Superfast Broadband (Urban Areas)

Lord Vaizey of Didcot Excerpts

Tuesday 9th September 2014 Westminster Hall

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

It is an honour to serve under your chairmanship, Mr Streeter, in this unusual and temporary setting for Westminster Hall debates. I thank my hon. Friend the Member for Cities of London and Westminster (Mark Field) for his excellent speech, which encapsulated all the concerns. I am also grateful for the contributions from the hon. Member for Hackney South and Shoreditch (Meg Hillier) and my hon. Friends the Members for Chippenham (Duncan Hames), for Gloucester (Richard Graham) and for Finchley and Golders Green (Mike Freer). It is nice to have contributions from so far afield outside London.

The main focus of the debate is broadband in London, but I know that the issue of broadband is of huge concern to hon. Members all over the country. I am pleased that a similar level of consensus has been established in this debate as has been established in relation to all our efforts to keep Scotland in the Union. May both elements of consensus achieve similar levels of success.

My hon. Friend the Member for Cities of London and Westminster, who secured the debate, talked about how his expectations had changed over the past 10 years since he went to Africa, and I think he hit the nail on the head. Even during the past two or three years since we started the programme, the legitimate expectations of businesses and residents for superfast broadband speeds have grown exponentially, not least because of the entertainment applications that residents are now used to using, such as BBC iPlayer, and because of businesses’ use of technologies such as the cloud.

It is important that we recognise some of the successes of the broadband programme that we have undertaken, as well as the commercial roll-out of broadband. Since I last discussed the subject in the House, we have, under the rural broadband programme, passed more than 1 million homes, and we are now passing 40,000 homes a week across the country. By spring 2015, we will have passed at least 2 million premises.

Of course, broadband is equally important in urban areas, and it is right to raise that issue; people sometimes think that urban broadband will simply take care of itself. In some respects, it has done so with commercial roll-out. We should recognise that BT’s commercial broadband roll-out scheme, which had no Government subsidy, reached some two thirds of premises in the country and was completed two years ahead of schedule. I was pleased that, as a result of discussions with the Government when we were putting together the extension of our rural broadband programme, BT committed another £50 million, as my hon. Friend mentioned, to reach another 400,000 urban premises.

I was pleased at the beginning of last month that Virgin Media announced plans to extend its network in east London to a further 100,000 premises, which will make a significant difference. I am pleased to see Virgin Media investing not only in faster speeds for its existing customers but in extending its footprint. UK Broadband has launched its own superfast wireless service across much of central London, including the Cities of London and Westminster. In my press cuttings today, I came across a company called Optimity from Tech City, which also plans to offer a wi-fi superfast service. We have seen the announcement that CityFibre Holdings will be working with TalkTalk and Sky to bring fibre broadband to many of our key cities across the country, as will companies such as Hyperoptic.

In the debate about broadband, we must not forget the importance of 4G. Thanks to the successful auction that we carried out, we now have the fastest roll-out and take-up of 4G mobile speeds anywhere in the world. In superfast broadband terms, in London the average download speed, as I understand it, is 60 megabits a second and the average upload speed is 59 megabits a second. I understand how important it is for my hon. Friends to make their case, but we must recognise that the UK is now a world leader in international rankings. We are the best connected of the top five European economies. In answer to the hon. Member for Chippenham, I do not believe that he will find a better scheme than our rural broadband scheme when it comes to Government support for broadband roll-out.

[Meg Hillier]

One of the real concerns of small businesses in Shoreditch is that upload speeds are simply not suitable for businesses that deal with a lot of digital data. Will the Minister address that if he has a moment?

[Mr Vaizey]

As my hon. Friend the Member for Cities of London and Westminster said, it is important to distinguish between business and residential broadband. Businesses that want certain speeds must recognise that they have to get a service that is more expensive than residential broadband. That does not mean, however, that we should not focus on ensuring that commercial providers provide good broadband speeds for residential use as well as for commercial use.

To pick up on what my hon. Friend said in his speech, it is important to look at deregulation. He outlined the huge cost of laying fibre in a city environment. That is why we have introduced legislation to permit the installation of broadband street cabinets and new overhead lines without the need for prior approval from planning authorities. That measure will last for five years. We have also introduced changes to streamline the planning process to support the deployment of mobile infrastructure and encourage the 4G take-up that I mentioned earlier.

In some urban areas, commercial investment in residential broadband has not happened for reasons to do with the original network, the anomalies in coverage and the potential expense of resolving those problems. Nevertheless, we have 88% superfast coverage in London, and London stands against any of the major cities in the world in terms of broadband availability. There are clearly vast amounts of fibre in the City of London, but that has been designed for commercial use. As my hon. Friend said, the challenge is to extend more coverage to the residential sites.

We are initiating dialogue. The chief executive of BDUK, Chris Townsend, will talk to the Mayor’s connectivity summit later this month, and all suppliers have been invited to discuss this important matter. We must support commercial deployment wherever possible. We can subsidise the supply side only where the case for public intervention is absolutely clear, to avoid chilling the appetite for commercial investment. We must satisfy state aid provisions. We have engaged with the European Commission on those matters, and we have agreed with the Commission that our focus must now be on stimulating the market to invest in and supply services to close gaps in urban broadband supply.

My hon. Friend mentioned the SuperConnected Cities programme, which is at the heart of our approach, particularly the broadband connection vouchers of up to £3,000 each. The sheer richness of the market is demonstrated by the fact that 530 suppliers are registered for the scheme and another 100 have applied to take part. We have also issued almost 2,500 vouchers. There has been a learning curve, and we have streamlined the system, making the application process much simpler. We have also removed the requirement to look for competing quotes.

Under the same scheme, we are rolling out wi-fi in public buildings across the country. For example, 12 major museums and galleries in London, covering 30 million visitors, will have wi-fi. For your interest, Mr Streeter, should you wish to visit, there is now wi-fi in the National Gallery—where they will now allow you to take photographs, and even selfies—the Natural History museum and the Imperial War museum. Wi-fi will soon come to the Tate, the National Portrait Gallery and the British Museum.

I turn to the concerns in Tech City, which the hon. Member for Hackney South and Shoreditch mentioned in her intervention. The voucher scheme has benefited firms in the Shoreditch cluster and, as my hon. Friend the Member for Cities of London and Westminster mentioned, the scheme already supports more than 600 businesses across London. I have asked BT to sit down with the chief executive of Tech City UK, Gerard Grech, to look at the problems. I have to say frankly that at the moment some of the evidence is simply anecdotal. We need a much clearer picture from Tech City and the hon. Lady’s constituents about where the gaps lie. The important thing is to bring people to the table, to analyse where the problem is and to encourage commercial providers to meet demand. Clearly, they will invest where they believe there is demand and where they know there is a genuine need for the service.

To pull back to the bigger picture, the overall broadband scheme is very much on track. We remain committed to achieving superfast broadband coverage for 95% of UK premises by 2017. We remain committed to universal access to standard broadband of 2 megabits per second.

I will pick up on a few other points. In terms of advertised speeds, which the hon. Member for Hackney South and Shoreditch mentioned, Ofcom and the Advertising Standards Authority have worked to ensure that when broadband providers sell a service, they make it clear what the average speed, rather than the highest speed, is likely to be. I absolutely understand the hon. Lady’s frustration about the length of time that it takes to get a connection. Commercial providers must improve their customer service to ensure that people can get a connection as quickly as possible.

My door is always open, and I frequently have meetings with colleagues. Wherever a notspot causes frustration in the constituency of a colleague, such as my hon. Friend the Member for Gloucester, I remain ready and willing to meet them. I urge colleagues to engage with BT, because the company will come to the table, although it will not always provide the solution that a colleague wants. It is important to keep raising such issues and not to think that we will simply push the matter under the carpet.