellectual property, and any borrowing it does sits on the public balance sheet. Given its dependence on linear advertising, we have concerns, looking at viewer trends, that that model will be difficult to sustain if Channel 4 is to continue to make the investment in content that I think we all want. We are therefore looking afresh at what Channel 4 needs, not only to sustain itself, but to grow. I hope that what we bring forward will help the hon. Gentleman to understand how this reform sits within a wider set of reforms to sustain our public service broadcasters.
Brendan Clarke-Smith (Bassetlaw) (Con)
We have seen some excellent examples of public service broadcasting. I grew up not too far from the Central Independent Television studios in Nottingham and have been a fan of Channel 4 over the years, particularly “Fifteen to One”, “Football Italia”, and my favourite, “The Crystal Maze”. I am not too sure which zone the Opposition are in today, but does the Minister agree that this deal not only makes really good financial sense for the Government, but allows the purchasers of Channel 4 to raise capital to produce even more of the independent programming that we all value?
Julia Lopez
I very much welcome the opportunity to talk in this House about “The Crystal Maze” and the fantastic content that Channel 4 has produced over the years. Our reforms are fundamentally about making sure that Channel 4 can continue to make the investments that my hon. Friend and I both want in that kind of unique, fun and distinctive programming.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
All 4 is the UK’s largest free-of-charge streaming service, providing entertainment and educational programming across the UK, without regard to users’ income, which is particularly important in this economic crisis. How can the Government believe that removing that service will benefit low-income families?
Julia Lopez
I thank the hon. Lady for her question and her concern, but I do not think that anything we seek to do in relation to Channel 4 would deprive low-income families of free-to-air content on it. Channel 4 has made really great strides in the digital space. We think that that will be attractive to any future buyer, and that any future buyer would seek not only to sustain that, but expand it.
Jim Shannon (Strangford) (DUP)
I am convinced that the Minister believes in the importance of maintaining an impartial media. At a time when the phrase “fake news” has risen to prominence, that is vital. Furthermore, it is critical for the Minister to state that the integrity of independent journalism is a priority, and that the Government are at pains to maintain it. Can she confirm that for Hansard, please?
Julia Lopez
I always welcome the hon. Gentleman’s comments and his perspective from Strangford. As I hope I have reassured him through my comments today, this is about the fundamental sustainability of the public service broadcasting sector. If channels wish to remain PSBs, they will still take on the obligations that the Government place on them through their remit, which can, importantly, include the production of impartial news content. I hope that the reforms that we bring forward will assure him that such remits will be taken forward and sustained, so that we have high-quality, important journalism going forward.
Points of Order
Julia Lopez Excerpts(2 years, 7 months ago)
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Madam Deputy Speaker
I thank the hon. Lady for that point of order. My understanding, from what the Minister said, was that there had been a plan to make a statement tomorrow to coincide with the publishing of the White Paper. Obviously, if tomorrow is a sitting day, it is possible to have urgent questions or statements. Does the Minister want to add anything to that?
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
Further to that point of order, Madam Deputy Speaker. I was advised by my officials that we had put in for a statement tomorrow.
Julia Lopez
We are awaiting confirmation of whether it will be written or oral. We put in notice of our intention to publish the White Paper tomorrow, and are waiting to hear whether there will be a written or oral statement.
Madam Deputy Speaker
It will be possible to make an oral statement tomorrow, should the Minister wish to, and for there to be an urgent question then, if tomorrow ends up being a sitting day. There are a number of imponderables, but I hope that that explains the various options available. I call the Father of the House.
Oral Answers to Questions
Julia Lopez Excerpts(2 years, 8 months ago)
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Fay Jones (Brecon and Radnorshire) (Con)
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
The Government are working hard to give people great connectivity whether they live in a rural, suburban or urban area. We are doing this by: making it easier for operators to roll out infrastructure; focusing public subsidy on connecting the hardest-to-reach areas through Project Gigabit; connecting schools and public buildings through our GigaHubs programme; and working with commercial partners on the shared rural network to tackle mobile notspots.
Selaine Saxby
I am sure my hon. Friend will be delighted that I am asking not about broadband but about mobile connectivity instead. I live in the beautiful village of Instow in North Devon, but my mobile signal is so poor that if I move my head when making a call I am instantly disconnected. To have 5G is a dream, yet we have more anti-5G campaigners in North Devon than in almost any other part of the country. What is my hon. Friend doing to improve mobile connectivity in villages such as mine, alongside dealing with the false information perpetuated by anti-5G campaigners?
Julia Lopez
My hon. Friend is absolutely right: I am absolutely thrilled and delighted that she is asking me about mobile rather than broadband. She raises a really important point about misinformation and how it can stifle the roll-out of fast, reliable networks, which can substitute for poor broadband in areas like hers. I spoke recently at a conference with local councils on how to support the 5G roll-out. My Department shared with them public health guidance to bust and counter some of the myths about 5G. On mobile connectivity more generally, as I mentioned, we have the shared rural network that will see us jointly invest with industry more than £1 billion to increase 4G coverage in rural areas. In her region, that will see all four operators cover 87% of her constituency by the end of the programme.
Fay Jones
I am asking about broadband, once again. My constituents are extremely concerned that the universal service obligation, which aims to provide decent broadband coverage, is inconsistent in rural areas. Constituents in Knighton have expressed their concern about some of the contribution costs, which can be in the tens of thousands of pounds, despite some properties being only a few hundred metres away from the cabinet. What steps is the Department taking to ensure that decent and, above all, affordable broadband is being rolled out to rural areas? Will the Minister meet me to discuss some of the thornier elements of my constituency?
Julia Lopez
I would be happy to meet my hon. Friend. I appreciate her concern about the costs that have been quoted to her constituents, and it is an issue to which the regulator Ofcom is very alive. Ofcom holds responsibility for setting the universal service conditions, and it recently carried out an investigation into BT’s approach to calculating excess cost. BT has since provided assurances on what it will do to mitigate the consumer harm identified in the Ofcom report. Compliance with that report will be monitored, but as I say, I am happy to meet my hon. Friend to discuss the issue in greater detail.
Jim Shannon (Strangford) (DUP)
There have been giant steps forward, which we welcome, but people in some areas of my rural constituency still have difficulty getting a connection, and they cannot use their mobile phones either. What discussions has the Minister had with the Northern Ireland Assembly on working together to address those small pockets that are easy to overlook but whose residents deserve the same level of service as those in the cities?
Julia Lopez
I thank the hon. Gentleman for championing his constituency, as always. Just this week I spoke to one of his DUP colleagues about some of the great work going on with Fibrus, which is making Northern Ireland one of the best connected areas of our country and with the fastest speeds. Of course there is still more work to do. I was going to meet one of the hon. Gentleman’s counterparts in the Northern Ireland Assembly to discuss the issue, but unfortunately he came down with covid. I shall follow up and arrange that meeting again.
Rob Butler (Aylesbury) (Con)
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
I wrote to Baroness Vere of Norbiton, my counterpart at the Department for Transport, in February to discuss plans for supporting domestic tours through the implementation of the dual registration proposals. I am pleased to say that those are being taken forward and should come into force later this year. My Department and the Department for Transport continue to work closely with industry to understand the needs of the specialist events haulage sector.
Kerry McCarthy
I thank the Minister for that response; I am glad that the Government are finally talking about this issue, which has been flagged up as a problem for a very long time, but “later this year” will not be good enough for bands wanting to tour the UK this summer. Harvey Goldsmith has said that there are not enough trucks and not enough drivers, and that we need a solution now. What is the Minister’s answer?
Julia Lopez
That is not the message that I have heard, but I will be meeting UK Music representatives on Monday; if they share the concerns that the hon. Lady has just expressed, I will be happy to discuss those with them. The Secretary of State and I continue to do a lot of work with ministerial counterparts in other countries and across the Government on this issue. We are alive to the sector’s concerns.
Barbara Keeley (Worsley and Eccles South) (Lab)
In an astonishing admission, Lord Frost, the Government’s former Brexit negotiator, recently said of musicians touring to the EU:
“There is a whole set of problems here that is making life difficult on both sides”.
Big problems include the road haulage limits, which mean that UK-based vehicles cannot make more than two laden stops in the EU, which adds a £30,000 cost to each tour. Cabotage limits can add up to £16,000 a day. Those are substantial burdens, and most tours of UK orchestras are to Europe: such tours represent 12% of their earned income. Lord Frost now believes that the Government should change and move to a more pragmatic position to ease touring. Does the Minister agree?
Julia Lopez
I thank the hon. Lady for her interest in this issue. The Department for Digital, Culture, Media and Sport is not responsible for the overall negotiating position, but as I say we have been in close discussions with other Departments. We have made progress on some of the specific issues raised with us, such as splitter vans, and we have also provided a lot of support to the wider events sector. We have made sure that carnets will not be required and we have been doing a whole bunch of other stuff.
As I said, I am meeting UK Music representatives on Monday to discuss the remaining outstanding issues, but we have also had a number of conversations with EU member states. In the vast majority of those, people no longer require permits or visas to carry out this kind of work.
Jack Lopresti (Filton and Bradley Stoke) (Con)
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
I am delighted to report that 88% of premises in my hon. Friend’s constituency can access gigabit-capable broadband, which is above the national average. Across the UK, it is two thirds. We are on track to deliver more, and we will begin procurement in 2023 to mop up the bits of his constituency that are not covered by the commercial roll-out.
Tony Lloyd (Rochdale) (Lab)
Mr Virendra Sharma (Ealing, Southall) (Lab)
Julia Lopez
As I said, I will be meeting UK Music and I am happy to discuss this matter with it. We have provided a huge amount of support to the live music industry throughout the pandemic, including a really successful reinsurance scheme, but I am happy to take the hon. Gentleman’s points away.
Andrew Jones (Harrogate and Knaresborough) (Con)
People are turning to the internet for advice on the cost of living, and we are also seeing how fake ads claiming to be from people such as Martin Lewis are used by fraudsters. So will the Secretary of State look at compelling online platforms to verify advertisements that exploit the trust and expertise that high-profile people have built?
Christian Matheson (City of Chester) (Lab)
Julia Lopez
I have addressed this in a number of ways earlier today. As I say, I am meeting UK Music. We have done a number of things with Departments and with counterparts in other countries to reduce the barriers for touring musicians, and we will continue to carry out that work.
Product Security and Telecommunications Infrastructure Bill (Fifth sitting)
Julia Lopez ExcerptsTuesday 22nd March 2022
(2 years, 8 months ago)
Public Bill CommitteesRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 22 March 2022 - (22 Mar 2022)
Chris Elmore (Ogmore) (Lab)
I beg to move, That the clause be read a Second time.
Good morning to you, Ms Nokes, and to all members of the Committee.
The new clause is self-explanatory, but I will speak to it in the hope of persuading colleagues of its considerable merits. It would require operators with agreements under the code that are not subsisting agreements—agreements that came into force before the code was agreed—to provide written notice to site providers that are an emergency service before the beginning of the period of 21 days, ending on the day that the operator begins upgrading the apparatus.
This uncontroversial new clause would simply mandate operators to give advance notice to sites that provide and deliver emergency services, such as hospitals, for example. Due to the sensitive and life-saving nature of the work that is carried out daily in those buildings, it would make sense for providers of emergency services to be given advance notice of when work is going to be undertaken, in the hope that work will then be able to go ahead as smoothly as possible. The new clause would reduce the delay and interference for both the site owner and the operator.
Under this Government, broadband roll-out targets have been reduced time and again—from full fibre to full gigabit, and now down to 85% gigabit. The new clause would speed up the roll-out of telecommunications infrastructure, which the country needs. We hope that this constructive new clause will have cross-party support, and I urge Members on both sides of the Committee, including the Minister, to support it.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
I thank the hon. Gentleman for tabling the new clause, which relates to the automatic rights for operators to upgrade and share existing apparatus. To be clear, those rights are already contained in the code, and apply only to agreements completed after the 2017 reforms to the code came into force. The new clause suggests the introduction of a 21-day notice requirement for operators that want to exercise these rights where apparatus is situated on land owned by an emergency service provider.
I very much appreciate the intention behind the new clause, and am grateful to the hon. Gentleman for briefly sharing with me last week some of the instances that he has in mind. Of course, it is important that emergency service providers are aware of work on their sites that may have an impact on their daily activities; I am sympathetic and alive to that. I have tested the issue with officials in the last week, and they suggest that in that context, it is crucial to look at the scope of the paragraph 17 rights, which authorise only activity that will have no more than a minimal adverse impact on the appearance of the apparatus and will impose no additional burden on the other party to the agreement. Clearly, the rights are therefore available only in very limited circumstances.
Of course, operators may need to upgrade and share apparatus that will have a greater impact on a site provider than paragraph 17 permits, and they should be able to do so, but in those circumstances they must obtain the site provider’s agreement or seek to have the required rights imposed by the courts. In contrast, the automatic rights in paragraph 17 are available only in very limited circumstances. The conditions in paragraph 17 specifically exclude activities that would impose an additional burden on a site provider. Activities that disrupted a site provider’s daily business, or created new health and safety risks, would be very unlikely to satisfy that requirement.
Operators that upgrade or share their apparatus in ways that go beyond the paragraph 17 rights, and which do not have a site provider’s permission or court authorisation, will be acting outside the parameters of the code. As such, they may be liable to any legal remedies or sanctions that are applicable to their actions. If an operator is in doubt as to whether the paragraph 17 conditions are satisfied, it would be sensible for it to discuss the planned works with the site provider. I am not aware of any instances in which an operator has relied on its paragraph 17 rights to carry out upgrading and sharing activities that have gone beyond the scope of what that paragraph allows, but if the hon. Gentleman is aware of occasions when that has happened, I would welcome further details and information about them.
At present, we think that the scope of activities permitted by paragraph 17 is so narrow that a specific notice regime is not required. Putting one in place would undermine the policy intention of the rights, which is to enable limited upgrading and sharing works to be carried out as quickly and efficiently as possible. I therefore hope that the hon. Gentleman will withdraw the new clause.
Chris Elmore
In the light of what the Minister has said and, crucially, her offer to hear the examples that I will provide her with, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 2
Review of the changes to the Electronic Communications code
“(1) The Secretary of State must conduct a full economic review of the effect of Schedule 1 of the Digital Economy Act 2017 (The Electronic Communications Code).
(2) The Secretary of State must prepare and publish a report on this review within two months of the passage of this Act and must lay a copy of the report before Parliament.”—(Chris Elmore.)
This new clause would require the Secretary of State to outline the economic impact of the 2017 introduction of the Electronic Communications Code.
Brought up, and read the First time.
Chris Elmore
I beg to move, That the clause be read a Second time.
This new clause would require the Secretary of State to conduct a full economic review of the effect of the electronic communications code since 2017, and to publish a report on that review’s findings. When the code was introduced in 2017, the Government promised that they would publish a review of its impact by 2022, but I am afraid to say that we are still waiting. The Committee should note that this is not a new request; we are merely holding the Government to account on promises that were made in 2017.
The review should look into issues including, but not limited to, the impact of the legislation on investment into mobile networks, the number of new sites provided, the speed of infrastructure deployment, changes in rent to site providers, and the total legal costs that have been borne by the judiciary as a result of litigation. The Department’s vague responses to parliamentary questions show that it is unsure of how much money has been saved by rent reductions since 2017. That suggests, in turn, that the Department is also unaware of how much of that money has been reinvested back into the development of telecommunications infrastructure, which was the express purpose of the legislation.
The impact assessment for the previous legislation is clearly overdue, and the testimonies that we heard on Tuesday last week suggested that a review needs to take place sooner rather than later. The Minister was keen to suggest that only a small number of rent reductions were of more than 90%, but testimonies from witnesses last Tuesday suggested otherwise. The Minister also said that the number of legal cases was decreasing, but there have been over 300 since the introduction of the code, compared with just a handful prior to its introduction. Once again, we are hearing mixed messages from the Government while the message from those on the ground who have been adversely affected by the rent reductions is crystal clear.
The simple truth is that we are currently unable to make a clear and objective assessment of the effectiveness of the electronic communications code because its impact has not been reviewed. A review was promised, as I will continue to reiterate, when the legislation was first introduced; I accept that it was not this Minister who made that commitment, but it was this Government. Such a review would give us a better understanding of where we were in 2017, of where we are now in 2022, and of what we need to do to improve the situation in the future, as we increase our reliance on digital connectivity.
Technological progress and innovation will define the success of the United Kingdom in the 21st century, and any progress will be underpinned by how quickly and effectively we are able to roll out digital infrastructure projects such as 5G and gigabit-capable broadband. It is firmly in the national interest to get a better understanding of whether the changes we have made so far have been effective, and what lessons can be learned to ensure that our country thrives in the technological and digital spheres in the years ahead.
For the reasons that I have outlined, I hope that colleagues on both sides of the Committee will support the new clause and ensure simply that the Government are held to account on commitments made when the 2017 code was published.
Julia Lopez
I thank the hon. Gentleman for tabling the new clause and, again, I appreciate the intention behind it. It would require the Government to carry out a review of the 2017 legislation that updated the electronic communications code, which is the overarching legislation that the Bill amends and that we have been discussing in Committee.
I appreciate that the intention behind the new clause is to better understand the impact of the 2017 changes to the code but, unfortunately, such a review clause would have unintended consequences. We are particularly concerned that there might be a chilling effect on the market while the review is carried out, which would lead to delays not just in implementing the measures in the Bill, but in wider deployment. When the 2017 code came into force with reduced rents, a lot of cases went through the courts because operators were still on higher rents as long as negotiations were ongoing. We do not want to see a similar challenge in this case.
If a review takes place, stakeholders will likely delay entering into agreements to enable the deployment of infrastructure. Only when the review has concluded and it is clear whether further changes are to be made to the code will parties be prepared to make investment or financial commitments. That will have a profound effect on our connectivity ambitions, despite our desire to move as quickly as possible to level up the country with world-leading connectivity. It will also have an adverse impact on consumers and businesses, many of whom want to access higher speeds and the latest technologies such as 5G.
The Bill focuses on a few issues that prevented the 2017 changes from having their full impact, such as speeding up deployment while protecting the rights of landowners and site providers. Wider changes to the code will halt all progress made and will risk bringing deployment to a standstill. That would leave many homes and communities without the upgrades to connectivity that they badly need, which I am sure the hon. Member will agree would not be the desired outcome.
Let me clarify what was said in 2017 about reviewing the changes to the code. In the impact assessment that accompanied the reforms, the Government said that they would review the policy by June 2022. They did not say that they would carry out a full economic review of the impact of the reforms on the rental agreements. We have reviewed the policy. Officials have held regular meetings with stakeholders since the 2017 reforms came into force, including facilitating workshops between stakeholders to encourage more collaborative working. My predecessor, my right hon. Friend the Member for Maldon (Mr Whittingdale), held a series of roundtable meetings with stakeholders from both the operator and the site provider communities so that he could understand the situation better.
Since I have been in post, I have been testing some of the concerns of the hon. Member for Ogmore in Parliament to ensure that we are beyond some of the initial challenges that we all accept existed when the code changes were made. Regular engagement and the issues highlighted directly informed last year’s consultation, which preceded this Bill, and led to the provisions in the Bill that are needed to realise the benefits of the 2017 reforms. I hope that this gives the hon. Member reassurance that we have reviewed the policy as a whole, and I ask that he withdraw his amendment.
Chris Elmore
I have listened to the Minister and I accept that there are challenges with any review, but the only way in which we learn is by reviewing what we have done previously. There are some nicks in the system that are still not rectified. There is no reason why a Government review would mean that the industry would need to stop rolling out fibre broadband, improving broadband more generally, 5G roll-out or anything else. The process could be done with industry to ensure there is an efficient and effective way of reviewing, so that we can learn from what has happened and improve moving forward. I am keen to push the new clause to a vote.
Question put, That the clause be read a Second time.
Chris Elmore
I beg to move, That the clause be read a Second time.
During the oral evidence session last Tuesday, we heard a number of concerns about part 1 of the Bill, which were outlined particularly eloquently by Madeline Carr, professor of global politics and cyber-security at University College London, who tellingly stated that she does not currently own an Alexa due to a lack of trust, and that the Bill as it currently stands would not give her sufficient confidence to go out and purchase one. Her Majesty’s Opposition value the contribution and knowledge of experts such as Professor Carr, and we have tabled new clause 4 on that basis.
The clause would require the Secretary of State to undertake a consultation on the imposition of a minimum period during which relevant connectable products would need to receive security updates. That would allow the Secretary of State to consult with academics such as Professor Carr, among others in the field, to establish the best way of making those connectable products, which have the potential to bring huge benefits to our lives, as safe as possible for as long as possible.
I presume the Minister might retort by saying that increased regulation of this sphere might stifle innovation, but that is exactly the opposite of what we heard last Tuesday. What we heard was that without strong, strategic Government intervention, there is not much desire for, or a market for, cyber-security. That is why introducing a minimum period for which connectable products would be subject to security requirements is so important: without Government intervention, increased security for British consumers will not come about.
Another reason that implementation of the new clause is so vital is that it relates to the digital divide and the ability of those who are the most financially vulnerable to have access to secure products. We do not want the less well off to be purchasing items that are subject to security updates for a much shorter period, thus making them more vulnerable to cyber-attacks than those who are more financially secure. I raised that issue on Second Reading and, dare I say it, there was some pushback from Members in the Chamber, but the issue was highlighted by Professor Carr and David Rogers, who was the lead editor during the process that is the basis for the Bill.
The party that I am deeply proud to represent was founded to represent the interests of working people, and it is ultimately my responsibility to ensure that working people across the country do not lose out with respect to the pace of technological change and as the threats facing that technology continue to increase. We acknowledge that no Bill can anticipate all threats that we will face in the future and the varying types of product that will come to the market, but we do have control over ensuring that we do our utmost in legislation to best protect the citizens of the United Kingdom. As we heard from a number of industry experts, one of the best ways to do that is to introduce a minimum period for which these products should be subject to security updates. For that reason, I hope the Committee will support the new clause.
Julia Lopez
Again, I thank the hon. Member for his suggestions, and I always appreciate the intention behind what he is trying to do. On this matter, we have been consulting with experts throughout the development of the legislation. As he will be aware, a lot of the details about how we shall regulate these products will come in secondary legislation. Here, we are taking broad powers so that, as the technology develops, we can tweak them as things change. We are also considering a wide number of products that will be in scope.
We do not want to take specific powers at this stage, and, as I mentioned in relation to the hon. Gentleman’s amendment 6, which we debated last week, it is important that the legislation retain the flexibility to adapt to and reflect the changing threat and technological landscapes. We have consulted widely on the legislation, and will continue to do so where new requirements are appropriate, but committing the Government to working on requirements framed using terminology that may seem appropriate today could limit the security benefits of such a requirement in the future.
As I reassured the hon. Member last Thursday, we are committed to introducing security requirements based on the first three guidelines of the internationally recognised code of practice for consumer internet of things security. Those will include a requirement for manufacturers to be transparent about the time for which products will be supported with security updates. At its core, that approach demonstrates a shift towards clear transparency that can inform the consumer when purchasing a relevant device. We know that many consumers are security conscious, but, as things stand, not enough manufacturers make that information readily available to them.
Data from Which?, which the Committee heard from last week, highlights that less than 2% of assessed products had clear information on the length of time for which they would receive security updates. We are using legislation to increase the availability of information to UK consumers, so that they can make their own purchasing choices with a clear understanding of security. As consumers learn more, they will expect more, and we hope that that will drive the market approach to embedding minimum periods for security updates. Last week, the Committee heard from Which? that some consumers might be continuing to pay for their devices even after security updates are available to them. That is exactly the kind of thing we want to avoid, and we think that transparency is the key to raising consumer awareness.
As manufacturers raise the bar to the appropriate level, we anticipate that more and more will do the same as a result of that shift to transparency. Should manufacturers fail to respond in that way, the Government may, in the future, consider that there is a case for setting out a requirement for certain products to be covered by minimum security periods. That is all part of the flexible approach we are keen to take to legislation to ensure that our requirements reflect the realities of technologies and the wider market.
Additionally, I have concerns that the new clause would commit the Government to unnecessary work that would only need to be repeated following the implementation of the initial requirements, before a substantiated case for this additional requirement could be made.
For those reasons, I am not able to accept the new clause. We are taking broad powers and a lot of details will be looked at when we consider secondary legislation. We will be looking at this issue as these products develop. If we think that a requirement for the hon. Member’s minimum period comes about, we will look at the issue again. At this stage, though, I hope he will consider withdrawing his new clause.
Product Security and Telecommunications Infrastructure Bill (Fourth sitting)
Julia Lopez ExcerptsThursday 17th March 2022
(2 years, 8 months ago)
Public Bill CommitteesRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 March 2022 - (17 Mar 2022)
Kevin Brennan (Cardiff West) (Lab)
I rise briefly to support my hon. Friend in pushing the amendment, in order to hear what the Minister has to say in response. The amendment goes to the heart of what a lot of the Bill is about: balancing the rights of private property owners and the policy requirement to speed up the roll-out of digital infrastructure.
This morning we debated an instance in which there would be no real financial cost to the private property owners from doing the right thing. In that instance, the state was ensuring that their properties could be accessed to put in the necessary infrastructure to roll out digital infrastructure in an urban setting—big blocks of flats, where lots of people might not have very good access to the internet and so on. In that instance, the Government were not prepared to accept our amendment, even though it would not have had any significant detrimental impact on the private property owners. In other words, they took the view that in that instance the private property owners, even if they would be only marginally inconvenienced, had to have their property rights protected, because this was a retrospective imposition and they would not have given permission.
In this instance—in fairness, I think this was not intended in 2017—private property owners have suffered, or might suffer, significant detriment to the income they can acquire through somebody else’s use of their land with the state’s assistance. In those circumstances, it is not unreasonable to say that the balance should be to ensure that they are not affected in a way that causes a massive reduction in the income they can earn from the use of their land.
If that was not a strong enough argument in itself, which perhaps it is not, the way the market has reacted to what happened after 2017 and the problems that there have undoubtedly been, with people reluctant to get involved with rolling out the infrastructure we need for the future, which we all want to achieve through the Bill and by other means, is further evidence that an adjustment perhaps needs to be made. The Minister could discuss with the Committee whether that adjustment is exactly what is contained in the amendment, but whether something should be done to address the arguments and concerns that have been expressed to us by those who own land on which such infrastructure is sited is certainly worth further consideration.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
I thank the hon. Members for Ogmore and for Cardiff West for their contributions and for the amendment. I acknowledge that this is a tricky issue. There have been problems between both parties since the 2017 reforms, but we maintain that the 2017 valuation provisions created the right balance between the public need for digital communications and landowner rights. I think there is agreement that the prices being paid for rights to install communications apparatus before that date were simply too high. With digital communications becoming an increasingly critical part of our daily lives, that needed to be addressed.
The new pricing regime is more closely aligned to those for utilities such as water, electricity and gas. We think that that is the correct position. As I said earlier today, we are not seeking to take sides. We are on the side of good digital connectivity for our constituents, and we firmly believe that landowners should still receive fair payments that, among other things, take into account any alternative uses that the land may have and any losses or damages that may be incurred. I was alive to the concerns expressed to me by the Protect and Connect campaign, but also to those raised by individual Members about tricky constituency cases. When I came into my role in September, I met individual Members to discuss those cases. I also met Protect and Connect.
I tested the cases that were brought to my attention and asked for further details, which often were not forthcoming. There was a catch-all excuse that a lot of them were under non-disclosure agreements and the precise amount of rents settled at could not be disclosed. My broad view is that there were initial concerns and difficult cases where the mobile network operators were too aggressive in their negotiations—I think that was effectively acknowledged in the panel discussions earlier in the week—but we seem to have found an equilibrium now, helped partly by some of the cases that have gone through the courts.
We now have a body of case law that can be referred to in some of these tricky negotiations. We are also trying to deter people from going to the courts in the first place, by introducing more alternative dispute resolution mechanisms. I say that to reassure Members. There were problems initially. As far as I can tell from my case load, the correspondence coming in, the discussions that I have had with Members and the lack of additional noise on the subject in the Chamber, a better equilibrium has now been found between the mobile network operators and the landowners. If that is not the case, I am happy to look at those cases again, and we are introducing mechanisms to provide better negotiations between parties via the legislation.
Turning to the amendment, I am not sure why the hon. Member for Ogmore thinks that a specific limit should be imposed on the percentage by which rent can be reduced when the rental payment is determined by a court. Further, it is unclear why he has chosen arbitrarily to apply a figure of 40%. We have strongly resisted specifically regulating the amount of rent payable under a code agreement. Our preference has been to allow the parties to freely negotiate the amount payable under an agreement, based on a statutory framework either in the code, the Landlord and Tenant Act 1954 or the Business Tenancies (Northern Ireland) Order 1996. Even where the parties cannot reach an agreement and the court has to impose its terms, including the rent to be paid, the court has the freedom to reach its own conclusions using that framework, rather than having its discretion restricted by statutory rent controls. As I said, my understanding is that we now have a much better equilibrium, in that we have amounts of rent that both parties are much more content with.
I understand the concerns about whether this has stymied roll-out. If operators cannot get their infrastructure on to land, I imagine that they would start paying more to try to incentivise landowners to take it on. I think we have also seen cases where it has been in the landowner’s interests to try to drag the process out so that they are on the old rents, rather than the reduced, new rents. I think that has also contributed to some of the delays.
If the amount of rent is controlled in the way suggested in this amendment, we will be heading closer to a regime that will apply reductions on a blanket basis, rather than take into account the broader range of relevant circumstances, as permitted by the legal framework. I suspect that that is something that both site providers and operators would be keen to avoid.
I am aware that it has been alleged that the Government expected rents to fall by in the region of 40% following the 2017 reforms. It is unclear whether it is on that basis that the hon. Member for Ogmore chose the statutory cap of 40% in his amendment. At the time of the 2017 reforms, which I confess predate me, the fact is that the Government were unsure what the level of rent reductions would be. We were clear that that was the case. Independent analysis contained in the impact assessment that accompanied those reforms predicted that reductions could be 40%, but that was never a Government prediction nor a target.
Chris Elmore
I did say in my opening remarks where the 40% comes from. Just to help the Minister, it does relate to the 2017 change, but also the Government’s own analysis from the time. I do of course accept that she was not the Minister, but her party was in government, and those are her own Government’s figures.
Julia Lopez
That certainly is a fair point to make, and I apologise for not picking that up in the hon. Member’s comments.
A cap is likely to be even more detrimental to constituents in rural communities, who will benefit from the increased connectivity and reliability that we hope the Bill will bring.
As I have explained, agreements to which the code applies can currently be renewed in various ways, depending on the type of agreement and where in the UK it was entered into. The intention of clause 61, along with clause 62, is to create a clearer and more consistent legislative framework under which agreements are renewed. Central to that is ensuring that, no matter where in the UK an agreement is renewed, the financial terms are calculated in the same way. That will help to ensure that there is not a digital divide across the UK, with one country receiving additional investment at the expense of others because operating costs are cheaper.
The amendment suggests limiting any reduction in rent that may be imposed by the court when agreements are renewed under the 1954 Act. While that proposal is well intentioned, we do not believe that it should be allowed to proceed. It is vital that there is fairness throughout the UK. The Bill as drafted provides a clear framework, which will not only result in all payments being calculated in the same way, but in the ability to renew agreements quickly and cost-effectively. We think that will expand the digital network.
Kevin Brennan
I take what the Minister said about the figure of 40%, but it was contained, as my hon. Friend the Member for Ogmore said, in a previous Government’s impact assessment. I remind her that, when Ministers issue impact assessments, they sign them, as she did with this one, saying:
“I have read the Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options.”
When her predecessor signed the impact assessment on behalf of the Government to say, “This is the Government’s official view of what is likely to happen,” their official view was that rents would drop, probably by 40%.
Julia Lopez
I accept the point that the hon. Gentleman is making. I also accept that in some cases rent reductions were much greater than expected. As we discussed earlier in the week, some of those were the result of overly aggressive behaviour by mobile network operators. We need to address some of the challenges that were raised by some of the changes that were made. In the body of case law, we now have a better equilibrium between landowners and operators, which should help to address some of those cases.
On some of the more emotive cases that have been raised with me over my tenure, I have sought to understand the details. Those cases are not always as has been presented, and I am led to believe that, in terms of a lot of the initially very difficult cases that came after the 2017 reforms were initially introduced, we are now in a very different place.
It is vital that there is fairness throughout the UK. As drafted, the Bill provides a clear framework that will not only result in all rental payments being calculated in the same way, but in the ability to renew agreements quickly and cost-effectively. We hope that will help us expand the digital network across the whole of our country. In those circumstances, I ask the hon. Member for Ogmore to withdraw his amendment.
I will now turn to clauses 61 to 65, which deal with the renewal of agreements to which the code applies that have expired or are about to expire. There are several ways in which such agreements can be renewed, depending on the type of agreement and where in the UK it was entered into. The aim of the clauses is to make all the routes to renewal as clear and consistent as possible, so that the process is the same across the UK.
The Chair
With this it will be convenient to discuss the following:
Government amendments 2 to 4.
That the schedule be the schedule to the Bill.
Julia Lopez
I am afraid I have to tell the Committee that this does not get any more inspiring.
The clause creates a bespoke process for telecoms operators to seek access to certain types of land where a person repeatedly fails to respond to requests for access to install apparatus under or over land for the purposes of providing an electronic communications service. The clause sets out that process by inserting into the electronic communications code new part 4ZA, which makes provision for a court to impose an agreement where the operator needs that person, “the landowner”, to confer or be bound by code rights. Part 4ZA will apply in situations where an operator intends to provide an electronic communications service and to achieve that must install electronic communications apparatus under or over, but not on, relevant land. “Relevant land” is defined as land that is not covered by buildings, and that is neither a garden, a park nor a recreational area. The provision also takes a power for the Secretary of State to specify through regulations further types of land that may be “relevant land”, but may only do so following consultation.
The provisions will require an operator to have given two warning notices, followed by a final notice. Those three notices all follow an initial request notice, giving a total of four. The Bill sets out that there must be a period of 14 days between the giving of each notice. For the landowner to fall out of scope of proposed new part 4ZA, all that is required of them is to respond to any of these notices in writing, before the operator applies to the court under part 4ZA. If any response is received, the operator will no longer be able to apply for a part 4ZA order and must either negotiate for a code agreement or apply for rights to be imposed by the courts in the normal way.
If granted, a part 4ZA order will impose an agreement between a landowner and an operator, conferring the rights requested in the initial notice. The terms of that agreement are to be specified in regulations. It may reassure the Committee that those regulations will be subject to the affirmative procedure. Furthermore, before the regulations are made, the Bill expressly obliges the Secretary of State to consult with a range of parties.
Importantly, the provisions impose a six-year maximum time limit on the period for which rights conferred under a part 4ZA order may last. I emphasise that detail, because it forms an important part of the Bill’s safeguards for landowners’ property rights. This clause provides a much needed process that will play a large part in ensuring that homes and businesses benefit from the national gigabit broadband upgrade and are not left behind.
I will now turn to the amendments tabled in relation to clause 66, all of which are technical amendments. Amendments 2 and 3 have been tabled in order to make a minor clarification to the text of the electronic communications code, to avoid any possible unintended interpretation of the legislation. Amendments 2 and 3 clarify that the right mentioned in paragraph 26(8) and paragraph 27G(4) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land. By inserting the words “under or over” into paragraph 26(8) and paragraph 27G(4) of the code, these amendments clarify that part 6 of the code may be used by a landowner to require the operator to remove apparatus installed “under or over”, as well as on, the land.
Without amendments 2 and 3, paragraph 26(8) and 27G(4) as currently worded may be interpreted to mean that while equipment installed on land under the “interim rights” or “unresponsive occupier” process could be removed via the part 6 process, equipment installed under or over land under these processes might not. That is not the policy intention, and as such this amendment is being introduced to clarify the policy position.
Amendment 4 makes a minor amendment to remove a provision which has been found to have no effect. The provision in question—paragraph 3(9) of the schedule to clause 66 in the Bill—was intended to ensure that part 5 of the code does not apply to the process created by clause 66 in the Bill. Part 5 of the code sets out that code rights may persist even after the agreement which underpins them expires. It was never intended that part 5 should apply to rights gained through part 4ZA, due to the importance of the time limits I have mentioned. The Bill provision that this amendment removes was intended to ensure that part 5 did not apply to rights gained through part 4ZA. However, we are satisfied a different part in the code already ensures this. As such, paragraph 3(9) in the schedule of the Bill has no real effect and ought to be removed.
In practical terms, there is no legal or policy change effected through this amendment, beyond increasing the clarity of legislation. This amendment simply removes a provision which had no effect in the first place, and thus tidies the legislation. I hope that everyone will accept that that is beneficial.
Chris Elmore
I want to make clear the Opposition’s support for clause 66. From all my conversations with industry, it is quite clear that where there is an unresponsive landowner, it is extremely complicated to then meet the public’s demands. If the Bill is about improving digital activity for all our constituents, particularly in some of the most rural and hard to reach communities—I find it hard to believe that includes my own constituency, but it does—then this is an important and welcome change.
Kevin Brennan
Despite the very thorough explanation that the Minister gave of what is a technical clause, I understand what the difference is between something being placed over or under land, but I am not sure what the difference is between something placed over or on land. There must be a technical reason why it is there; does she know the answer to that?
Julia Lopez
I think it being on land is a much more intrusive process. For instance, we could be talking about a cable that happens to be going over somebody’s land, and therefore to do something to it would not require a great deal of intrusion. Similarly, if it was the matter of being able to dig at the side of a road, it is technically access land, but only underneath the surface of the land—I hope this makes sense. It is much less intrusive process. I think it is a process that could be objected to far less by a landowner; they are not being asked if somebody can drive over their land, put something unattractive on it or inconvenience them in any way. We are talking about underground works and cabling works that objectively would have no real impact on their land.
Question put and agreed to.
Clause 66 accordingly ordered to stand part of the Bill.
Schedule
Unresponsive occupiers: consequential amendments
Amendments made: 2, in the schedule, page 66, line 17, at end insert—
“(c) in sub-paragraph (8), after “placed on” insert “, under or over”.”
This amendment clarifies that the right mentioned in paragraph 26(8) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land.
Amendment 3, in schedule, page 66, line 18, after “sub-paragraph (4)” insert—
“(a) after “placed on” insert “, under or over”;
(b) ”
This amendment clarifies that the right mentioned in paragraph 27G(4) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land.
Amendment 4, in the schedule, page 66, line 20, leave out sub-paragraph (9).—(Julia Lopez.)
This amendment removes the amendment to paragraph 30(3) of the electronic communications code. The amendment to paragraph 30(3) is unnecessary because paragraph 30(2) would not in any event apply to a code right conferred by virtue of an order under new paragraph 27ZE of the code.
Schedule, as amended, agreed to.
Clause 67
Arrangements pending determination of certain applications under code
Question proposed, That the clause stand part of the Bill.
Julia Lopez
The clause deals with situations where once an agreement to which part 5 of the code applies has run its initially agreed course, one of the parties wants it to be terminated, modified or replaced by an agreement with different terms. In those circumstances, the matter can be referred to a tribunal if the parties cannot resolve matters themselves. It can take time for such disputes to be dealt with, and paragraph 35 of the code deals with the circumstances in which an interim order can be requested, which will apply until the full dispute is heard.
Our policy intention for interim orders is to allow any specific priority aspect of a dispute to be looked at, so that temporary arrangements can be imposed where appropriate. At present, however, paragraph 35 of the code is restricted, so that only a site provider can ask for an interim order, and they can do so only in relation to the consideration paid by an operator. The clause widens that provision so that either party can ask for an interim order and can do so in relation to any term of the former agreement. That will enable specific issues to be dealt with at a much earlier stage of the dispute. In particular, it will mean that operators are given the same opportunity as site providers have to ask for the financial terms of an agreement to be reviewed on an interim basis. This will help ensure that once an agreement to which part 5 of the code applies has run its initially agreed course, there are no unnecessary delays to the valuation framework of the code being applied to new financial arrangements.
It will also provide the courts with greater flexibility to look at situations where a party needs an urgent change to any term of their agreement. We think that will be particularly helpful where an operator needs urgent changes to terms so that they can upgrade or continue using an existing site. There are likely to be situations where this will also benefit site providers. However, the clause is not to be used as a way of circumventing the usual negotiation process. Parties will be expected to negotiate in the usual way before making an application to the court, and to comply with the ADR requirements that the Bill introduces.
We think the clause will help many operators benefit from the full code framework at a much earlier stage, which will allow them to take advantage of provisions to upgrade and share apparatus and the code valuation framework as introduced in 2017. That will result in more investment in the expansion and upgrading of digital networks, ensuring that consumers receive the best coverage and connectivity possible.
Question put and agreed to.
Clause 67 accordingly ordered to stand part of the Bill.
Clause 68
Use of alternative dispute resolution
Question proposed, That the clause stand part of the Bill.
Julia Lopez
I will now speak to clauses 68 and 69, which introduce measures on alternative dispute resolution and complaints relating to the conduct of operators. The purpose is to encourage more collaborative discussions between landowners and telecoms operators, and to ensure that litigation is used only as a last resort where an agreement cannot be reached.
Clause 68 sets out two new requirements for operators and one new requirement for courts. Together, they will encourage the greater use of alternative dispute resolution processes. The requirements are as follows. First, when a request notice is sent for access to land or other rights under the electronic communications code, all operators must inform the landowner of the availability of ADR processes if the landowner is unhappy with the offer made. Secondly, in cases where an agreement cannot be reached operators must consider using ADR processes before applying to the courts. If the matter relates to modification of an expired agreement, either party must consider ADR before applying to the court. Finally, when awarding costs, the courts will be required to take into account any unreasonable refusal to engage in ADR by either party.
Some landowners and their representatives have told us that they find negotiations for code rights difficult. In some cases, landowners have felt pressured to accept any terms offered, to avoid the risk of being taken to court—this relates to the David and Goliath situation that we discussed earlier in the week. The measures in clause 68 address this issue by encouraging the use of ADR in order to minimise the risk of landowners feeling such pressure, and to facilitate co-operative discussions between landowners and telecoms.
Clause 69 inserts new subsection (ca) into paragraph 103 of the electronic communications code, which lists the issues that Ofcom’s code of practice must deal with. Subsection (ca) adds to the list
“the handling by operators of complaints relating to the failure of operators to comply with the code of practice”.
Landowners and their representatives have reported to the Government that, in some cases, they are reluctant to enter into code agreements because they are concerned about how the operator or their contractors will behave when they access the relevant land. The clause works to address the issue by requiring Ofcom to prepare guidance, following consultation, regarding operators’ handling of conduct. To complement that, we will bring forward secondary legislation to introduce a new statutory requirement for operators to have a complaints process for code matters, enforced by Ofcom.
Question put and agreed to.
Clause 68 accordingly ordered to stand part of the Bill.
Clause 69 ordered to stand part of the Bill.
Clause 70
Power to impose time limits on the determination of code proceedings
Julia Lopez
I beg to move amendment 5, in clause 70, page 60, line 15, at end insert—
“, and
(b) amend or repeal any of the following provisions (which provide signposts to those regulations)—
(i) paragraph 2A of Schedule 3 to the New Roads and Street Works Act 1991;
(ii) section 107(1A) of this Act;
(iii) paragraph 97 of Schedule 3A to this Act;
(iv) section 69(5A) of the Marine and Coastal Access Act 2009;
(v) section 27(6A) of the Marine (Scotland) Act 2010.”.
This amendment ensures that the power conferred by the new section 119A of the 2003 Act includes power to amend or revoke certain signposts in primary legislation which might otherwise be rendered otiose by the exercise of that power.
Julia Lopez
It is clearly desirable that legal disputes relating to code rights be dealt with as quickly as possible; that will minimise delays to network deployment and expansion in a number of ways.
Fast dispute resolution will make sure that, where the public interest test is satisfied, operators can get the rights they need for network deployment and expansion as soon as possible. It also means that where that test is not satisfied, that is identified promptly, so that operators know they have to explore different options. Finally, fast dispute resolution is in the best interests of all parties. Protracted legal proceedings take time, cost money and harm ongoing stakeholder relationships.
However, while we recognise that fast dispute resolution has a lot of benefit, it is important that there be no undue interference with the judicial process and the ability of courts to deal with cases justly. Time limits should not, for example, interfere with a court’s ability to provide the parties with sufficient opportunities to identify, locate or produce evidence. Any statutory provisions relating to the time within which disputes must be determined therefore require careful consideration and close scrutiny.
Legislation already makes limited provision for certain applications relating to new code rights to be heard within six months, but this provision sits outside the code; it is in the Electronic Communications and Wireless Telegraphy Regulations 2011. It was introduced in the course of our transposing European legislation, rather than as a specific element of the domestic code framework.
The new power in clause 70 will enable the Secretary of State to make regulations that are broader in scope, and can specify a period within which a full range of code-related disputes must be determined. As the clause makes clear, regulations made under it may amend or revoke provisions made under the 2011 regulations. That gives the Secretary of State flexibility to consider a full range of approaches, including having no time-limited period at all, if appropriate.
Other, wider measures that we are introducing in the Bill, and potentially in subsequent secondary legislation, will affect court resources. In many cases, the changes will ensure that caseloads are more evenly distributed, particularly between the first-tier and upper-tier tribunals. Rather than seeking to make changes relating to dispute time limits now, we are therefore putting in clause 70 a power permitting the Secretary of State to make regulations on this issue in future. That will enable the Government to revisit the measures as a whole, once the other measures in the Bill come into force, so that their overall impact can be assessed when considering whether changes are appropriate. We will, of course, work closely with the Ministry of Justice and the Northern Ireland and Scotland Governments before making any further proposals on this issue.
Amendment 5 provides a very limited power for the Secretary of State to amend a specified list of provisions in primary legislation. The provisions signpost to regulations about time limits for disputes on code rights. It is clearly desirable that legal disputes relating to code rights be dealt with very quickly. Any statutory provision relating to the time within which disputes must be determined requires careful consideration. The amendment ensures that, if changes are made to the existing regulations, corresponding amendments can be made to legislation that signposts those regulations.
Chris Elmore
This point also relates to previous clauses, but I think links best to clause 70. The Minister mentioned that the Secretary of State would review dispute resolution at a later date. Throughout the oral evidence sessions, there were calls from the NFU, Protect and Connect and other organisations for the dispute resolution to become compulsory. If resolutions were slowing down, and decisions were not being reached, would the Minister consider introducing, through secondary legislation, a compulsory element, so that we can avoid some of the concerns raised by the witnesses, particularly those representing landowner and club groups and so on?
Julia Lopez
I think it is implicit in what I said that we will keep all of this under close review, because we do not want any of the changes we make to slow the roll-out. We hope that the changes have their intended effect, which is ultimately not about any particular group’s interests, beyond their getting better digital connectivity. We are always happy to keep this under close review. We do not think a mandatory ADR would serve our overall goal. If problems come up over the next few years, these powers will enable us to make changes.
Amendment 5 agreed to.
Clause 70, as amended, ordered to stand part of the Bill.
Clause 71
Rights of network providers in relation to infrastructure
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Sharing infrastructure in the roll-out of gigabit-capable networks can greatly reduce the cost of deploying networks, increase the pace of roll-out and reduce the frustrating need to dig up streets, preventing unnecessary disruption to the local populations we represent and reducing carbon emissions. The Communications (Access to Infrastructure) Regulations 2016 enable sharing of information about access to physical infrastructure across the utility, transport and communications sectors. They include the right to access that infrastructure on fair and reasonable commercial terms and conditions. The 2016 regulations were implemented in the UK, following the European broadband cost reduction directive, to reduce the cost of deploying high-speed electronic communications networks.
We recently published our response to a call for evidence on a review of those regulations. We set out that there may be areas where the 2016 regulations could be made easier to understand and use. We said we would legislate to allow future changes to the 2016 regulations via secondary legislation, rather than having to rely on primary legislation. This legislation would be subject to a further consultation with Ofcom and such other persons the Secretary of State considers appropriate. It would also be scrutinised in the Parliament through the affirmative procedure.
Clause 71 grants the Secretary of State the power to make provisions, through regulations, conferring rights on network providers in relation to infrastructure for the purpose of developing communications networks. These provisions include the power to amend, revoke or replace the 2016 regulations. The clause details the areas in which provisions may be made by the Secretary of State through regulations. These areas include: provisions relating to grants of access to relevant infrastructure; the carrying out of work as specified; procedures and forms of request by network providers for rights conferred by the regulations; and disputes under the regulations.
Question put and agreed to.
Clause 71 accordingly ordered to stand part of the Bill.
Clause 72
Power to make consequential amendments
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Clause 72 confers on the Secretary of State a power to make any changes to other legislation that are required as a consequence of part 2 of the Bill coming into force. By way of example, changes may be needed to ensure that legislation that references the electronic communications code continues to work correctly after the Bill is passed. The power can be used to amend any legislation. In the case of primary legislation, it is limited to legislation passed or made before the end of the parliamentary Session in which the Bill is passed.
Clause 72 requires that any regulations made using this power that amend or repeal primary legislation be subject to the affirmative procedure. The negative procedure will apply to any other regulations made using this power. Where any changes are required to devolved legislation, the UK Government will work with the devolved Administrations to ensure that the wider legislative framework operates as intended. Clause 73 provides a straightforward explanation regarding references in this Bill to the electronic communications code.
Kevin Brennan
As the clause impacts the devolved Administrations and gives Ministers the right to interfere with primary legislation that is being passed by the devolved Governments, what consultation there has been with the Senedd, Scottish Parliament and Northern Ireland Assembly about this power of the UK Government?
Julia Lopez
We have official-level contact frequently, in case something has to be changed. I would like to reassure the hon. Gentleman that I have met my counter-parts in the Scottish and Welsh Administrations, including one of his colleagues in the Labour Administration. I will continue to have those meetings, in case changes that would have any meaningful impact are required as a result of the legislation.
Question put and agreed to.
Clause 72 accordingly ordered to stand part of the Bill.
Clause 73 ordered to stand part of the Bill.
Clause 74
Power to make transitional or saving provision
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Clause 74 allows the Secretary of State to make transitional or saving provisions. This is required to provide for a smooth introduction of the new legal framework by, for example, specifying grace periods before the legislation comes into force. Clause 75 makes provision about a number of technical matters that regulations made under the Bill address, and enables such regulations to be exercisable by statutory instrument.
Clause 76 sets out the extent of the provisions of the Bill. Both cyber-security and telecommunications are reserved matters, and, for the most part, the Bill extends across the UK. Clause 77 sets out the commencement. Clause 27, on matters of enforcement, comes into force on Royal Assent, and the remaining clauses come into force via commencement regulations made by the Secretary of State. Clause 78 is the short title of the Bill.
Question put and agreed to.
Clause 74 accordingly ordered to stand part of the Bill.
Clauses 75 to 78 ordered to stand part of the Bill.
Ordered, that further consideration be now adjourned.—(Steve Double.)
Product Security and Telecommunications Infrastructure Bill (Third sitting)
Julia Lopez ExcerptsThursday 17th March 2022
(2 years, 8 months ago)
Public Bill CommitteesRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 March 2022 - (17 Mar 2022)
Chris Elmore
It is a pleasure to serve under your chairmanship, Mr Stringer.
This important legislation establishes, through regulations, three core security requirements for “connectable products”. The requirements derive from the voluntary 2018 “Secure by Design” code introduced by the Department for Digital, Culture, Media and Sport. The inclusion of these three requirements is, without doubt, a step that the Opposition welcome. However, we believe that the legislation can be improved, and that the three security requirements, rather than being defined in future regulations at the discretion of the Secretary of State, should be expressly set out in the Bill. That would be beneficial for two reasons. First, it would give manufacturers and distributors a greater understanding of the legal obligations that they face, thus speeding up the entire process. Secondly, it would ensure that the consumer was better protected, which I am sure we all agree would be a good thing. The consumer rights group Which? emphasised that when it gave oral evidence on Tuesday.
New clause 3 would require the Secretary of State to publish a report on the security risks to UK connectable products. On Tuesday, Madeline Carr, professor of global politics and cyber-security at University College London, said that she does not have an Alexa in her house because of the security risks that those devices, and others like them, pose. Tellingly, she also said that the Bill as constituted would not give her sufficient confidence to purchase one. Given that, and given the tragic scenes unfolding following Russia’s invasion of Ukraine, and the willingness of that rogue regime to engage in state-sponsored cyber-warfare, the Opposition believe it is in the public and national interest to understand how secure our connected products really are. We are becoming more reliant on smart devices in our daily life, both professionally and personally. It is imperative that the security of these devices is routinely monitored and reported on.
As I stated on Second Reading, the Opposition support the Bill, but believe it can be strengthened. Amendment 6 and new clause 3 would ensure that consumers were better protected and more aware of the threats facing their connected devices. As such, I believe that all Committee colleagues should support amendment 6 and new clause 3.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
It is a pleasure to serve under your chairmanship, Mr Stringer. I apologise for giving you a dilemma about the advice on jelly babies. I will start with a few words about the importance of the Bill. As we heard from our panels of witnesses this week, and as we know from our increasing dependence on technology, improving protection for consumers and networks from a range of harms associated with cyber-attacks is incredibly important. In the first half of last year, there were 1.5 billion attempted compromises of internet of things devices—double the 2020 figure for the same period. Voluntary standards, such as the 2018 code of practice for consumer IOT security, are not being adopted quickly or consistently enough. That is why we need legislation to progress security in the design of consumer connectable products.
Before turning to amendment 6, I thank the hon. Member for Ogmore for the constructive and helpful way that he has approached the legislation and for the Opposition’s broad support of it. As this is the first Bill that I am taking through the House in its entirety, I am particularly grateful for that constructive approach. It may reassure him that the Government are committed to introducing security requirements based on the first three guidelines through regulations at the earliest appropriate opportunity. We have consulted on those security requirements and have communicated them extensively.
We have not been vague on the matter. In April 2021, we published our response to the call for views on consumer connectable product security legislation. We stated in detail how the three security requirements would work. When the Bill was announced by Her Majesty at the start of the Session, we repeated that commitment. Indeed, as hon. Members will see in the Bill’s explanatory notes, we have again committed to those three requirements. We made that clear from the start for an important reason: we need industry to act and prepare for implementation. We do not want surprises for manufacturers, importers or distributors. They know what they have to do.
Amendment 6 is unnecessary, but might also be dangerous. We are keen to ensure that the legislation retains flexibility, so that it can adapt to and reflect the changing threat landscape, and the security requirements needed to address it. What might seem like a no-brainer security requirement today might become a security threat or barrier to security innovation in years to come.
Amendment 6 reaches back to 2018, when our code of practice was first published. Security requirements have developed since then. When the Bill is implemented, we do not think it should be constrained by what was appropriate five years ago. The requirements we will introduce are based on the first three guidelines in the code of practice, but they also contain necessary improvements. They are up to date, more detailed and have been translated into practical requirements that businesses can implement to get the right security outcomes without unnecessary burden. Stakeholder engagement and impact assessment work conducted since 2018 ensures that the guidelines are nuanced, and are in a robust and enforceable statutory framework that delivers optimal security outcomes.
Finally, hon. Members may not be aware that because this new legislation will impact on manufacturers globally, we have given notice of the Bill to the World Trade Organisation. We invited comments on our proposals two years ago, and when the Bill was introduced to Parliament, we gave notice again. We have worked to ensure that all manufacturers understand our intentions. Amendment 6, if accepted, would cause confusion by taking us back to 2018, and away from the more developed position we have reached on the three principles. That would cause market confusion, require new notification to the WTO, and potentially delay this vital regime from coming into force. With those reassurances, I hope the hon. Member will feel able to withdraw his amendment.
Clause 1 is needed to provide the Government with the necessary powers to specify and mandate security requirements, through secondary legislation, that businesses must comply with. There is a common notion that Governments are behind the curve when it comes to regulating technology. not in this case. By establishing a flexible and futureproof regulatory framework in this way, the Government can be agile and proactive in amending and introducing security requirements through regulations, in lockstep with tech innovation. Parliament will be able to scrutinise any future security requirements designated through the secondary legislation process and, as new threats emerge and international standards develop, we can act and set new security requirements, keeping consumer connectable product security up to date and fit for the future.
The purpose of clause 2 is to provide further detail about how the Secretary of State’s power to specify security requirements can be used. Clause 3 is essential because it provides the Secretary of State with powers to specify circumstances in which a person is deemed to have complied with the security requirements. The clause, when exercised, would provide more than one route to compliance and would provide the necessary flexibility to accommodate and recognise international standards and mutual recognition agreements where appropriate.
I turn to new clause 3. In practice, it would commit the Government to reporting on a fixed basis on the security risks posed by products affected by the Bill. Those reports would be laid before Parliament. Cyber-security is definitely not an area where the Government hold back on publishing information. If we are to raise the cyber-resilience of the nation, we need to ensure that everyone is clear about the threat. In December, we published our national cyber strategy. The Government will continue to publish regular reports on our progress on that strategy, as we did with regard to the previous strategy. The Government also publish an annual report that surveys cyber-breaches across the economy. This report, together with others, forms a key part of the evidence base used to inform organisations about action to take to raise security standards. Indeed, the breaches survey meets the quality threshold to be managed as a set of official statistics.
Our National Cyber Security Centre is also a model of transparency. It is there to advise businesses, and guide them towards better managing cyber-threats. It publishes an annual report, and for those who want to focus on consumer connectable products, it provides specific advice on those, too. Parliament is already regularly kept informed of cyber-security matters; our regular publications are placed in the Library. Our national strategy, implemented with £2.6 billion of investment, is overseen by the Public Accounts Committee. The Intelligence and Security Committee and the Joint Committee on the National Security Strategy provide further oversight. Also, there are mechanisms for holding the Government to account in the manner intended by the provision, such as regular parliamentary debates and questions.
Cyber-security is a fast-moving and sensitive topic. A fixed-period reporting clause that imposes an obligation to report on security risks may duplicate existing activity. Such a system would also lack the agility necessary to enable us to report quickly when threats are identified. It may reassure the hon. Gentleman to know that the Secretary of State will be required to review the effectiveness of the Bill’s enforcement regime; they, or the designated enforcing authority, will be required to report on that to the relevant departmental Select Committee after Royal Assent. The enforcement authority will also report its activity and findings, where appropriate. The measures already in place will likely meet the intention behind new clause 3. For the reasons that I have set out, I do not accept the need for the new clause.
I turn to the points that the hon. Gentleman raised about Dr Carr’s concerns about Alexa, which I also found eye-catching. A lot of secondary legislation comes with this Bill, and that will hopefully reassure Dr Carr. I also note the comment made by a lot of our witnesses: we can never have 100% security with those devices. I therefore commend clauses 1 to 3 to the Committee.
Kevin Brennan (Cardiff West) (Lab)
Good morning, everybody. Happy St Patrick’s day to everyone. I congratulate the Minister on her first Bill. I have been through the process many times, and it is an exciting and proud moment to lead on a Bill for the Government for the first time. When I did it, my father, who was from West Cork, said, “Not bad for someone from the peat bogs of West Cork.” I am sure that the Minister’s family are equally proud of her achievement.
I want to raise a couple of general issues, as we are debating the first three quarters of the Bill in this grouping. I congratulate the Minister for providing such a comprehensive impact assessment on the Bill. I was slightly confused by the figure for the cost of business, which is set at net present value, and is put at “£1,246.9.9” million. That figure looks like a typo. I wondered what the correct figure was, and if the Minister could provide it. I suggest it is just the one “point nine”.
This is a very significant piece of legislation, given the impact it will have on consumers and business. It is very technical. Page 8 of the impact assessment details the Government’s key assumptions about how the Bill will impact on businesses. Businesses will have to dispose of devices that no longer satisfy the criteria that the Minister is likely to set. The impact assessment’s optimistic assessment of what percentage of devices will have to be disposed of is 5%. Its working assessment is 45%. The figure it is using, however, for the impact on business is that 10% of devices will have to be disposed of by businesses.
Julia Lopez
I thank the hon. Member for Cardiff West for his contribution and his kind comments. I will have to get back to him on the precise figures that he identified in the impact assessment. However, in relation to the breadth of the impact assessment, he will know from this legislation that we are taking a broad range of powers. As we debated earlier, that is very deliberate because this is a fast-moving area. Technology is developing faster than Parliament can regulate it, which is a major challenge for Governments around the world. The Bill will help us to be nimble and agile in how regulate that technology.
A lot of the issues that the hon. Gentleman has concerns about will be something for secondary legislation, which we will be developing hand in glove with businesses so that we understand what is changing in the technological world and what impact that will have on matters such as the disposal of devices. I share his concerns about the environmental impacts if we get the regulations on that wrong—none of us wants to see a lot of technology become redundant.
We are trying to help consumers have more information so that if someone buys a device, they do not necessarily have to dispose of it simply because the period for which the manufacturer says it is covered has expired. It will be up to the consumer to decide whether to keep that device if they think it is less secure than it otherwise might be. It has been controversial to take these broad powers. We understand the concerns that any Parliament would have about the level of scrutiny it will have. However, the Government think that this is right because, as I say, we have to maintain that agility.
The hon. Member for Cardiff West referenced the points raised by Dr Carr. As I said earlier, I share those concerns. What we are trying to do is raise the level of security overall; we want to help consumers and manufacturers to understand this as an issue. This was initially a voluntary code, which did not do enough to make manufacturers take the cyber obligations seriously. There was an interesting discussion on the panels earlier this week when one contributor—I cannot remember who it was exactly—said that the legislation will give boards the spark or impetus to discuss and get funding for these kinds of cyber-security requirements for their products. If it is voluntary, it is very hard for anybody to make the case within their company that they need to take cyber-security seriously.
We hope that the secondary legislation will allay some of Dr Carr’s concerns. We will never have 100% security, but we hope that these provisions will raise the bar overall and help to raise consumer and manufacturer awareness of cyber as a whole. I hope that those comments will reassure the hon. Gentleman. I also assure him that we will look at how to get the balance right in the secondary legislation, and we will be in close contact with businesses as we do so.
Chris Elmore
I listened to what the Minister had to say, in particular in relation to amendment 6. I take her at her word; it is a probing amendment, so I will withdraw it on the basis that she will bring forward secondary legislation in relatively short order. As she mentioned, cyber-security is a fast-paced and changing environment, so it is important that we do not wait a number of years for additional improvements to legislative competence.
On the basis of what the Minister said, I am also happy not to move new clause 3. However, I wonder whether she could write to me setting out the reporting periods that she mentioned, particularly in terms of the DCMS Committee, following Royal Assent—assuming that the Bill gets Royal Assent, which I am sure it will—as well as the other reporting obligations that she says the Secretary of State or reporting officer will have. The new clause seeks to place a requirement on the Secretary of State specifically in this new legislation. If the Minister feels that those things are already in train or are part of the reporting process, that is fine, and I am happy not to move the new clause. However, it would be good to have that list for future understanding—particularly if reporting does not take place, in which case the Opposition will hold the Government to account.
Julia Lopez
I am happy to write to the hon. Gentleman and offer those assurances. A new body will also be set up, which will probably have its own reporting requirements in relation to this legislation. These things will be developing, but I am happy to offer him the assurances he requested.
Chris Elmore
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 1 to 3 ordered to stand part of the Bill.
Clause 4
Relevant connectable products
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Clauses 4 to 6 define the products to which the new regulatory regime will apply. Clause 4 introduces the terms “internet-connectable product”, “network-connectable product” and “excepted product”. Clause 5 defines the terms “internet-connectable” and “network-connectable”. It is a pivotal clause in capturing the necessary products that make up a huge part of the internet of things threat landscape. Any network is only as secure as its weakest link, and that could be a single consumer connectable product.
Focusing on a product’s capabilities—instead of attempting to exhaustively list all consumer connectable products—is part of our agile, future-proof approach. We are ensuring that the Bill will remain relevant and effective by capturing new consumer technologies that come to market, based on their capabilities and the risks they present.
Many products captured by the Bill are capable of connecting to the internet, exposing them to remote access and attack. Those are “internet-connectable products”, such as routers, smartphones and certain smart appliances. Some products captured by the Bill are not able to connect to the internet directly, but can connect to other products. In doing so, they can form, and contribute to the formation of, networks, meaning that vulnerabilities in those products can open the door to cyber-attack. Those are “network-connectable products”, such as certain smart lightbulbs, smart home products, and headphones.
Clause 6 defines the term “excepted product”. It allows the Secretary of State to except products from the scope of the Bill via regulations. The Government intend to except products from the scope of the Bill where inclusion would subject them to double regulation or be disproportionate to their risk profile. The Government have consulted on that approach. Products such as electric vehicles, medical devices and smart meters will be excepted from scope because they are already, or soon will be, covered by alternative regulation. I therefore commend clauses 4 through 6 to the Committee.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Clauses 5 and 6 ordered to stand part of the Bill.
Clause 7
Relevant persons
Chris Elmore
I beg to move amendment 7, in clause 7, page 5, line 24, at end insert—
“(5A) A person who provides an online facility through which a distributor makes a product available in the United Kingdom is also a distributor.”
This amendment would ensure that online marketplaces are considered to be distributors and are thus subject to the security requirements of the Bill.
Julia Lopez
I thank the hon. Members for Ogmore and for Cardiff West, and I am happy to address their concerns. The Bill covers obligations on manufacturers, importers and distributors, but I will provide a bit more detail.
Clause 7 specifies which relevant persons will be responsible for ensuring that the security requirements are properly complied with. In that regard, a “relevant person” is defined as a manufacturer, importer or distributor of a relevant connectable product. As a result, amendment 7 is wrong to suggest that online marketplaces are exempt from this new legislation. Online marketplaces do not just offer products on behalf of third parties, but are often acting as the retailer, so in those cases the full security requirements apply. I accept that there may be instances in which the online marketplace is not the distributor. None the less, it is necessary for the third party operating in the marketplace to comply with the security requirements, and it is not just that one party who carries liability under the Bill: the manufacturer and importer also have responsibility. We think we have taken a belt-and-braces approach in that regard.
We have also worked closely with industry to make sure the regulation is proportionate and fits the wider regulatory environment for product safety. Manufacturers care a great deal about these regulatory requirements. On Tuesday, we heard from a representative of Google, who described how it works to comply with requirements in many different jurisdictions. Over the past three years, hundreds of manufacturers have engaged with my Department through the many public consultations and industry discussions we have had. The hon. Member for Ogmore gives the impression that amendment 7 would provide consumers with a vital line of defence, but that is not the case: there are already multiple lines of defence in this Bill.
It is also worth noting that consumers can never be 100% protected by regulation—a point that we have already discussed this morning. We need to have a broader approach to raising national cyber-resilience, which is why in December we published our national cyber strategy. The Cyber Aware campaign is ongoing—hon. Members may have seen the advertisements last weekend, or the ones on the radio and online this week. We also have a range of school programmes designed to reach parents and teachers in order to raise cyber-security awareness, and the Home Office, the police and the NCSC run regular campaigns at a local level in every region of the country. In relation to the comments made about Ukraine, the point is even more important because of the context in which we are operating.
Kevin Brennan
Just to be clear, if, for example, I purchased a connectable baby monitor online through Amazon, but it came from a third-party supplier—which is quite common when customers are given that list of products to buy—how would the Bill impact on that device and its availability in the UK?
Julia Lopez
As I say, we are putting requirements on not just manufacturers, but the importer. The importer would be under an obligation to check whether the product fulfilled some of the requirements we would have for it, as would the distributor. I would hope that, along the chain, that product would have been checked several times to make sure it complies.
We have done a lot of work on general cyber-resilience. I will take this opportunity to add that it is also important that we as Members of Parliament try to make our constituents aware of the increasing challenges we face with cyber-resilience, and that we all need to have our own cyber-hygiene in that regard.
The amendment is well intentioned—we understand where the hon. Member for Ogmore is coming from—but it is drafted in a way that would have a much broader reach than just online marketplaces. It would impose security requirements on businesses that cannot comply with them, such as advertising platforms and website hosting services. Distributors use many online facilities offering a vast array of cloud services to support e-commerce to make their products available. As drafted, the amendment would extend duties beyond what is intended.
The Government have carefully considered the amendment. It is clear that our intention is to secure consumer connectable products in the most effective and proportionate manner, without hindering business growth and the online retail facilities enjoyed by consumers. For the reasons I have set out, I am not able to accept the amendment. I hope the hon. Gentleman will consider withdrawing it.
I turn now to chapter 2 of the Bill and clauses 8 to 25. These clauses place duties on businesses in the supply chain of a consumer connectable product to comply with security requirements. Compliance is fundamental to the operation of the regulatory regime. Under these clauses, manufacturers, distributors and importers must prepare, or ensure the presence of, a document to accompany the product that states that, in the opinion of the manufacturer, it has complied with the security requirements, before that product is made available in the UK. I note the point that was made about baby monitors. I hope that, in that process, there would be clear information and a record provided with the product that stated compliance.
The clauses in chapter 2 also require that businesses take all reasonable steps to investigate a compliance failure or potential compliance failure. That is vital to hold businesses accountable for complying with their security requirements and to mandate investigation of potential compliance failures. If compliance failure has occurred, businesses in the supply chain must take all reasonable steps to prevent the product from reaching UK customers and remedy the compliance failure. The measure is needed to ensure that insecure products do not remain on the market and that those that have not yet reached UK customers are prevented from doing so.
Finally, the clauses in chapter 2 require manufacturers and importers to retain records of compliance failures and investigations for at least 10 years. The Secretary of State is able to request this information to investigate and to enforce the legislation. These duties encourage ongoing compliance and accountability. The records will allow a clear audit of the importer’s and manufacturer’s activities, so that we can have effective enforcement.
Chris Elmore
I have listened to the Minister. The Opposition are not in any way suggesting that the Government do not do an awful lot on cyber awareness-raising. All Governments could do more—that is the nature of teaching and learning and of being able to get our constituents to understand the cyber-security space and the impact that it can have on their homes.
In response to my hon. Friend the Member for Cardiff West, the Minister mentioned the belt-and-braces approach. However, organisations such as Which? say that there is an exemption for online marketplaces such as Amazon and eBay. The Online Safety Bill has of course been published today, and there are economic crime impacts linked to this. If this is a belt-and-braces approach, as the Minister says, surely another level of protection would be to include the online marketplaces. She says there are three stages that could be protected—importer, product design and distribution—but there is this gap through which some products could come. Therefore, I am not minded to withdraw the amendment and would ask the Committee for a decision.
Question put, That the amendment be made.
Julia Lopez
Clause 26 gives the Secretary of State responsibility for enforcing the product security provisions in the Bill, and clauses 27 to 52 create the regime. This allows the Secretary of State to authorise another person, and pay them, to carry out enforcement functions. The provisions provide powers to issue enforcement notices—including compliance notices, stop notices and recall notices—as well as powers to forfeit products and issue monetary penalties.
Additional enforcement powers include the power to seize and detain products, publish information about compliance failures and the details of the enforcement action taken, recall products, and disclose information as necessary to conduct enforcement activity. The Bill includes two offences—the offence of failure to comply with an enforcement notice and the offence of purporting to act as authorised to exercise enforcement function—as well as adopting within the PSTI regulatory regime the offences found in schedule 5 to the Consumer Rights Act 2015. I commend the clauses to the Committee.
Question put and agreed to.
Clause 26 accordingly ordered to stand part of the Bill.
Clauses 27 to 52 ordered to stand part of the Bill.
Clause 53
Guidance
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Clauses 53 to 56 cover guidance and interpretation of the Bill. They allow for guidance to be issued to support relevant operators to meet their obligations. They also set out the technical terms and interpretations of the commonly used terms throughout the Bill. I commend the clauses to the Committee.
Question put and agreed to.
Clause 53 accordingly ordered to stand part of the Bill.
Clauses 54 to 56 ordered to stand part of the Bill.
Clause 57
Meaning of “occupier” in relation to land occupied by an operator
Question proposed, That the clause stand part of the Bill.
Julia Lopez
It is crucial that, where telecoms operators have apparatus installed on land, they can request new or additional code rights, allowing them to maintain, expand and improve their existing networks, improving service and connectivity, to the direct benefit of consumers. I hope we all wish to see that. At present, this is not always possible. There are some specific scenarios in which operators with apparatus already installed on land, such that they occupy the land, are unable to obtain new code rights or follow an existing statutory process to have an agreement that has run its course replaced by a new agreement, which I will refer to today as a renewal agreement.
For example, in some cases the parties might have an existing agreement that, for whatever reason, proceeds on a more informal basis and is not set out in writing, or otherwise does not meet the necessary criteria for it to be renewed under an existing statutory process. The operator is therefore still authorised under the existing agreement to keep their apparatus on the land, but under the current legislative framework cannot pursue a renewal agreement through an existing statutory process.
Kevin Brennan
The Minister says that the Government might revisit the clause, perhaps in the other place. If somebody who is operating equipment on the land is potentially deemed legally to be the occupier, under the provisions in the clause would the person who would then be asked to consult about further extending any arrangements be the landowner? Is that the assumption in the clause, in most instances?
Julia Lopez
As I said, this is a very complex and technical area. I do not want to provide the hon. Member with an incorrect answer, because this is one of the issues on which we are still in discussions with industry to ensure that we get it right. I believe that is the intention, but I will have to get back to him.
Kevin Brennan
Some inspiration might come to the Minister during the course of the debate. It seems to me quite an important question. I thought that what she meant was that, in an instance where somebody is deemed to be the operator on the land, because they have the equipment there, they obviously cannot grant themselves an extension of permission, and so it would be sensible for there to be a way to go to the landowner in order to achieve that further agreement. If that is not the case, that is quite important, because who will they go to in that instance? She said that if the landowner or interested party could not be identified, it would be people with a principal interest. What sorts of people would that be? Would it be the local community, or neighbours of the land involved? Even if she cannot offer an explanation now, it is quite important that the Committee at least has a grasp of what is intended by the clause.
Julia Lopez
This is tricky, because I wish I could provide greater clarity, but I cannot, which is obviously an unsatisfactory position to be in. In this case, I think the court would be approached to make a decision if the landowner was not in a position to grant those rights and they could not get a position out of the landowner. The intention, I think, would be for it to be decided at a legal level. I apologise that I cannot provide clarity.
Without the clause, there is a gap in the legislation that prevents operators who need code rights from being able to obtain them. This has potentially adverse consequences for consumers and businesses, with the risk of service disruptions and unnecessary delays in the delivery of improved capacity and enhanced services. As we all increasingly rely on digital services, it is important to address this situation. This is an area of active discussion, because we want to make sure we get it right. I believe it would be the case that, if the landowner were not in a position to offer the rights, the operator would go to the court to seek redress.
Kevin Brennan
I understand the difficulty the Minister faces, but it would be helpful if there was official support for her at times when technical questions are asked. It is important that the Committee gets a full explanation before agreeing to a clause. The sensible thing to do in this instance would be for the Government to revisit the clause—possibly on Report. It would certainly be of help if, by then, a clearer view as to the intention could be given to Members of the Committee and people interested in the Bill. I am sure there is a fairly straightforward answer to the question, so we should make note of the fact that it needs to be dealt with at some point.
Julia Lopez
I acknowledge that this is legally a very complex area. It is something that we have not entirely settled on, and it is under active consideration. We will come back to the Committee if we believe we have not got the policy intention correct. I am sorry that I was unable to address the hon. Member’s point in greater detail, but I am reluctant to provide information that might not be correct.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
Rights under the electronic communications code to share apparatus
Julia Lopez
I beg to move amendment 1, in clause 58, page 41, line 25, at end insert—
‘(4A) In paragraph 13 (access to land)—
(a) in sub-paragraph (1)(a), for “paragraph 3” substitute “paragraph 3(1)”;
(b) in sub-paragraph (2), for “paragraph 3” substitute “paragraph 3(1)”.
(4B) In paragraph 38 (right of landowner or occupier of neighbouring land to require removal of electronic communications apparatus), in sub-paragraph (3), for “paragraph 3(h)” substitute “paragraph 3(1)(h)”.’
This amendment is consequential on the amendment made by clause 58(2)(a) to paragraph 3 of the electronic communications code.
Julia Lopez
Clause 58 deals with the sharing of telecommunications apparatus between operators within the electronic communications code. It inserts a right to share apparatus into paragraph 3 of the code, which sets out a list of rights that are statutory “code rights.” The code rights in paragraph 3 must be conferred on an operator by an occupier or imposed by a tribunal. The 2017 code reforms introduced paragraph 17 automatic rights, allowing operators to upgrade or share their apparatus without the need for an agreement. Those automatic rights are separate from the paragraph 3 code rights and are subject to strict limitations.
Since their introduction, there has been confusion about the interaction between the paragraph 17 automatic rights and the paragraph 3 code rights. In particular, while “upgrading” is a paragraph 3 code right, sharing is not. Clause 58 addresses this by making apparatus sharing a paragraph 3 code right that an operator—the “first operator”—can request to be included in an agreement to which the code applies. Clause 58 also amends the statutory purposes in paragraph 4 of the code to include sharing activities.
Apparatus sharing is a cost-effective way for operators to extend their networks without having to build extensive infrastructure themselves, helping to deliver greater coverage, capacity and consumer choice, while reducing impacts on the environment and disruption caused by installation works. As with the other code rights, if agreement on rights to share cannot be reached consensually, an operator may ask a tribunal to impose the requested rights. In those circumstances, the tribunal will apply the public benefit test and the statutory valuation regime, as it already does for other code rights.
If the right to share is a statutory code right, the factors that a tribunal will consider in deciding whether such a right should be imposed—and if so, on what terms—will be the same as those for all other code rights. Including a right to share apparatus in the paragraph 3 code rights will therefore provide greater certainty for all parties and support smoother negotiations.
Code rights can only be obtained in relation to land. Consequently, the new right to share apparatus can be requested only by the first operator that is keeping apparatus installed on, under or over land. A second operator that wishes to share the use of that apparatus will not be able to request from an occupier a paragraph 3 right permitting them to do so. Instead, once the occupier has conferred such a sharing right on the first operator, the second operator will need to negotiate the sharing of the apparatus with the first operator.
The first operator’s right to share their apparatus will, like other code rights, be exercisable only in accordance with the wider terms of the agreement. It will therefore be important for the first operator to consider carefully any terms that it may need included in its agreement with an occupier, such as additional access rights, to enable any subsequent sharing of the apparatus with other operators. To that end, clause 58 inserts corresponding code rights for the first operator to enter and carry out works on the land for the purpose of such apparatus sharing.
Finally, it should be emphasised that the new right to share introduced by clause 58 is entirely separate from the automatic rights to share that are currently available under paragraph 17 of the code, and to the rights introduced by clauses 59 and 60. Those are automatic rights—subject to specific conditions—that do not need to be agreed with a landowner or imposed by the courts. The rights in clause 58 cover situations where the operator wants rights to share over and above those automatic rights.
Government amendment 1 is a consequential amendment that reflects the restructuring of paragraph 3 provided for by clause 58(2)(a) of the Bill. It replaces cross-references to paragraph 3 of the code with cross-references to sub-paragraph 3(1).
Clause 58 introduces rights to share apparatus to the menu of code rights that is currently set out in paragraph 3 of the code. In doing so, new sub-paragraph 3(2) will be inserted into the code, setting out who can obtain a right to share apparatus. The current paragraph 3 will therefore become sub-paragraph 3(1) of the code. As there are references to paragraph 3 in other parts of the code, consequential amendments are necessary so that anyone reading the code is referred instead to the new sub-paragraph 3(1).
Amendment 1 agreed to.
Clause 58, as amended, ordered to stand part of the Bill.
Clause 59
Upgrading and sharing of apparatus: subsisting agreements
Chris Elmore
I beg to move amendment 9, in clause 59, page 41, line 42, after “agreement” insert
“other than with a private landlord”.
This amendment, together with Amendments 10, 11 and 12, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Julia Lopez
I thank the hon. Member for tabling these amendments. I represent an urban constituency and, as the Minister for digital connectivity, I am very alive to any concerns about the digital divide. I have tested the legislation to make sure that we are not exacerbating that. The amendments relate to circumstances in which an operator can upgrade or share the use of their apparatus without specific permission from a landowner or a court order. Crucially, the amendments relate to rights that the Bill grants retrospectively to agreements that are already in place. The amendment seeks to expand those rights in circumstances where apparatus is situated on, under or over land owned by private landlords.
Retrospective legislation must take particular care to strike a balance between impacts on individual rights and any public benefit that the legislation aims to deliver. The Government believe at this time that expanding retrospective upgrading and sharing rights in the way these amendments suggest would not be justified. Upgrading and sharing electronic communications apparatus offers a wide range of substantial benefits. Those are benefits that the Government specifically recognised in their 2017 reforms, when limited automatic rights were introduced for operators to upgrade and share their apparatus. The exercise of the new upgrading and sharing rights was made subject to certain conditions. Those conditions were intended to strike the right balance between the rights of individual landowners hosting apparatus and the public benefits delivered by operators upgrading and sharing their apparatus.
The changes made in the 2017 reforms therefore permit upgrading and sharing to take place without a landowner’s specific consent only where any impacts on that individual will be limited. However, it was recognised that any use of those rights could have some impact, albeit very limited, on individual landowners.
Ruth Edwards (Rushcliffe) (Con)
I remind the Committee of the declaration of interest that I made: I have worked for a number of providers, including BT and techUK, that will be affected by the legislation, and I carried out cyber-security consulting for MHR last year. I agree with the Minister about the need to seek a balance between the rights of landowners and the rights of operators. However, we cannot lose sight of the fact—this is a point she has been making powerfully—that we must get behind upgrading our digital infrastructure as fast as is practicably possible.
I am aware that we are about to debate amendment 8, which would make it more expensive for operators to access land, and put them at a disadvantage compared with other utility companies. Does the Minister agree that adopting amendments 9 to 12—and then 8—would risk sending a mixed signal to the market? On the one hand we are making it more expensive and difficult for our operators to access land, but on the other hand we are rolling back the scrutiny that they have to access private property at the moment.
The Chair
Before I call the Minister, I will take this opportunity to say that interventions should be relatively short and to the point. It will not be difficult for hon. Members to catch my eye to make points in a debate if they wish to.
Julia Lopez
I thank my hon. Friend for her intervention. I know that she has considerable expertise in this field. It is a difficult balance to strike, ensuring that we are protecting landowner rights while making sure we are giving telecoms operators the powers they need to make sure all of our constituents have the digital connectivity that they demand—and will increasingly need—going forward.
For the reasons I have set out and will be setting out in further detail, I do not think the amendments will have the desired effect. It was interesting to hear the oral evidence this week, because there was no consensus among the telecoms operators about what powers are required. We have to ensure that we do not give commercial advantage to one player or the other, as that would also trample over some landowner rights.
The changes made in the 2017 reforms permit upgrading and sharing to take place without a landowner’s specific consent only where any impacts on that individual will be limited. However, it was recognised that any use of those rights could have some impact—albeit a very limited one—on individual landowners. The new rights were not applied retrospectively and had no effect on landowners who had entered into agreements before the legislation was passed. The key difference is that agreements made after that date would be completed in the knowledge that the upgrading and sharing rights would apply. Since the 2017 reforms, however, the public need for robust and up-to-date digital services has continued to grow, and was thrown into sharp relief by the recent pandemic, when many of us were reliant on access to those services at unprecedented levels.
Upgrading and sharing apparatus has a more important role to play than ever before. In the light of this and other market developments, we have revisited the position on upgrading and sharing where the rights introduced by the 2017 reforms do not apply. Introducing specific upgrading and sharing rights for such equipment can play an important role in improving coverage and capacity, and amendment 9 appears to agree with that conclusion. However, we need to ensure that the rights of individual landowners are adequately protected. As I said, agreements after the 2017 reforms will have been concluded in the knowledge that they will give rise to automatic rights for apparatus to be upgraded or shared. That is not true of apparatus that is not covered by an agreement concluded after the 2017 reforms. As such, it is only right that any automatic rights to upgrade and share those types of apparatus should be subject to different conditions.
The amendments suggest introducing specific conditions for retrospective upgrading and sharing rights where private landlords are concerned, and those conditions partly reflect those contained in the rights established by the 2017 reforms and those set out in the Bill. However, the conditions in the new rights that we are proposing have been carefully developed to work as a whole; they are intentionally more restrictive and give rise to more limited rights than those available for agreements reached before the 2017 reforms. Taken together, the conditions mean that the operator will have automatic rights only to carry out upgrading and sharing activity that will have no adverse impact on the land or that will put no burden on a relevant individual, but this will still allow activities, such as crucial upgrading work, to be undertaken in relation to historical copper cables installed underneath land.
Sally-Ann Hart (Hastings and Rye) (Con)
I wonder if the Minister could provide some clarity. Underneath the ground, there are ducts that operators can run cables through. We heard in this week’s evidence session about telegraph poles. Operators can go to the bottom of the telegraph pole, but will the Minister provide some welcome clarity on whether they can go up to the top and across? It is really important that they can use existing infrastructure and not have to pay to go around because they cannot use the overhead.
Julia Lopez
We are looking at rights that will provide easier access to underground and over, but not on. These are very techy points. If my hon. Friend feels that that does not answer her question precisely enough, I would be happy to ask officials to get in touch with her.
The measures in the Bill as drafted ensure that apparatus installed under agreements concluded prior to 2017 can be upgraded and shared quickly and cost-effectively. At the same time, the specific conditions that we are introducing will ensure that the right balance is maintained between the interests of private individuals and the wider public benefit, which is a difficult balance to strike. We are concerned that the amendments would not maintain that balance. I hope that gives the hon. Member for Ogmore assurance that the provisions in the Bill regarding retrospective rights to upgrade and share represent a balanced approach, and I ask him to withdraw his amendment.
Clauses 59 and 60 are vital clauses that support and encourage greater upgrading and sharing of existing apparatus. The 2017 code reforms provided operators with limited automatic rights to upgrade and share their apparatus, subject to certain conditions. However, the 2017 changes did not introduce paragraph 17 upgrading and sharing rights for subsisting agreements, which are agreements completed before the 2017 reforms came into force. This means that a significant proportion of the UK’s existing networks cannot be upgraded or shared without specific permission, despite the fact that apparatus can be upgraded and shared in many situations with no adverse impacts on any individual or private land.
Clause 59 therefore inserts new paragraph 5A into schedule 2 to the Digital Economy Act 2017 in order to introduce rights for operators to upgrade and share apparatus installed under a subsisting agreement. These rights differ from those contained in paragraph 17. They are available in more limited circumstances and will be subject to stricter conditions and specific notice requirements. Taken together, the measures in the clause will ensure that apparatus installed under a subsisting agreement can be upgraded and shared quickly and cost-efficiently, and do so in a way that takes into account both the interests of individuals and the wider public benefit.
Clause 60 deals with the same issue of upgrading and sharing apparatus, but in this case in relation to apparatus installed before 29 December 2003 where there is neither a subsisting agreement nor an agreement concluded after the 2017 reforms. It is right that upgrading and sharing rights should be available for all apparatus installed before the 2017 reforms came into effect. Clause 60 therefore inserts proposed new paragraph 17A into the code, conferring rights to upgrade and share apparatus installed under land before 29 December 2003, where the operator who owns that apparatus is not a party to an agreement under part 2 of the code.
Kevin Brennan
I have listened carefully to the Minister and I do not agree with the Government’s position on rejecting the amendment. She is right that large swathes of the Bill are about the difficult balancing act between private property rights and the public interest. It seems to me, in the case put forward by my hon. Friend the Member for Ogmore in support of the group of amendments, that this is an instance where the public interest is overwhelmingly clear, while the private property interest that the Minister defended in her response is not.
My hon. Friend put forward the problem that has been received by the Committee in evidence, which is that many blocks of flats are not updated with their internet connections and so on. There is a huge public policy interest in the digital divide, which we all know about across the country, and in ensuring that the people who live in those kinds of premises have excellent access—as good as someone living with the best infrastructure available in an urban setting. He mentioned the rural-urban divide, but I am talking specifically about the case he made about blocks of flats.
I think what the Minister was saying was that because what is being proposed represents a retrospective change, a higher standard should apply to protecting those private property interests than would apply in the case, for example, of equipment that was installed post 2017. That, however, does not make a jot of difference to a poor child living in a block of flats who does not have good internet access to do their homework. That is a pretty clear judgment for the Government to make, because they have made no real or clear case that any compelling property rights are being imperilled, or that there is any compelling cost—other than minor inconvenience, perhaps—to the landowners who might be affected by the amendment.
There is, however, an overwhelming public policy case for wanting to do everything possible to assist children living in such block of flats. There is an overwhelming public policy case that a child in that block of flats with pre-2017 infrastructure should not be treated any less equally or favourably than a child who lives in a neighbouring block of flats that happens to have equipment that was installed post 2017. I urge the Minister and the Government to rethink their position for those reasons, unless I have misunderstood their case.
Julia Lopez
I reassure the hon. Gentleman that we do not disagree with the ambition. We all want children in such blocks of flats and other difficult-to-reach premises to have excellent digital infrastructure. As the Member for an urban constituency, I certainly want that. We have been testing this extensively, from legal team to legal team of operators. Some operators tell us that the additional rights are not necessary to be able to access buildings in the way that they hope; others say that they are. As I say, we have been testing this. Some of the suggestions would give greater legal access to property than law enforcement has. We have to get the right balance and we have to test whether this proposal will ultimately speed up the roll-out.
Kevin Brennan
That seems to be rather a weak argument. If law enforcement were entering someone’s property, it would probably be to search it, make an arrest or something like that. A telecoms operator entering a property to install some cable is a very different proposition, is it not?
Julia Lopez
It is a difficult balance to get right, between having a roll-out and ensuring that somebody’s property rights are respected. If we are considering giving greater powers to an operator than to law enforcement, we have to ask whether that is necessary. Operators have told us that that is not necessary to get access and to increase roll-out. On balance, therefore, we are not minded to support the amendment.
Product Security and Telecommunications Infrastructure Bill (Second sitting)
Julia Lopez ExcerptsTuesday 15th March 2022
(2 years, 8 months ago)
Public Bill CommitteesRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 15 March 2022 - (15 Mar 2022)
The Chair
Thank you very much. Members of the Committee will ask you questions in turn, but we will start with the Minister.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
Q
Professor Carr: That is a very good question. In terms of international alignment, aligning these kinds of laws across jurisdictions is a challenge. I want to say from the outset that regulating emerging technology is understood to be a deeply problematic and challenging area. It is something that the UK in many ways has led on. A lot of thought leadership has come out of the UK on this. As David said, the work that has led into the Bill has been going on for many years in the UK, and has been funded by the UK Government through universities and industry. A tremendous amount of background work has gone on. There is the PETRAS—privacy, ethics, trust, reliability, accessibility and security—consortium, which was originally the cyber-security of the IoT consortium. We have worked on that for many years with David and others. The UK really has led on this. When we look at what is happening here and now, you would have to say that this is a country that is able to confront those kinds of difficult challenges and think about ways through them. No one is saying that it is easy; it will not be, but this is a very good start.
When it comes to looking at international alignment and the impact on industry, and particularly the manufacturers of these devices, there is already a lot of alignment. I have been doing some work through the World Economic Forum, where I am chair of the Council on the Connected World. On 15 February, we launched a global statement that spoke to the three initiatives that are being considered here, and an additional two in terms of IoT consumer devices. That statement has been endorsed by more than 110 organisations around the world, including Microsoft, Google, Qualcomm, DCMS, RISCS—my institute—and indeed David’s organisation. There is a tremendous amount of international support for these initiatives and more. A lot of them are big industries, so I do not think there is necessarily a disconnect between governance of emerging technology and what is helpful for industry actors; I think there is actually a lot of alignment.
David Rogers: I will just point to some specifics. There is work ongoing in India, Australia, Singapore, Turkey, and the US, and many of those countries—and many I have not listed—base their work on what was originally the UK code of practice. The UK’s code of practice was taken to ETSI, the European telecoms standards body, and was made into a European norm. That really, I think, has given the confidence for other countries to be able to adopt that as a scrutinised and good piece of work.
That is obviously not in isolation. ETSI is an industry-led organisation, and a lot of the work that has gone into that in advance, including through DCMS and NCSC, has been about looking at industry-based best practice. Organisations such as the GSMA worked on this in 2014, and, prior to that, in the smartphone world, have been building in hardware security and other measures, which have hardened connected consumer devices, so that work is certainly not in isolation. We are really standing on the shoulders of giants here, because a lot of the work is done; it is in endorsing good practice, and I think that is what the other countries are seeing, and they really have seen leadership from the UK in this space.
Julia Lopez
Q
David Rogers: I will address that. The beauty of the IoT is that there are all these fantastic things being developed. When we started to look at what we could do, and a code of practice, we wanted to ensure that we did not constrain innovation by mandating specific technical measures that might prevent some fantastic product being created. That is why we took quite a high-level outcome-based approach.
That also meant that it was measurable, even by consumers. If you look at the top three guidelines of the code of practice that have made it into the draft legislation, a consumer can look at those things, which I would call “insecurity canaries”. If you see that a manufacturer does not have a vulnerability disclosure policy—so hackers and security researchers, for example, cannot report things to them—that is a big red flag, and I would not be buying that product. It is the same if the product does not have software update support, and so on.
We took a proportionate approach to the code of practice, and I think that that also led to the industry endorsement of it. This morning, I heard the techUK gentleman saying it is not specific enough; well, actually, the ETSI EN 303 645 is quite specific, and the compliance specification that goes with it is even more specific. For some bad practices, I do not think that we could be more specific than saying “Don’t have default universal passwords”. We want to get rid of “admin” and “admin”. That is a ridiculous situation, in some parts of the market, that is unacceptable, and we must eliminate it from the market.
Julia Lopez
Q
Professor Carr: Just to say that we cannot anticipate all of the new devices that will come on to the market, of course. I think what David is saying is that it is necessary to have that kind of flexibility to adapt and accommodate those, as they come on to the market. However, it is really long overdue that we do something about this.
There are two types of security in these devices that we understand at this point, which need to be taken into account. The first is the security of the data that flows through them. Although they are very different devices, that is, in many ways, a common problem in securing data—particularly, of course, personally identifiable data. The second issue arising from IoT devices is that many of them have an impact in the physical world. That then begins to blur cyber-security with safety, and we have very different ways of approaching cyber-security and safety. What we tend to do with safety is test things, over and over again, until they break; then we know how they need to be built or constructed. That kind of homogeneity in an approach to design is very bad for cyber-security, because that is what gives us vulnerabilities across the whole landscape. Those are the kinds of issues that we need to grapple with. The devices themselves will continue to emerge and evolve, but the problems that we are grappling with now are common across devices, in a way. Legislation such as this will go some way towards addressing those problems.
Julia Lopez
Q
David Rogers: Yes, originally there was a “secure by design” committee set up with various companies—Madeline and I were on that committee. There were various discussions about the best way forward. I remember one suggestion being that all we needed to do was to educate consumers. After I banged my head on the table quite a lot, I think that in the end we realised that it should not be on consumers. They are not the ones who are creating the insecurity in the product and they are not in a position to do anything about it either—they are mainly victims. It was recognised that a lot of those issues have been in products for many years; I go back to the default password issue, but there are many issues around things such as lack of support for software updates.
I drew up the original code of practice and worked closely with National Cyber Security Centre and the Department for Digital, Culture, Media and Sport. I also worked with academia and the security research community, who are hackers from around the world who have been campaigning for those issues to be dealt with for years, because they are seeing it directly in their work. We spent a lot of time getting it right; we worked at the Information Commissioner’s Office on some of the elements related to GDPR.
A voluntary code was published in 2018. However, manufacturers were put on notice at that point. By 2018, it was made public that this was the expectation; we expected the industry to improve. Some quarters were probably already compliant; you heard from Dave Kleidermacher this morning, who led the way in security improvements on mobile devices—from their perspective a lot of the stuff in the 13 requirements was already done. However, many parts of the industry have done nothing. It seems to me that they are quite happy to sit back and do nothing. That is why I think this work is necessary; there is a need for the big stick of enforcement, to be honest with you. They have been given plenty of chances, and not just since 2018—it is since the 1990s. It seems acceptable to them to carry on doing the same things that they have always done, such as buying in the really cheap software that is completely open and has old protocols and legacy issues that should have gone years ago. I am entirely supportive of taking action now— they have been given enough time. They should not wait for the 12 months—or whatever it is—for certain things to become mandatory. They should be doing this because it is the right thing to do for their customers.
My company carried out some research for the IoT Security Foundation on vulnerability disclosure. Again, that is something that is very visible; you can go to the website and see whether that company is open to security researchers and hackers reporting security issues to them. There is then a process that has been ISO-defined since 2014; it is dealt with and then the issue is made public once it is fixed so that consumers are secure. We discovered that about one in five of the companies that we surveyed—there were about 330 companies from around the world, representing thousands of products—was actually providing that to security researchers. That means that four in five IoT manufacturers did not have any way for security researchers to contact them. That is totally unacceptable, so we do need to take action. The companies have been given enough chances.
Julia Lopez
Q
Professor Carr: I think the element that will impact consumer decision making the most will be the length of time for which the product will be supported. I remember having the conversation in a room in DCMS all those years ago about how we could possibly be expected to spend £1,000 on a phone that will not work in 18 months, that the company knows will not work in 18 months—it will not be supported—and to not have access to that knowledge. This is not just about putting labels on things; it is about the fact that we could not find out even as an informed consumer. I think the length of time for which the device is supported will have a major impact on consumer decision making and probably more than the other two things, because a lot of people do not care about passwords and a lot of people do not know what a vulnerability disclosure agreement is or what that means. Knowing for how long the device will be secure is like having an expiry date put on it.
That is an example of where a kind of market driver can impact consumer decision making, but one of the things that we know about cyber-security more generally is that, very often, market drivers do not work in this space. There is not really, to be honest, all that much of a market for cyber-security, as people do not really care about that. That is why we need to think about moving beyond the dominant narrative over the last 50 years that Governments stifle innovation. Even if we go right back to the beginning of digital technologies and the ARPANET and DARPANET, those things were wholly supported by the US Government. They were funded by the US Government; they were invested in by the US Government for decades before the private sector came on board. So there are these points where it is absolutely necessary for Governments to be involved and for governance to happen, because we cannot see the future. If people begin to lose confidence in these devices and they begin to fear—“I don’t want my child to have something like that. I don’t want Alexa in my house. I don’t want people listening to my conversations etc.”—all the incredible benefits that we can extract from those technologies will go by the wayside.
I will give just one very clear example of this. If you think about the huge effort that the banking sector put into making sure that people felt confident about banking online, spending money online and tapping their card—“When something goes wrong, the bank will take care of you”—the reason, the logic, behind that was that if people began to think, “It’s not safe to bank online; it’s not safe to use my card in these little shops,” they would stop doing it. It was that investment in regulating it, locking it down and making sure it was safe that has allowed us to get to this extraordinary situation where you can walk around with no wallet and just a phone. It is that thinking that is important now.
David Rogers: I think the transparency point is fantastic. This work is not done in isolation. There is lots of work going on about lengthening software updates for lots of types of products, and there are different regulations happening in Europe and so on. Consumers should not have to know about the details. Madeline has said this. They have an expectation, a very reasonable expectation, that they will not be arbitrarily hacked into. We have all read the stories about things like baby cams being hacked into. That is totally unacceptable, because at the end of the day the company that created and sold that product that was insecure at the time it was created is responsible for it. Of course, they did not hack into it, but they left all the doors open, and they sold that product and made money and profit from it.
Yes, I believe that consumers should know that they are being looked after, and the length of time that that is provided for helps them to make an informed decision—it is a free market. Also, security should not be a luxury for the rich. You should not be required to replace your iPhone, for example, just because the support ends. At the end of the day, we are all impacted by security issues. The Mirai attack, for example, was an extremely large distributed denial of service attack, which basically took down large parts of the internet. It was all those small IoT devices, routers and things that had been taken over. The attack did not discriminate between who had those devices, those older devices or whatever, but the impact and scale of that attack was the problem.
That is why we need to ensure on an ongoing basis that, as the technology develops, we can put new requirements through the standards bodies and endorse them. This is the start of that lifecycle, to ensure that those products do not enter markets like the UK.
Chris Elmore (Ogmore) (Lab)
Q
In that vein, is there something in the idea of a reporting mechanism—either by the Department or some sort of regulator, annually or however long is appropriate—for whether these organisations and manufacturers are working to the standards that you so strongly set out? They have had years to deal with the standards, but many are still not doing it. I am suggesting naming and shaming, if you will, to give consumers better informed decisions.
A lot of people borrow money to buy these devices. On Second Reading, I expressed a concern that many people will look in a retailer or online, and go, “If that doesn’t exist for this much time—if it only has two years on it and the loan is three years—why am I bothering to purchase it if it is obsolete in that time?” That is a concern that many people have. Consumers potentially do not know what this or that means, but they know what “security” means, and if they think something is not secure, then, as Professor Carr mentioned, they think, “Well, I won’t bother having that product, because it isn’t safe”, because that is how they view the word “security”, which is logical, but not necessarily the best option given what they are looking for. There are several questions in there, forgive me, but they are interconnected with what the Minister was saying.
Professor Carr: I will try to answer as many as I can, as well as I can. I am sure that David has comments as well.
On educating consumers, that question of “Will the loan outlast my device?” is a very astute one, because consumers do not need to understand—they never will—all the ins and outs of phone or device security, but that is a very pragmatic response: “What actually am I buying? I am spending for three years to buy two years of a phone.” That type of consumer education will snowball when people are presented with information on how long the device will last and asked, “Is that what you want?”
I guess online markets are already regulated. There are things that we cannot buy in the UK and that cannot be shipped here. It would certainly have to be a consideration that, ideally, devices that did not meet UK standards were not able to be shipped to the UK, but I guess that is the case with many consumer goods that we cannot buy online. There is a tendency to blame business in this scenario and to see manufacturers as careless or irresponsible, which surely some of them are. However, it is also the reality that businesses have to make a careful calculation on how they invest. If it costs more to produce a product and they are answerable to shareholders, they have to have a conversation about why they are spending more on a device that is already selling well and returning a profit. I am not saying that that is the way it should be, but that is the way the free market works.
Look at what happened with GDPR. In my work, we work a lot with senior business leaders and talk to them about how they respond to cyber-security regulations. They did not push back against GDPR or see it as terribly negative; they saw that it unlocked budget for them to use, because they could quantify what percentage of their global turnover a data breach would cost or what the fine could amount to. They can take that calculation to the board, and say, “Right—we mustn’t have a breach or it would cost this much. How secure do we feel we are?” That is where such regulations can have a very positive effect on industries that would like to comply but cannot just invest in all the different aspects of a device without some justification. This gives that justification. It unlocks that funding in those board conversations about where investment in products should go.
David Rogers: Just to address the Amazon/eBay question, I have seen all this stuff. I have bought some of it to have a look at. A lot of counterfeit and substandard—the Chinese call them Shanzhai—products are available. I have conversations in which people say, “This is about buyer beware. You’d never buy a £9.99 smart watch. You should know that that’s going to be dodgy,” but as you said, people cannot necessarily afford it. There is a peer pressure element to it, and there is a sort of endorsement by the brand. If you go to Amazon, you expect it to be a quality product, so people are lulled into that sense of security that what they are getting is quality. In some cases, that is not the case. I fully agree that the companies that are retailing this stuff cannot just lay the blame at the door of the companies that are stocking and selling it. If it is on Amazon Prime, surely Amazon has a responsibility over that.
Earlier, Dave mentioned different regulatory regimes and that there may be some fragmentation around the world. I actually think that there is probably a lot of alignment and harmony. There has been a lot of work between DCMS and the National Institute of Standards and Technology in the US, so there is a broad understanding of what good looks like. If, either through some self-declaratory measure or by some endorsed mechanism of compliance, those companies are told to come up with a compliance statement, that helps the likes of Amazon and eBay to select their suppliers appropriately and then to remove them from their stores more easily. At the moment, it is kind of a wild west. They do not have any questions or answers.
The Chair
Good afternoon. We will now hear oral evidence from Catherine Colloms, MD for corporate affairs at Openreach; Simon Holden, the group chief operating officer at CityFibre; Mark Bartlett, director of operations at Cellnex UK, appearing on behalf of Speed Up Britain; and Juliette Wallace, also of Speed Up Britain.
We have until 3.40 pm for this session. Will the witnesses introduce themselves briefly for the record, please, before I turn to the Minister? We will go left to right.
Simon Holden: I am Simon Holden. I am the group chief operating officer of CityFibre.
Catherine Colloms: I am Catherine Colloms. I am the corporate affairs director at Openreach.
Mark Bartlett: My name is Mark Bartlett. I am the operations director at Cellnex UK, representing Speed Up Britain.
Juliette Wallace: I am Juliette Wallace. I am the property director at MBNL, which is a joint venture between EE and Three. I also represent Speed Up Britain.
Julia Lopez
Q
Mark Bartlett: On behalf of Speed Up Britain, we very much believe that the changes proposed in the Bill are needed to speed up the roll-out of digital connectivity across the country. Therefore, we believe that changes are required.
In that sense, though, we need to look back to before 2017 to understand the policy behind the changes originally made, and to understand that those were made in order to achieve the outcomes that the Government were already trying to establish. Without the changes in the policy of 2017, this ambition will not be met. Speed Up Britain continues to support the policy ambitions as laid out in 2017, but the fact is that the law as put down at the time is not working and created loopholes, which have been exploited, and that has meant that we have been unable to proceed at the pace we wanted.
Catherine Colloms: To give you a bit of context, Openreach is the national broadband network. We are in the process of upgrading the existing network, which is a hybrid copper-fibre network, to a new full-fibre network. The ambition is to build 25 million full-fibre homes and businesses by the end of 2026. That is a hugely ambitious target. It underpins the Government’s 85% manifesto commitment, but we have to get to a ramp of building 4 million premises a year.
We are currently building at 50,000 premises a week, so we are heading up towards the 3 million a year kind of ramp, but from pretty much a standing start in about 2017, as there was very limited full fibre in the UK at that stage. We had finished building the old network and had not transitioned through. It is a really serious challenge. If you think about the pace of build and what we are trying to achieve, being able to do things really rapidly and operationally simply becomes incredibly important.
For us, the two big pieces that the Bill can potentially help us with enormously and help supercharge that fibre build is around access, that is access to multi-dwelling units—the approximately 6.1 million blocks of flats in the UK—and access to rural parts of the UK. There are some urban as well, but if you think about how we build, we have a duct infrastructure but we also have a very extensive pole infrastructure. For most of our rural build—we have committed to building 6.2 million commercial rural, which goes beyond the Project Gigabit programme that the Government are talking about to the hardest-to-reach areas—we are going to have to do most of that over our existing pole network. At the moment, the Bill makes some changes that are helpful and which progress us forward by allowing us access to upgrade our current infrastructure on underground ducts. What it does not do is allow us to upgrade the infrastructure we have in place, either over the pole network or in those blocks of flats.
If you think about what we have in place today, we have our existing network, so we have the ubiquitous either copper or hybrid copper network that is there today in pretty much all of these premises, all across our poles. We are trying to upgrade that network to full fibre as rapidly as possible and to do so, it would be incredibly helpful if we were able to upgrade our existing infrastructure. The Bill at the moment allows us, as I said, to do that through underground ducts. It is not going to allow us to get into either MDUs to upgrade more rapidly—we estimate that something like 1.5 million MDUs could be at risk based on our experience of unresponsive landlords and our inability to get in—and it also does not allow us to automatically upgrade our property and the infrastructure that we have over the pole network.
To give you a bit of context, we have 1 billion metres of cable over poling at the moment. The vast majority of the rural network is served over poles, so for us it is really important to be able to deliver those 6.2 million commercial rural, but also potentially the Project Gigabit programme. We have been working in Scotland on the R100 programme—the “Reaching 100%” Scottish Government programme. We need one wayleave for every 16 premises, to give you the sense of scale. We are finding the ramp very challenging and because of the scale and pace that we are trying to build at, what we really need is ease of access, ease of upgrade and that is the opportunity we think with the Bill.
Simon Holden: I think we are talking about two different sets of infrastructure here, which is worth explaining. We are talking about mobile and then we are talking about fixed-line fibre access. CityFibre is rolling out a fibre access network, mostly to consumers in the home. We are doing that across a footprint of 8 million households in the UK. The reason I wanted Catherine to go first is because we are utilising Openreach’s duct and pole infrastructure for three reasons. First, because it will allow us to go faster because we do not have to dig up the streets and lay ducts ourselves or put many more telegraph poles down. Secondly, because we are reusing and so can lower our cost, which means ultimately lower prices for the consumer. Thirdly, because it is just much more environmentally friendly if we can reuse those assets.
We are in favour of that, but at the moment we have this split between pre and post-2017 access. Our view at the time was that that made a lot of sense. Five years on from that now, it is a somewhat arbitrary split. So we think dealing with that is the right thing to do. In particular, the draft Bill’s proposals on ducts look fine to us. We would echo the point about poles. For us, poles are really important in rural, but also in Scotland. It turns out that in Scotland there are a lot of poles sitting in people’s backyards and just being able to access those to put our infrastructure on means that we can accelerate getting fibre access to all those homes. In our footprint, there are probably up to about 200,000 homes that we can access quickly if we can get that right, so we think that there is a real advantage to doing that.
For us rolling out fibre, there is a balance that you have to have here between access all the way through into the home, back to the public domain where, as a code operator, we can build in the public domain. I think we would say that our experience of getting landlords to come to the table is mixed and that the alternative dispute resolution mechanism proposed here is a good one to push that timetable down, so we can get to an answer.
I would also say, however, that when we get into the home, into a block of flats, the tenants really want the service. We have found that, once we have got the landlord and the landlord has given us the wayleave so we can connect into the front door of the block of flats, then wiring up inside is not particularly an issue. We are concerned a little with somehow grandfathering old wayleaves inside buildings, first because it does not seem balanced, but also because it will entrench the people who have those, which I would say is mostly Openreach.
In trying to promote competition and accelerate growth—to your question earlier, Minister, about whether growth has accelerated—the answer is that growth has clearly accelerated in rolling out fibre. That is absolutely happening. We have vibrant competition now, with billions of pounds being invested in this sector. Here is an opportunity to make it go faster, for us all to benefit with a frankly lower-cost solution.
We feel that what is on the table with that landlord dispute resolution mechanism is good. We do not feel that we need to go inside the building, frankly because once tenants have access to it, landlords are more than willing to give that connectivity, because they have happier tenants as a result. We have not found that that is a real impediment to us.
Julia Lopez
Juliette, did you want to add anything? You do not have to.
Juliette Wallace: I was not going to add any more to what Mark said on behalf of mobile.
Julia Lopez
Q
Mark Bartlett: Speed Up Britain represents the MNOs: Cornerstone, MBNL, Cellnex, which is a towerco, and DMSL, WIG and the industry as a whole. I will put some facts, some numbers, on the table to help us understand what we are doing.
Since 2017, we have completed about 1,000 agreements, of which 85% have been consensual and reached without any recourse to any of the processes associated with the legislation. Over and above that, 14.5% approximately required some form of exchange of letters of notice, but then moved quickly to agreement, and only 0.5% of any of those discussions ended up in the tribunal. In my experience, those that ended up in the tribunal have been the industry—us—versus the industry, or land aggregators, to be blunt.
The facts speak for themselves. In the main, as an industry, we run over 30,000 towers, which are visited frequently in order to upgrade, to maintain and to support the connectivity of the country. We do not see a landowner community, a landlord community, our partners as such, in a wall of non-co-operation, but almost the opposite. We speak to our landlords very frequently, we interact with our landlords very frequently, and therefore I do not recognise the characterisation as stated this morning.
Catherine Colloms: I am happy to talk from a fixed perspective. Generally, we have pretty good relationships with a large number of our landowners. Fibre and the copper and duct infrastructure we have is not a revenue generator for most landlords. You will have heard Charles Trotman this morning, from the CLA. We have agreements and rate cards, which were negotiated with the CLA and the NFU. We work closely in particular with those kinds of rural players to ensure that we have those in place. They are very effective and seem to work very well.
Just to give some kind of context for fixed, we do not tend to have these kinds of disputes, to the extent that you are not going to make a ton of money, frankly, by having a few poles on your land. A pole rental is between £10 and £20 a year, so even if you had a couple hundred poles, which would be unusual, that would mean only a couple of grand. If you think about ducting and cabling going through, that is anything from 19p to 49p a metre, so it is not a revenue generator per se. For us, the conversation with landowners is predominantly about access.
To Simon’s point, we find that we do have quite a lot of issues when it comes to MDU access, especially given the scale at which we are trying to build. We obviously have a machine of people who sit behind to try to negotiate, wherever possible, consensual agreements or wayleaves, but we would genuinely need an army of people to try to get stuff done.
For example, some of you will know that a couple of years ago we fully fibred Salisbury, which became one of the first full-fibre cities in the UK. We tried experimenting to test the limits of access and find out what would or would not be a problem with the roll-out. After two or three years of really concerted effort, including with John Glen, the local MP, being super-supportive and with loads of local PR, we could still get into only about 79% of MDUs, because of non-responsive and non-communicative landlords. If we were to scale the MDU team that we had for dealing with the amount of time it would have taken to tackle those unresponsive landlords, we would effectively be scaling from a team of about 17 to over 300.
As Simon says, the ADR processes are helpful predominantly when there are larger landowners, such as housing associations or local authorities. They are less helpful when it comes to the hundreds of thousands of wayleaves that we need in order to get into all the individual MDUs. That is why we think that the ability to upgrade the existing infrastructure, and therefore to give tenants the connectivity they deserve, is still the right mechanism to try to ensure that we can get the upgrade as quickly as possible.
Juliette Wallace: We do recognise, as the operator side of the industry, that in the very early days of the code—early 2018, for instance—the interpretation that we were trying to explore may have been a little too over-enthusiastic, shall we say. A lot of time has passed and we have learnt from that. I think that a lot of the examples that are provided to try to support the allegation of a David and Goliath approach are from very early in 2018, and they do not exist today. I think that we have moved on a lot, but we cannot be stuck with all the allegations of the past as well.
I do not agree that the David and Goliath approach is correct. As Mark said, to the extent that it is, what we are finding with the tribunal element of the approach is that it is actually industry arguing with industry; it is not small farmers, necessarily, who are behind that negativity. It is not David and Goliath; it is Goliath and Goliath.
Julia Lopez
Q
Catherine Colloms: The current target of 25 million full-fibre premises by 2026 did bake in some assumptions about access, particularly in relation to the upgrade rights in clauses 59 and 60, through MDU and through poles. On the impact of not having it, I think there is a kind of overarching impact. If you think of the challenges of the build and the scale of what we are trying to do, the harder it is to build and the slower it is, the less we can do. We are having to re-phase and re-look at the build that we are currently targeting, as a result of potentially not getting some of the elements in the legislation.
If I take the MDU point in particular, we have re-phased some of our MDU work to the back end of the 2026 target, the reason being that at the moment we just feel we are not going to get the access. As I said, our experience is that up to 1.5 million of those total 6.1 million MDU premises will be at risk. We are seeing that in a day-to-day aspect as we build, so we have re-phased 300,000. That will go to the end of the build, which means it does not count towards the 2025 manifesto target. It will still be planned within our build, but I think what will happen is we will just have to build different bits.
When we are building this rapidly, we cannot afford to sit and wait—wait to negotiate a wayleave, wait for an unresponsive landlord to come back, wait for an ADR process. Even though we have some of these mechanisms in place, we frankly do not use them, because there is not the time and we do not have the scalability to be able to wait for all these landlords, so while we are trying to build at such pace and scale, we effectively move on. What will happen in the short term is that we will still aim for our big 25 million target, but you will get a different mix, and we are already seeing that you will have less MDU in the mix. Obviously, the concern with that is that MDU is often urban and is often local housing or in more deprived areas, so there is a risk of creating a new digital divide—in particular, if you happen to live in a block of flats versus not—because of the access issues.
On rural land, we have this ambition to get to 6.2 million. Effectively, the way that we plan and build the network is we will pick an exchange, and we will survey that area and have a plan to build, but if we cannot get the wayleave, we will not build to the village that is beyond the wayleave. We will still get to our target, but you will get more pockets left behind in different places as we build, because instead of being able to build to 80% or 85% of an exchange area, one landlord might potentially be blocking the access that gets you to the village that is over there. If you cannot cross the land, the expense of having to circumvent it and go all the way around it means that that village build is prohibitive.
The Chair
Can I ask witnesses to please keep their answers shorter? I have had a number of Back-Bench Members already indicate that they want to come in.
Catherine Colloms: Sorry. I think it just changes the mix, effectively.
Simon Holden: I might just add that if Openreach is the Goliath and CityFibre is the David—certainly in rural—we would like to go into rural. This would be really helpful for us in order to make sure we can move at speed and at a sensible cost, and take advantage of the opportunities the Government are providing to accelerate growth there, so we would be in favour of that.
Juliette Wallace: On the mobile side, you asked about rural connectivity. Predominantly, that is going to come from new sites, and the code is actually working quite well with new sites—new land build-out. Our biggest challenges come from renewing the agreements that have expired on existing sites. That is where we need the changes in the code that this Bill addresses, and also the amendments to how the Bill is drafted so that it actually addresses the Government’s ambitions that came out as a response to the consultation.
Julia Lopez
Q
Till Sommer: Yes, sure. The Bill basically does three different things: it is access to third-party land in rural areas; it is the alternative dispute resolution mechanism on a voluntary basis; and the third area is upgrade rights. Upgrade rights, as you heard from the previous panel, is one area where there is slight disagreement because, depending on how you fix that, it might give one set of providers a competitive advantage over the others. For that reason, I do not want to go into too much detail there.
At the basic level, we want more upgrade rights, because it helps to use the infrastructure that is already there, rather than digging up the road again, putting up new telegraph poles or, as was said, just not doing something at all because the money is not there to build in that area if you cannot reuse the infrastructure. Beyond that, I do not want to go into too much detail, or I will get into trouble with my members and they will all talk to you separately.
I will take the other two areas, including access to third-party land. We have a few members who are specifically focused on rural areas. They are effectively going at the moment where Openreach does not have a strong build. They are very ambitious. They have told us quite early on that this Bill is game-changing for them. Access to third-party land in rural areas is simply the one thing that will unlock additional properties in their roll-out plans.
The reason for that is that this part of the Bill effectively mirrors something that was done a year ago for multi-dwelling units in urban areas, because it looks at a problem that our members face; I will use a very simple example. Let us say they want to reach a rural hamlet and there are three routes to it—one across a farmer’s field, one across a railway line and one across a hilly area. The most economical route is across the farmer’s field, but that field might be owned by someone who is not living in the UK, or who does not look at their emails or their post; that farmer just does not respond. At the moment, there is no mechanism to get any sort of forward movement in that situation.
So, what happens is that the provider either moves on, because they decide that it is not economically viable to take one of the other routes to that hamlet, or they say, “Actually, no, we do go across the railway line, but we descope parts of the hamlet. The money just isn’t there any more to connect every single house. It’s still economically viable to go there, round the field, but it doesn’t quite reach the whole village.”
Third-party land access provides a mechanism to get access to wayleaves, or access to land, for a limited period in those very limited circumstances. That will unlock those properties that at the moment are at risk of missing out. I am sure some of you will have seen in the past an announcement from a broadband provider—you might have even done a press release with them—saying that they are building out to x number of houses in the constituency. Then, after two years—after the roll-out programme is done—the number is not quite there. Quite often the reason for that is because the build has been more difficult than expected, there have been unresponsive landlords and the money that was allocated for that area does not quite match the ambitions.
It is worthwhile keeping in mind that roll-out is privately funded. There is Government support for the hardest-to-reach areas and we appreciate that, but outside of that it is privately funded infrastructure, with a return on investment over 20 or 30 years. We need to make an investment case. The companies, our members, need to make the investment case for their investors, for their shareholders and for their owners, that they will at some point get that money back. That is why we sometimes need to make those difficult decisions where stuff is being descoped. That is why the Bill is so important; it helps avoid those areas and unlock that bottleneck.
I mentioned alternative dispute resolution; some of our members are a bit sceptical about it, and that is largely because they roll out on a very large scale. Having to deal with thousands and thousands of ADR processes can be quite daunting, time-intensive and costly. For that reason, we believe it is good that it is done on voluntary basis, with the clear incentive provided in the Bill that the tribunal will take ADR into account. It will help a lot when it comes to negotiations with large landowners; that can include local authorities, where our members often have to negotiate a headlease or a head wayleave agreement. That can be super-complicated, because there is part of the local authority that is really keen on getting broadband, but the people dealing with the wayleave stuff do not really care because it is not in their portfolio. There are then mixed messages coming from the local authority. On the one hand they are saying, “Can you please roll out broadband as quickly as possible,” but on the other hand there are people saying, “It takes another year to negotiate the agreement.” ADR will be really useful to make progress in those very large wayleave cases.
Julia Lopez
Q
Till Sommer: Yes, that is exactly right. If you cannot use existing infrastructure but you are still going to roll out the network, you need to dig up the roads. I assume you have all received lots of letters about roadworks and the problems that they cause. You either dig up the roads or put up new telegraph poles, which is more expensive and is another element of visual impairment and disruption. For that reason it is much more economical—and from a visual aspect, less intrusive—to reuse existing infrastructure.
Julia Lopez
Q
Till Sommer: We do. Basically, a key bit that our members provide to your constituents—their customers—is a router, plus other equipment, that is classed as an internet-connected device under part 1 of the Bill. We are in regular contact with your civil servants on that, to clarify timelines and how the Bill might bite. We do not have any concerns about the idea. We support the idea of the Bill; it is more about the implementation, and ensuring that the supply chain is aware of the new provisions that are coming in.
I have heard from a lot of our members that they have started to talk to their supply chain to say, “By the way, in a year, or in one and a half years, depending on when the Bill will be done, we need to ensure that your products comply with these rules.” Because a lot of the manufacturers are overseas, they are not yet aware of them. Anything that can be done to raise awareness among consumer product providers would be welcome. There are a couple of other bits that go very much into the detail around associated software, when it comes to parental controls, which could be affected. I am happy to write to you on that if you want, but we will talk with the Department about it anyway. It is very much nitty-gritty stuff.
Chris Elmore
The Minister took my last question on part 1, so I am happy to give my time to Back Benchers.
The Chair
Good afternoon. We will now hear oral evidence from Rocio Concha, director of policy and advocacy at Which? and Jessica Eagleton, senior policy and public affairs officer at Refuge. We have until 5 o’clock for this session if needed, but as we have started ahead of time I am sure that nobody will mind if we finish ahead of time. Please could the witnesses introduce themselves for the record? Then I will turn to the Minister to ask the first question.
Rocio Concha: I am Rocio Concha, director of policy and advocacy and chief economist at the consumer group, Which? Thank you for the invitation to provide evidence. The Bill is quite important for consumers. We have been very supportive of the work that DCMS has done in the Bill. That is very good, and I hope that I will have the opportunity to explain how the Bill can be improved to achieve its objectives.
Jessica Eagleton: Good afternoon, everyone. Thank you for inviting me to give evidence. I am Jess Eagleton, senior policy and public affairs officer at Refuge, which is the country’s largest specialist provider of gender-based violence services. We provide a host of services including refuges, community outreach and a specialist tech abuse team. I am here today to speak to you about technology-facilitated domestic abuse.
Julia Lopez
Q
Jessica Eagleton: Of course. The first thing to say is that we are seeing technology-facilitated domestic abuse becoming ever more prevailing. Technology in all its varieties is providing domestic abusers with a host of new means and methods to perpetrate abuse—to monitor survivors, track their whereabouts, harass them and stalk them—so much so that, as I said, we set up a tech abuse specialist team a couple of years ago. Of the women and children who we supported last year, 59% said that they experienced abuse involving technology, so we are seeing a growing threat.
The specific devices that we are talking about, which are covered by part 1 of the Bill, offer a whole host of ways for abusers to abuse. I am thinking about home security cameras and home security devices such as doorbells, which provide almost 24/7 oversight of a survivor’s movements in the home. Camera and microphone functions can be used to listen in on survivors and capture intimate images without consent, which can then be used later to threaten and coerce the survivor. There are also things such as smart plugs and smart thermostats, which can be remotely accessed and used to frighten survivors—for example, by turning alarm systems on, or putting blaring music on, in the middle of the night. That is happening in the relationship and after it as well, so we are seeing remote access being used in that way.
Some of our concerns about devices relate to access. Thinking about the power imbalance in a domestic abuse relationship, it is the perpetrator who often sets up such devices. They have the password and full admin access, which means that the survivor therefore has limited ways to access a device. We have had some difficulty when talking to companies to try to support survivors to take back control of devices, particularly once a relationship has ended and a survivor has fled. Where they have devices in their home to which the perpetrator still has full admin access, it is particularly difficult to get companies to override that. That is something that we would welcome further work on, in terms of companies taking steps to support survivors to make changes to settings.
Julia Lopez
Do you have anything to add?
Rocio Concha: Your question was on whether the Bill will help consumers to understand these issues, and it will. As you know, one of the principles in the Bill is transparency—when you buy these products, you will know for how long they will be supported. That will help with awareness. There is a lot more that can be done to raise awareness of these issues. There is a limit on what consumers will know about how to protect themselves, so the direction in the Bill about banning default passwords is quite important, as is the point of contact for security vulnerabilities.
Jessica has explained very clearly the harms. There is an opportunity for the Bill to be more assertive. At the moment, the Bill says that the Secretary of State “may” include baseline security requirements. We know that these are not the right baseline security requirements, so the Bill should be clearer that they will be included. We also think that the Bill needs to list the three security requirements, which would give a clear steer to the industry that they are to be introduced. We are worried that the Bill as drafted could lead to more delays in introducing things.
If we want the Bill to achieve its objective, we must be careful to ensure that online marketplaces are within scope. I would argue that they have to be because, as a consumer, it makes no difference whether you buy your smart product on the high street or from Amazon, eBay or AliExpress; you assume that the product is compliant with the regulations in the UK, so it is important that the Bill also covers that area. Otherwise, you know where the bad actors will go—they will be selling insecure products on those online platforms.
Julia Lopez
Q
Rocio Concha: On enforceability, if you do not include online marketplaces, you are leaving a big gap, because these products can come from any country in the world when they are being sold in these online marketplaces.
Another area that is not clear in the Bill is how consumers can get redress. As part of the transparency requirement, suppose that you buy a product that says that it will be supported with security updates for four years, but two years down the line, the manufacturer decides to change its mind and to support the product for only two years. Where would the consumer go in that instance? They bought the product on the basis that it would be supported for a set amount of years.
The other thing that is not clear is who the regulator enforcing this will be. Obviously, we need to make sure that the regulator has the skills, powers and resources to enforce it.
Chris Elmore
Q
Jessica Eagleton: Perhaps I can take your second question first. You are right that we are seeing concerns about these types of products being used to stalk and to monitor. In terms of concrete measures and what the Bill can do in this respect, we welcome some of the security requirements, particularly around the vulnerability disclosure scheme, as a step forward. For example, in the work that we do to support survivors, having that public point of contact and an easily contactable place for a company to go, when we are reviewing these products and putting forward recommendations to companies, is definitely a step forward.
We would have some concerns about situations where companies might publicly disclose security flaws and perhaps not take steps first to address them. We have that concern because that could, in essence, alert an abuser to a new way to abuse a victim. It could alert them to a device that they could purchase or that is already in their home that would provide a new way of compromising, so we would like to see companies taking all reasonable steps to address and action some of these security flaws before there is that public disclosure.
On your second point about services, our tech abuse team is a unique service in the country in providing specialist frontline support to tech abuse survivors, but it is a chronically under-resourced service. Perhaps in the context of this Bill, we would really like to see thought given to a percentage of the fines that the regulators collect for non-compliance by companies going, for example, to fund some specialist support services. I think that would fit within the wider ecosystem of enforcement as well. If we have specialist services that survivors can go to and ensure that they are sustainably funded and able to support survivors, that would contribute to the wider enforcement regime and awareness.
Product Security and Telecommunications Infrastructure Bill (First sitting)
Julia Lopez ExcerptsTuesday 15th March 2022
(2 years, 8 months ago)
Public Bill CommitteesRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 15 March 2022 - (15 Mar 2022)
The Chair
Thank you. Let us move first to the Minister to ask any questions that she may have.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
Q
Anna Turley: Thank you for meeting us to discuss our campaign. I should have mentioned at the outset that we represent all the site owners around the country who host telecoms communication infrastructure on their land.
I am afraid that we are not seeing the same tailing off of difficult cases; a number of cases are continuing to come to us where leases are up for renewal, yet telecoms companies are behaving in quite an appalling way. We have cases of rent reductions, often starting at 90% to 95%, and that is par for the course—it is not a small handful of extreme cases. In a large number of cases across the country telecoms companies are coming in often with very aggressive legal notices, which are quite intimidating and making people feel that they are being steamrollered by those large companies. People feel that they have no ability to participate in the legal process, and are obliged to take those cuts of 90% to 95%. If you are small community group, a church or a sports club, the difference between £4,000 and a couple of hundred is huge and has a great impact, especially when you believed that you had that income for the next 10 years. The impact on people has been huge and it has been pretty devastating since 2017.
Our frustration with the Bill is that it fails to address the root causes of that problem. The valuation issue is affecting people deeply, and the Bill will not deal with that. Those cases will continue to arise, and in fact the Bill will expand the number of people who will be affected by the 2017 code through the Landlord and Tenant Act 1954 and the Business Tenancies (Northern Ireland) Order 1996. Between another 3,000 and 4,000 people in Ireland will be affected by the 2017 code changes, as well as thousands of others across the UK. Those cases will not diminish, nor will the huge drops in rent, and that is having a devastating effect on a lot of small landowners and property owners around the country.
Julia Lopez
Q
Anna Turley: I would say that we are dealing with in the region of a few thousand. I have a number of case studies from Members’ constituencies around the country. I am afraid that I do not have a total overall figure, but there are 33,000 site owners around the country who are affected by this. Thousands of affected people have come forward to us via social media and lobbied their MPs. I would be happy to write to the Committee with a full number, but as I said, it is in the thousands. This is not a small number of unique people; this is par for the course. Colleagues here will represent their members in such cases, too. They are not a small minority that we have cherry-picked; this is happening across the board.
The campaign was set up because there was no way for, say, a church in Scotland, a rugby club in Wales and a farmer in Surrey to come together to stand up for their rights as landlords, to talk about how this was affecting them, and to have their voice heard by Government. Legislation was continuing to be developed, through pressure from mobile operators, which have long-standing and strong connections with Government through their large lobbying organisations. The views of ordinary people about the impact of the legislation on them were not being heard.
Chris Elmore (Ogmore) (Lab)
Q
Anna Turley: Absolutely. Someone in Cambridgeshire wrote to us who has two masts on their farm:
“I have recently gained Planning Approval for 5 Houses on my land Immediately next to the mast positions. Not only do I appear unable to refuse to renew the Lease…their current offer is derisory at £750 per annum which is less than 10% of the current rent.”
Another, in Peterborough, said:
“It’s been two and a half years out of lease, they had agreed all the new terms of the lease, just about to sign off. Then all change and they pulled out, and offered £500 per year and not heard anything since. These tower operators make dodgy used car salesman seem like Saints.”
We have hundreds and hundreds of those. Churches, for example, are saying that they can no longer keep to their plans for the upkeep of their buildings. Sports clubs say that they will have to ask parents for more, so that their kids can play on the team. The impact of a rent cut from £4,000 to just £350 is devastating for small community groups and small businesses. They feel that nobody is standing up for them or listening. The impact of the new legislation will make that even worse.
Julia Lopez
Q
John, you rather touched on the challenge: this is an area that is very dynamic. All of us are learning what the security risks are, and in Government—which often moves very slowly—it is a particular challenge to manage such a dynamic, changing picture. That is why in this legislation, we have set out some broad principles and basic requirements, but a lot of this has to be secondary legislation so we can keep up to speed with all the changes that are going to be happening to connected devices, and some of the risks that will come with that. I think it would be very helpful if you could set out for the benefit of the Committee how this picture has changed over the past few years, where you think things will be moving, the extent to which connected devices will be in our homes in future, and some of the security risks that will present.
John Moor: When I started out seven years ago, I was invited to take a look by the chairman of the organisation I was working for at the time, the National Microelectronics Institute. He was the CEO of an IoT company. I confess, I had not seen what the challenge was, so when he invited me—“John, go and take a look at IoT cyber-security”—I thought, “Why me? What’s the challenge? Isn’t this thing just a tiny part of a well-established body of knowledge about cyber-security, and why me?” My background is in electronic engineering—semiconductors.
As it turned out, when I went and had a look, it did not take me very long to realise, “My goodness, there is a real problem here.” I remember that at the time, a word I was using often was “egregious”. As effectively a student coming into it, trying to understand the space, I looked at the evolution of computing, broadly speaking. In one era, we had computers—desktops, laptops—and we connected them up, and the security around those was pretty dire at one point, but we started to get on top of that. It is not perfect now, but it is a lot better than it used to be, and we are all very familiar now with doing security updates. The next phase was mobile. Mobile was not quite as bad as the era of PCs. It was better—still a few problems, but much, much better. Then we got to this thing called IoT, and it took a complete reset. It was totally egregious.
I come from the world of embedded systems engineering, and one of the first events we did was a summit we ran at Bletchley Park in 2015, just to do a landscape piece—just to try to understand it from chips to systems, bringing in the regulator. We had a representative of what was then the Communications-Electronic Security Group, but is now the National Cyber Security Centre, to try to understand where the issues are. Part of the problem, I think, is what I learned there as an embedded systems guy. We had a pen tester there, and he said, “If a researcher comes knocking on your door, don’t turn him away.” I thought, “That is a really interesting thing. What is he talking about?” We were talking about vulnerability disclosure. For someone who comes from embedding air gap systems, security was not a thing. It does not take you long to realise that when you start connecting things up, suddenly you expand this thing called an attack surface. Attackers can come from many sources, not in proximity to the thing that you are working on. Suddenly, you have this massive attack surface.
The whole idea about IoT—internet of things—is about connecting things up, so by its very nature, you are vulnerable. These things can come at you from many angles. What does that mean? It means different things to different people. I tried to understand what this thing called security was about. I immersed myself in the security community and straight away I realised there were different groups. If people start talking to me about data, they are usually coming from a data security or information assurance-type background. If they talk to me about availability of systems—keeping systems up—they usually come from an operational technology. What I mean by that is the sort of things we find in industry—process and manufacturing.
Then we have this thing called IoT. One of our board members expressed it very well. He called it the “invasion of IoT”. What I took from that is that this technology is coming at us, ready or not. We established in those early days that we needed to have a response. The need is now. We could not wait for new standards and regulation, which is why we set up the IoT Security Foundation. Our centre of gravity is in best practice. It is saying, “Can we help manufacturers who do not yet see that the very fact that they are starting to connect things up poses a risk?” They did not, but now we are in a much better state. The body is developing.
I am delighted to be here to talk about this regulation. More needs to be done, without a doubt. A seminal moment for me was at the very first summit that I talked about. We had the chief technology officer of ARM, a chap called Mike Muller, give a talk in which he said, “The ugly truth is this: you will get hacked.” That was quite an epiphany for me, because coming from an engineering background, we engineer our systems to be virtually perfect, but what we are witnessing now is that security is a movable feast that evolves. Out in the wild, things change. New vulnerabilities are discovered. Yes, you can do all you can to engineer it up front, but guess what? Once it is in the wild, this thing called resilience is so important. What that means, especially in terms of this regulation, is the software updating part and especially the vulnerability disclosure. They are absolutely essential parts. That is part of what I have learned on the way.
I come to refer to IoT security as a “wicked challenge”. By that I mean that I do not think we will ever perfectly fix it, because it is always moving, but we can address it. We can mitigate the risks to a level that we are comfortable with and can accept. Again, another phrase I learned is, “Don’t let perfect be the enemy of the good.” This is all good. This is progressive. This is what the world needs. Being part of the regulatory process to get here today, it became apparent that getting regulation right is so difficult. It is so easy to get it wrong, but going through the process, this is a regulation that we can wholeheartedly back. We think it is absolutely the right thing. It takes a step; it gets us on that security journey. We often talk about an on-ramp of security. It is about maturity. In terms of regulation, this is a fantastic first step, but more will come. The way it has been set up is exemplary. We can evolve it over time as we have to ratchet up the security for the benefit of consumers and society. I hope that little ramble gives you some idea about my journey and where I think we are at.
Julia Lopez
Q
Dave Kleidermacher: Let me start by saying I am so appreciative of the leadership role that the UK Government have taken to help us get to a better place for IoT security. I have been working closely with the Department for Digital, Culture, Media & Sport and NCSC for the past couple of years leading up to this. I have worked on how to measure security in digital technology for almost 20 years, and I believe that the lack of transparency in what the security ingredients are for digital technology has been one of the headwinds facing the entire digital world, even before the IoT was called the IoT. Of course, the IoT has made it much more urgent that we address this.
I agree that the minimum requirements we are talking about here are a really good starting point, but as we move forward and look at the secondary legislation, the really big challenge is how we scale this. The question about smaller developers is something that I am quite concerned about. At Google, we build our own first-party products but we also develop global-scale platforms. On Android, we have many manufacturers of devices across all different price points. We have millions of app developers across the world with whom we connect and work in all sorts of different environments.
One of the biggest challenges is how to monitor and measure these requirements, and how to make that work for small businesses in particular. That is the area I have personally been putting a lot of time into over the past couple of years. How do we build and establish an actual practical mechanism or scheme for measuring security at scale? There are a lot of details that go into that, but at the end of the day, we need a hub and spoke model. I can give you an example of a failure mode. The UK is, again, taking a leadership role, but many countries are looking at similar kinds of ideas and legislative concepts. The problem is that if every single country decides to create its own testing scheme for how to measure this, imagine how difficult it would be to have, say, a webcam or smart display, and then go to each country and provide documentation, provide the test results, explain how it works and go through a testing mechanism for every country.
As an example, for our Nest Wifi products, Google has had public commitments and transparency about our desire to have third-party independent security labs to test the products and assess compliance to these common-sense requirements. We have been doing that for a while now. We certify all of our products that way, but then a couple of countries at the leading edge of this started to ask us to certify again their schemes, and we did. That was a lot of work, to test to one scheme and certify and then do the same for another country with a different set of rules. The product did not change at all; it did not get any better because we were already certifying it. However, the work and the cost of doing that were significant. If we scale that to the full IoT, to all the countries which are interested in this—they all should be—then you can imagine how quickly it breaks down.
The hub and spoke model is looking at how we can work together to build a public-private partnership where there are non-government organisations, typically well-regarded international standards bodies, which take the great standards that we are developing, such as the ETSI EN 303 645 international specification on security requirements, which the UK has led in developing, and translate that into a practical conformance regime. An NGO can take that specification and the test specification—a sister specification, ETSI TS 103 701—and test a product once to have it certified for use in all of the different nations which adopt the same standard. That is the trick to this—the hard part that has to be solved as we move forward.
Dan Patefield: I think John and Dave have already mapped out the ever-growing risk landscape, so I will not reiterate that. From an industry perspective, there is clearly strong support for the ambitions of the Bill we have been discussing today, in implementing a minimum baseline that everyone should work to. Certainly, large swathes of industry are going beyond that, as Dave has outlined. I think I would join the other panellists in commending DCMS on the leadership that it has shown in developing the framework, not just with this legislation, but with the code of practice in 2018. I also commend it for playing a key role in developing the globally recognised standard in this space, EN 303 645—I always get that number wrong. The challenge that we have, and I am sure that we will come on to this, is that the code of practice—we supported its development and engaged industry in it—created an outline for best practice. However, it was never prescriptive; it was broadly focused. The practical challenge now is translating that into regulation that is workable for industry and consumers. I am sure we will move on to that, so I will leave it there.
Julia Lopez
Q
Dan Patefield: Going back to the code of practice, I am confident that across all 13 of those areas many companies have made good progress, and will continue to develop best practice that goes far beyond those requirements. I think it is a good approach to start with the three requirements that are included in the Bill; it is not the case that industry will be surprised by what comes out in secondary legislation. The practical challenge is translating the non-prescriptive code of practice into something that will be more prescriptive by definition.
There are a number of areas where I think there is more work to be done to smooth the path to compliance, if you like. We have got various elements. We have got the standard—that is not going to be a surprise. We know the security requirements—they are not a surprise. What we have not got is the boring bit—the technical specification that people in compliance teams within manufacturers are worried about. Quite often they have to then communicate that to their HQs—which are often in different parts of the world—and say, “We have got legal certainty that this is how it is going to work and this is how we achieve compliance”. That is the bit that we have not yet got.
Julia Lopez
Q
Dave Kleidermacher: It is a really important distinction, as we look at the so-called security ingredients in digital products. The analogy to food is a good one—but it also has its limits. What is good about it is that consumers deserve to have information at their disposal to be able to make better decisions about their health; in the case of food, that is their physical health, but in the case of digital technology it is their digital health. The concept that a consumer should easily be able to get a sense of the security status of a product is a very good idea. However, the main challenge is that food contents do not typically change—there can be a printed label that works okay. However, in the digital world, it could happen that you ship a product today and then there is a severe critical vulnerability, perhaps a hardware problem, that cannot effectively be mitigated or even patched. If that happens in the future, even a day after you have shipped it—this is a worst-case scenario—then if you try to put an attestation on the static label that the product is “secure” or meets these requirements, that attestation could be immediately incorrect. In fact, it could be dangerously misleading, and give consumers a false sense of security, so I believe that, while the ingredients label is essential, the user needs to have transparency. The consumer needs to have visibility here.
That label needs to be a live label. A simple example would be a QR code on packaging, although I am not sure how much consumers really go back to their packaging. We should also stress in-product experience wherever that is practical. It will not be practical in the case of every electronic product, but there is typically an app to manage many of our consumer IoT products. The app can provide an experience where the consumer can get the real-time, current status. That status can be as simple as a link that takes you to the certification page. As I mentioned earlier, we can have NGOs that establish the conformance programmes that we need to help to measure the security. It could just take you to the certification page to see the real-time status. If a product is deemed unsafe for use, it will become decertified, and the user will then know it.
Digital Identity and Attributes
Julia Lopez Excerpts(2 years, 8 months ago)
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The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
I wish to inform the House that the Government have today published their response to the digital identity and attributes consultation.
In our increasingly digital world, and as technology devices become ever more integral to everyday life, being able to prove identities digitally is a tool which will give people more convenience, choice and security in how they access products and services. From making purchases, starting a new job, or moving house, it is important now more than ever that people and organisations can trust who they are dealing with as easily when transacting online as they do when dealing with others in the physical world.
Published in July 2021, the digital identity and attributes consultation sought views on three main proposals that could achieve a safe and secure digital identity system for the whole UK. Extensive engagement informed these proposals and the contents of the consultation response. We are determined to put the needs of individuals first with a strong focus on privacy, security and inclusion.
Based on the views received from respondents to the consultation, our response details the Government’s intent to legislate, when parliamentary time allows, to enable the development of a secure and trusted marketplace for digital identities and attributes across the UK economy.
First, the Government will seek to introduce legislation that will establish a digital identity and attributes governance function. This will help to build a trusted ecosystem in which digital identities and attributes can be used safely and securely across the economy. The governance function will have oversight of the UK digital identity and attributes trust framework and will be responsible for the issuance of a trust mark to organisations certified against it. This will give confidence to individual users of digital identities and attributes that they can trust certified organisations to offer safe and secure digital products because they have a trust mark to show they are adhering to the standards of the UK trust framework.
The Government will also seek to introduce legislation to enable public bodies to allow secure digital checks by trust-marked organisations against personal data they hold for the purposes of identity and eligibility verification. This will allow people and businesses to have confidence that digital identities in the UK can be built on trusted datasets in a way which upholds UK standards of privacy and data minimisation.
Finally, the Government will seek to introduce legislation which will establish that data held by public bodies which are then shared digitally through the legal gateway, are equivalent to the same data shared through traditionally accepted forms of identification, such as physical passports. This will provide all parties that rely on these data with the clarity and confidence that digital identities and attributes can be trusted.
Further details can be found in the consultation response, available at:
https://www.gov.uk/government/consultations/digital-identity-and-attributes-consultation/outcome/government-response-to-the-digital-identity-and-attributes-consultation.
A copy of the consultation response will also be placed in the Libraries of both Houses.
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