Digital Economy Bill

Baroness Byford Excerpts

1st reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Lords Chamber

[Lord Fox (LD)]

I will speak to Amendment 2 and make some comments on Amendment 1. Like the noble Lord, Lord Mendelsohn, I welcome the principle of a USO and we are having a healthy debate now. I will probe the Minister in detail about how the Government will respond to the Ofcom report. I was frankly surprised by the report’s language when it came out—it was a mere twinkle in our eye when the House last debated this. It referred throughout to “decent” broadband as a starting point, rather than “world-class” or “leading” or any of those things. As the noble Lord, Lord Mendelsohn, outlined, the work that has gone into modelling the need for broadband is, in one way, completely pointless. Most noble Lords are old enough to remember a time before the internet, or the industries which now use that medium, even existed. You could not have modelled how much bandwidth you would need today 10, 15 or 20 years ago. The industry that will use this network has not been invented so we cannot know what is necessary. Decent is fine but frankly we should be looking for the best possible. In Amendment 1 the noble Lord has set a very high bar.

In Amendment 2 we have taken as our text—as I am sure noble Lords can recognise—scenario 3 from the Ofcom report. It is really to test two things. One is the universal part of the USO. We are of the persuasion that universal means universal rather than 99-point-whatever-it-is per cent. I would be grateful to hear from the Minister what he believes universal means. On timing, we have heard various claims that by 2020 at the flick of a finger we could all have 10 megabits. There are many people where I come from in the countryside and from all over the country who would be very surprised if they could get 10 megabits. They are still struggling with ones and twos and upload speeds of practically nothing. The fact that apparently this is so easy and frictionless yet so far away for so many people seems slightly at odds. The point of Amendment 2 is very much to set what I think the previous speaker would call a less ambitious target, but one that we believe should be eminently achievable. I misspoke because it is not a target; the USO is a minimum. The noble Lord who spoke previously used the word “target”. One of the dangers is that this becomes the limit to our ambitions and it should not be. In many senses Amendment 2 is entirely compatible with Amendment 1. We have to get to Amendment 2 as a minimum but Amendment 1 and all the ambition enshrined within it can still be part of this formula.

Looking forward, we will be talking later about how we can assess the progress of this. At the moment we want an amendment that is designed to give the Minister enough pressure on Ofcom and Ofcom enough pressure on the service providers to deliver a minimum standard. It is inconceivable and unacceptable that we should be so down the pecking order at the moment. We will talk about other structural issues through the course of Committee but as a very minimum we believe Amendment 2 sets a standard.

[Baroness Byford (Con)]

My Lords, I have Amendments 3 and 7 in this group. I reiterate the expressions of support for this Bill given by earlier speakers. There are many aims in this Bill that I support but some specifics are worth raising at greater length. I perhaps should remind the Committee of our family interests in farming although, as far as this Bill is concerned, we are without any form of modern communication in any of our buildings. That might change in the future but clearly we are not an interested player in that part. I am a member of the CLA.

Amendment 3 is quite detailed—so I will not read it out—and tries again to tie things down more specifically than they are in the Bill. It seeks to guarantee clarity over what the consumer can expect from a universal service obligation on broadband. It will ensure that the USO delivers a minimum speed of 10 megabits—perhaps we might have further conversations about that—and that this is reviewed to reflect technological advances and increased demand. Once enforced the USO must also allow those who are not provided with access to broadband at the set minimum speeds a simple means of seeking financial redress if that is not resolved, which they can then use to find an alternative means of getting connected.

The CLA believes that this redress should mirror the reasonable cost threshold, which should sit just above the current landline threshold, at £4,000 per property. Small, rural communities should be able to pool this money to invest in alternative technologies and connection schemes that provide them with faster and more reliable—and potentially cheaper—connections compared to its being done individually. For these most remote premises, making use of a wide range of technologies, including wi-fi networks, satellite and mobile data to help provide universal coverage, will help to ensure that the introduction of the USO is a success and should be encouraged.

On my Amendment 7, which is about “may” and “must”, I need not argue the toss of the wording between the two words but feel strongly that “may” is a facilitator and “must” is a direction. I am sure that other noble Lords are probably heartily sick of receiving complaints from friends, neighbours, colleagues and family about the broadband service which they either have or are still unable to achieve at all. I have often spoken in this House of the areas that are not covered at all; of the services that advertise speeds “up to” but which achieve only a fraction of the implied promise; and of the difficulty of obtaining a helpful response from service providers when things go wrong.

The speed of change on the digital technology front is such that the Government must keep up with both the challenges and changes facing them and with their implications for society. No one can doubt that Ministers are very busy people, who are subject to a variety and quantity of pressures. I feel strongly that Parliament should assist them by indicating those priorities that are paramount. Most of us can have no idea of future provisions that will affect the universal service obligation. We ought to insist that whenever that obligation is affected, the Minister has to look closely at it more closely.

I wholeheartedly support the amendment in the name of the noble Lord, Lord Mendelsohn. I merely suggest that it be made clear that most farms—we spoke about rural areas—GP practices and businesses are small and medium-sized enterprises but are often not regarded in that way. My concern may be unnecessary, but I have read a great deal about the difficulties experienced by these enterprises, which are located in rural areas and which may not be recognised as belonging in that category of small or medium-sized businesses. Only last year, those who wanted to put forward their claims for the single farm payment were totally unable to do so in some areas because there was no broadband available, and in fact the department had to revert to accepting written paper applications, which people had been using for years.

My amendments are probing amendments, but it is important that our broadband is strengthened and is available to all. As was quoted, the NFU has suggested a speed of 30 megabits per second. Reliability is absolutely key to success in any area. As the noble Lord who spoke just before me quite rightly pointed out, many of the new businesses that have been formed would never have been started had they not had broadband access. If you look at rural areas and the growth in small and medium-sized businesses, many of them are based in those areas and give an option for employment for people in areas where it would not have been at all possible in the past. Therefore, delivery, accountability, setting challenges and holding to account are hugely important. I know that the Government are aiming at 100%, but it is often said that the aim is 95% or 99%. Often I wonder whether that refers to numbers of people or the areas covered. If it is on numbers of people, obviously it is easier in urban areas than in very rural areas.

I have tabled one or two amendments to the Bill that we will come to later. I support and welcome it, but there are areas which we need to strengthen, and I am glad to have spoken to my two amendments along with the other amendments that have been moved and spoken to already.

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[Lord Maxton]

My Lords, I just want to raise an issue of the future rather than the present. I hope that masts will soon be a thing of the past and we move to satellite provision of telephony in the very near future. I do not know whether that will be the case, but I have certainly heard it will be. Otherwise, I agree with my noble friends that we ought to be moving to having the best provider we can get in any area. I am with EE, and when I am sitting in my motor car driving along with my wife, who is on O2, and my son, who is with Virgin Media, who gets a service on their phone in some areas of the country will depend on the provider.

[Baroness Byford]

My Lords, as someone who is not as well versed as some noble Lords with the technology, it always strikes me as strange that if you go abroad, wherever you are, you seem to be able to get access. What do they do that we do not? Are there lessons that we should be learning? Do they have a different system? How does it actually work? It seems ludicrous that we are going into such nitty-gritty when perhaps, over there, there is something that we are not even opening our minds to.

[Lord Ashton of Hyde]

My Lords, I am grateful for the contributions in this interesting and important debate. Amendment 6, in the name of the noble Lord, Lord Stevenson, seeks to include mobile coverage within the scope of the guidance on the broadband universal service obligation. The universal service directive currently provides the regulatory framework for a broadband USO and although, depending on the design of a broadband USO, there is scope for the USO connection to be provided using mobile technology such as 4G, the directive does not apply to mobile coverage.

I am afraid we do not currently consider there is a case for a USO for mobile. The Government have already secured significant progress to ensure mobile coverage across the whole of the UK through the licence obligations arising from the December 2014 agreement with the mobile network operators, which locked in £5 billion of investment to support the rollout plans. We want to hold the mobile operators’ feet to the fire, and noble Lords will be aware that Clause 10 will give the regulator, Ofcom, the power to issue hefty fines to mobile phone companies that fail to meet their licence obligations. The noble Lord, Lord Gordon, mentioned that it does not help if you are not getting a full mobile service, but it is a direct incentive, as is compensation. We are trying to achieve what he wants.

Amendment 19, in the name of the noble Lord, Lord Mendelsohn, seeks a licence variation to require roaming within networks where there is an intermittent or no signal, while Amendment 17 in the name of the noble Lord, Lord Gordon of Strathblane, would offer roaming as automatic compensation. I understand the frustrations of people whose mobile experience does not live up to their expectations, but although roaming appears to offer a quick fix, it would do more harm than good, undermining the incentive for operators to invest in new infrastructure. This is particularly important for areas that have no coverage from any provider at all, as there is no incentive to invest capital in a new mast if other operators simply piggy-back off your investment.

Noble Lords mentioned coverage in other countries— my noble friend Lady Byford mentioned travel abroad. The reason for that is there are international roaming agreements, which apply to a UK citizen travelling in Europe. However, it is offered on a fair-use basis, when tourists travel for a limited period of time. Details of a fair-use test to prevent abuse of roaming are being agreed in the EU at the moment.

Roaming was considered by the Government in 2014, but was rejected in favour of licence obligations to drive increased coverage by all mobile operators, which locked in the £5 billion investment I mentioned earlier. We are making progress: Ofcom’s Connected Nations 2016 report, which records progress to June 2016, shows that 99% of UK premises now have indoor voice coverage and 98% have indoor 3G or 4G data coverage. Our recent reforms to mobile planning laws in England, and the proposed reforms of the Electronic Communications Code which we will be talking about later, will support further investment and improvements in connectivity across the UK and reduce coverage not-spots. We are working to make it easier and cheaper for mobile companies to invest so that consumers benefit from good coverage and can receive it at low prices. Our measures are achieving this, and our future reforms will support this further, thereby delivering a better deal for consumers across the UK.

Noble Lords will also be aware of our commitment to being world leaders in 5G, as the noble Lord, Lord Gordon, suggested. That is why we announced over £1 billion of funding in the Autumn Statement to support the deployment of the next generation of digital infrastructure. We want to support investment, and not discourage it. The noble Lord, Lord Maxton, talked about his desire to see no masts at all and for the system to be based on satellites. I am not an expert on the technical side of this, but I think I am right in saying that for 5G, which is what we are aiming for, we are going to see more masts, I am afraid, or more transmitters attached to various edifices—we will talk about that later, I am sure—because they have shorter range and greater bandwidth. So I am afraid I do not think the bandwidth that is possible from satellites will enable what we have all talked about and what is required for the future.

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[Lord Mitchell]

My Lords, I will address Amendment 20. The separation of Openreach from BT is fundamental to the success of Britain being a leader in the digital economy in the 21st century. It is unanswerable that BT has been given a monopoly in fixed broadband connectivity. It displays classic monopoly behaviour: it controls the distribution, sets the prices and dictates the terms to its competitors. It has no incentive to improve the quality of its service—just the minimum. I would not be so vehement on this issue if BT was supplying a brilliant service, or even if it gave us believable market facts. Its broadband coverage is awful and it successfully lobbies to persuade Ministers and others that it is meeting its targets; it is not. It is undeserving of any government support, particularly in its ownership of Openreach. Why should it be granted this monopolistic licence to print money? Alternative owners will have a real incentive to improve the service.

Fixed and mobile connectivity are converging. The route may be different, but they are joining up: data are data. BT is rapidly taking on all the attributes of the overall monopoly supplier: all internet connectivity. If you aggregate its stranglehold in broadband, add its ownership of EE in mobile and then factor in its future 42% ownership of the 5G spectrum, it is overwhelming. We have a massive monopoly in the making. Separating Openreach will certainly clip BT’s wings and improve broadband connectivity.

[Baroness Byford]

My Lords, at Second Reading I spoke against the continuation of BT and Openreach as one unit. Many of us have experienced disappointing results when we have asked BT and Openreach to do things: the two of them seem to pass the buck to each other. Separation is a very good suggestion and I support Amendment 20 in principle. If this is not possible —like others, I have followed the current pension debacle, which is adding to the difficulty—who holds BT to account? If it is Ofcom, is it doing its job; if not, should somebody else be doing it? One does not often hear praise of BT, and its provision is unsatisfactory. If the Government say that the amendment is not necessary, the Minister should tell the Committee what he is going to do about the current position, which is far from satisfactory.

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[Baroness Byford]

My Lords, I have two amendments in this group. Amendment 25 suggests leaving out paragraph 3(h) of Schedule 1:

“to interfere with or obstruct a means of access to or from the land (whether or not any electronic communications apparatus is on, under or over the land)”.

As I declared earlier, at the moment we have no such masts on any of our land.

This is a probing amendment intended to ascertain what is meant here. How can it be reasonable, necessary or practicable to interfere with or obstruct access to land—any land as it currently stands, as is stated in the preamble—even when there is no apparatus on, under or over that land? Will this, as the noble Lord suggested, include children’s play areas? Will private citizens return home to find they cannot access their property because there is an unmoving Openreach van across their drive? Will farm animals be denied welfare services because they cannot be removed from their fields? Will emergency services, including air ambulances, be barred from using land where access has been obstructed? Will any obstruction be time limited to, for example, not more than half an hour? Indeed, have the Government given thought to this particular issue?

Amendment 39 deals with the height and clearance requirements of overhead lines. I am not sure why Amendment 40 has been removed from this group but I will speak to it at the same time, if I may. These are probing amendments, though the alternative heights they suggest are not to be regarded as frivolous. Three metres is only 10 feet. Modern agricultural machinery is large and growing larger. Three metres above the ground is likely to mean that combining a cereal crop will be difficult, more costly than strictly necessary and probably more dangerous. Have the Government consulted, for example, the NFU, the Health and Safety Executive and the CLA; and if so, what were their comments?

Two metres is only 6.5 feet. Wires hung in mid-air tend to stretch over time. It is likely that 2 metres will become, in places, 1.6 or 1.7 metres—less than the height of the average man. How will roof repairs, chimney repointing and the installation of solar panels be carried out safely with a wire at head height? Ladders and other apparatus will have to be positioned and lifted over the roof ridge. Who will carry the can and bear the cost if a wire set at 2 metres has lengthened and is damaged? Who will be held responsible if a wire moves suddenly and sharply in a gust of wind and hurts or kills somebody working on the roof? I believe that the height envisaged in this section of the code is from a time when agricultural machinery was much smaller and we did not, of course, have the whole question of electronic communications as we do now. As I said, this is a probing amendment. However, if we are not careful, this section of the code has the possibility to cause difficulty in the future.

[Lord Aberdare]

My Lords, the issues relating to valuation seem to span this and the next group. In a sense, we have not yet examined the horse to which Amendment 23 is the cart. However, I will follow the noble Lord, Lord Grantchester, and the noble Baroness, Lady Byford, in covering the area as a whole.

The no-scheme valuation methodology proposed in the Bill is designed to promote greater investment in the development of much-needed communications infrastructure. In doing so, it needs to maintain a fair and workable balance between the range of different interests involved, including that of landowners, infrastructure providers, network operators and, of course, users. Briefings from the CLA, representing landowners, and from APWireless, a land aggregator, argue that this is a market that already works well and has done so for 30 years. They express serious concern that the proposed change could in fact reduce the availability of land for wireless infrastructure development, thereby slowing the rollout of extra capacity. They point out that the Law Commission report on the ECC some years ago, which the noble Lord mentioned, warned that changes along the lines proposed in the Bill would,

“generate an extremely difficult transition, and a consequent overload of litigation; more importantly, the market in sites benefits the economy—not only small businesses in the countryside but also some larger concerns”.

A subsequent report by Nordicity made similar statements.

I am not aware of any evidence that so-called ransom rents are a significant issue under the existing regime. Independent infrastructure providers, such as VVIG and Arqiva, see it as essential that these new powers are used responsibly and only as a measure of last resort. They stress the importance of seeking voluntary agreements first, to retain the support of the landowner community. The undertakings given in the Minister’s helpful letter to Peers after Second Reading, relating to wholesale infrastructure providers and to the treatment of alternative structures such as water towers and pylons, are encouraging in this respect.

A possible effect of the proposed change to a no-scheme valuation may be to generate windfall savings for large mobile network operators whose costs of acquiring access to land will fall. For that reason I support Amendment 23, which seeks to ensure that such savings are at least reinvested in increasing coverage, rather than just disappearing into the coffers of the MNOs. However, I remain concerned that the change, particularly if applied to existing agreements or their renewal, could introduce uncertainty, risk and tension between ECC beneficiaries and landlords—and of course landlord co-operation and good will is key to a sustainable, efficient and well-maintained network. It also seems to represent a fundamental change in the rules surrounding private ownership in this country.

I hope the Minister will be able to explain why this proposed new valuation methodology was introduced into the Bill so apparently unexpectedly, as the noble Lord, Lord Grantchester, said, and contrary to what had previously seemed to be the Government’s intention. What provisions does the Minister have in mind to ensure that any savings made on rents are indeed reinvested in communications infrastructure? I apologise if I have jumped the gun in talking about some of the amendments in the next group.