Consumer Rights Bill

Lord Deben Excerpts

Wednesday 29th October 2014 Grand Committee

[Lord Deben (Con)]

My Lords, I hope that the Minister will listen to this very carefully. I will repeat for her interest an experience I had as a Minister when I sought to insist that the providers of telephonic communications should be able to withdraw the service to telephone numbers used by people advertising illegally in telephone boxes. This had become an increasing problem and it seemed not unreasonable that we should say that if you advertise a telephone number illegally in those circumstances, the telephone company might withdraw it.

One of the telephone companies took me to Ofcom, or the equivalent then, to say that this was contrary to competition and would create a cartel. With very great regret, the regulator said that it thought that the law did mean that. So this very simple way of removing very objectionable content in telephone boxes in the centre of London, which were very often used by young people, was stymied. I use the example so that my noble friend will recognise that this is an area in which very great care must be taken not to allow the very necessary protection for competition to interfere with the very necessary protection for other reasons.

The noble Baroness who introduced the amendment did so in a very broad-minded and sensible way, saying, “We just want to do this in order that the Minister will take it very seriously”. I just want the Minister to understand that this is much trickier than sometimes Ministers are advised. Having been through this, it is a very dangerous area to be in and the Committee will probably agree that we want both—protection of competition and protection of people so that they can make the choices that they want to make. There are many unscrupulous people around who will use the one to play against the other.

Therefore, will the Minister take it from me that it is much more difficult than is sometimes suggested, and that she needs to be on her guard in a particular way? I hope she will be able to answer the very pertinent questions that were raised by the noble Baroness.

[Lord Best (CB)]

My Lords, I have added my name to Amendment 56B. I was approached by the Internet Telephony Services Providers’ Association—ITSPA—because I chair your Lordships’ Select Committee on Communications. However, my committee has not had a chance to consider this particular issue so, having discussed it at length with ITSPA, which represents some 80 providers of telephony services via the internet, I speak in a personal capacity.

The amendment addresses a consumer rights issue relating to the penalties facing unwary customers of some of the companies that supply our mobile phone and internet connections. Unbeknown to those who sign up to get the internet from their iPhones and other mobile phones—unless they have studied all the small print and those terms and conditions that we all accept but have never read—some of the big players have built-in penalties for using the internet to make telephone calls—for example, through Skype. While providers such as BT, O2 and Sky, for example, have not adopted such practices and do not penalise their customers in this way, Vodaphone and EE have done so in recent years.

Presumably, the restrictive practices of these companies are a consequence of them providing mobile telephone services, which could be less popular and profitable if people use the internet to make telephone calls at a much lower cost. However, this practice is bad not just for the innocent consumer who can have their calls blocked or degraded, and/or could find some hefty charges on their mobile phone bills, it is also bad for this industry that finds it harder to attract investment to extend a really useful communication tool which, increasingly, could benefit more and more of us but has this cloud hanging over it. The practice is detrimental to consumer interests as well as anti-competitive and will gradually affect other services as we increasingly access the internet via mobile connections.

I note that amendments to this effect were tabled in the other place by both Conservative and Labour Members. We learnt there that the Government and Ofcom are keen to see an end to the current bad practice. We hear that in recent days Vodafone and EE have bowed to pressure from all sides and agreed to sign up to the industry’s code of practice which outlaws the technical blocking or restricting of telephone services through the internet. This is a step in the right direction. Nevertheless, as ITSPA points out, there are ways of interpreting this code of practice that could circumvent its intentions, for example simply by avoiding the term “internet access” and using a synonym such as “mobile data” or “mobile broadband”. There are also no sanctions for breaking the code, and those who voluntarily sign it one day can withdraw from it another. Only through legislation is the matter fully resolved.

As I know from the work of the Communications Committee, ensuring the law keeps pace with technological change—particularly in respect of the internet—is an important challenge for today’s legislators. This Bill takes steps in that direction and this amendment is very much a case in point. It seems that in the somewhat arcane world of telephony services, the consumer needs the protection of the law, not just of a voluntary code, to ensure fair play.

Finally, I gather that there is a school of thought that suggests we should await an EU directive on so-called internet neutrality—to which the noble Baroness, Lady Thornton, referred. That would cover this point, among other measures. However, I fear that we could wait a very long time for agreement on the content of this Europe-wide measure. Surely it is much better for UK citizens if the Government act now with a small, well-focused amendment to the Bill already before us. I am delighted to support this amendment.