Superfast Broadband: Rural Communities

Calum Kerr Excerpts

Tuesday 21st February 2017 Westminster Hall

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I am not sure whether these broadband debates are cathartic. There is certainly an unleashing of frustration from every MP, but for a number of reasons I am always more frustrated by the end than I was at the start.

I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this debate. Such debates are challenging to sit through because we do not focus enough on the reality of the problem and the challenges of fixing it, but every time we discuss it is beneficial. It is undoubtedly one of the biggest issues for our constituencies.

We should level-set where we are at. Our frustration about lack of coverage stems from the understandable pragmatism behind the Broadband Delivery UK contracts, which stretched the money as far as possible, and from the target to reach 95% of premises, which leaves people behind. We should have foreseen that earlier and made attempts to fill the gap. We all get frustrated with BT, but a lot of the time unjustifiably so, because it will deliver on its overarching contracts.

I should like to focus on some of the specifics of what the Government are doing and the questions that remain outstanding. We know the strategy is the BDUK scheme and then the universal service obligation. I will address the USO and fibre investment and quickly touch on rates and vouchers.

The USO is meant to be the catch-all to fill the gap for the 5%, but one thing that has not been discussed today is the fact that Ofcom’s last report in December put forward three scenarios to the Government, to which, to my knowledge, we have yet to hear an official response—the Minister will correct me if I am wrong. Scenario one said that the USO would be 10 megabits simple downloads; scenario two was for 10 megabits, but with more latency specifications and an upload speed of 1 megabit; and scenario three was a 30 megabits download speed. The regulator is at pains to point out that a decision rests with the Government. There are political decisions to be made about the infrastructure that we want.

[Mr MacNeil]

Does my hon. Friend share my frustration about not knowing who to blame? Just when we think we have got our finger on it, and we go to the Government, they blame Ofcom. When we run to Ofcom, it blames the Government or the companies. There is a Bermuda triangle of blame and we just cannot get all three corners together.

[Calum Kerr]

In a future debate, we should address the fact that there is too much outsourcing of policy decisions to Ofcom. A lot of these decisions are political. I sometimes joke with my hon. Friend that he is the MP for the Faroe Islands, but the reality is that the Faroe Islands have that coverage because they took a political decision. They wanted that level of coverage and they took the policy decisions to deliver it. We could do the same, but we do not. We tend to pragmatism and say, “It’s going to cost a lot of money. How important is it? We’ll ask Ofcom and then shape the answer. Ofcom suggested this and recommended that.”

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

The hon. Gentleman makes 10 megabits sound like a dream that we aspire to, but given the rapid change in usage, will we be back here in five years having an argument about it? The Government will have fulfilled their obligations and ticked the box but will not actually have cured any of the problems we face.

[Calum Kerr]

That is an excellent point.

Let me explain why 10 megabits would be the wrong decision. Ofcom states:

“In designing any intervention, Government may want to consider the extent it should be designed to take into account further future growth in broadband usage. Doing so could help to ensure that consumers and business that rely on the USO are not left behind…Such an approach could support both better value for money by intervening once, and ensure that there is not a continual state of review, advice and reinvestment as requirements grow over time.”

If we go for 10 megabits now, we will be storing up more trouble for ourselves down the line. Let me jump ahead to a point that backs that up. There has been a lot of discussion about who will deliver the USO and about the high probability that it will be given lock, stock and barrel to BT—I think we need to be careful about that. BT’s response said:

“Existing technologies such as Fibre to the Cabinet and new technologies like long reach VDSL can offer cost-effective solutions for a 10M service but would require further investment if the requirement increased significantly, e.g. to 30M.”

That is a big “but”. If we specify a USO at 10 megabits, but what happens when we want to change it to 30 megabits? A USO does not entitle a user to free broadband. A telephony USO means that if someone does not have a telephony service, BT will provide it up to a cost of £3,400. We should imagine that in the broadband world. I do not have time to go into it today, but the detail of the Ofcom paper spells out different thresholds. Some hon. Members may think that the USO will fix everything for our constituents. It might mean that they are entitled to claim it, but it may give them a bill for thousands of pounds. What if it gives them a 10 megabits service? If they want 30 megabits in the future, they might have to pay for it again. We have to be so careful in how we implement this.

I am not going to address how much bandwidth we should use, but I will say that we need to raise our ambition. The Government need to put money into this, instead of trying to do it on the cheap. The right hon. Member for Orkney and Shetland should rest assured that the Scottish Government are committed, with R100, to 100% superfast, meaning 30 megabits. The Minister has great ambition around fibre, and the UK Government should step up and show the same ambition.

I am not sure how much time I have left, Mr Brady—

[Mr Graham Brady (in the Chair)]

You have run out.

[Calum Kerr]

Okay. I have run out. I was not sure; my apologies.

[Mr Edward Vaizey (Wantage) (Con)]

Sit down!

[Calum Kerr]

It is always a pleasure when the former Minister is here.

Let me make one final point, if I may. As we consider fibre deployment and the idea of vouchers, I will say that I am fully behind vouchers, but it is important that they do not lead to a trap whereby rural schemes such as Broadband 4 the Rural North, or B4RN, or the scheme on North Skye and in the Borders, are opened, so that any network can go on top, because it kills their business model. That must not happen. I know that is a big point of contention at the moment, so can we have vouchers and can we have them open? Let us ensure that the digital divide is closed and not cemented through bad policy.

--- Later in debate ---

[The Minister for Digital and Culture (Matt Hancock)]

I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate and for allowing time both for many Members to set out their frustrations and for me to provide an update on progress. The roll-out that we have achieved so far, which is on track to reach 95% superfast coverage of UK premises by the end of this year, is in part a testament to the coalition Government of which he was such a critically important member.

Let me re-emphasise the Government’s commitment to addressing the digital needs of all parts of the UK. That is clearly a very important goal, and a lot has been achieved. I do not think that anyone here today, even if they have expressed the frustrations of those who have poor broadband, would deny that we have come a long way. In fact, that was demonstrated in the contribution by the Labour Front-Bench spokesperson, the hon. Member for Sheffield, Heeley (Louise Haigh), who tied herself in knots while arguing that much has been done but much is left to do.

First, let me set out some of the figures. As I said, we are on track to reach 95% of the UK as a whole. Of course that figure is lower in rural areas, because of the nature of things. However, on the point about whether there is a distinction between rural and urban areas, let me say that as a matter of law there is such a distinction, because EU rules do not allow a subsidised broadband programme in urban areas. As a matter of fact, although there are still some patches of poor connectivity in urban areas, the picture is much better than in rural areas. It is understandable, therefore, that the mix of hon. Members here today is more rural than urban. Indeed, in Altrincham, 98.4% of people have access to superfast broadband, so you are probably the best off of the lot of us, Mr Brady—perhaps that is why you have said so little.

In Scotland, phase 1 of the Government’s superfast broadband programme, including reinvestment of clawback funding and project savings, is worth more than £11 million, and more than 60% of homes and businesses in Orkney and Shetland now have superfast broadband available to them. The highlands and islands project as a whole will have reached a total of 130,000 premises by spring 2018, none of which will be covered by commercial roll-out. So it is thanks only to UK Government action that there has been any connectivity at all in Orkney and Shetland.

I understand the frustration of the right hon. Member for Orkney and Shetland that things have not gone more quickly in Scotland. It has been entertaining to hear some Scottish National party Members say that things should have gone more quickly and that some of the delivery has been fragmented, because delivery in Scotland is by the Scottish Government. It is a pity and a regret, and something we have been working hard to push on, that the Scottish Government have been behind the rest of the UK in their procurement. I hope that some of the frustration that has been vented by hon. Members representing Scottish seats is directed at those who are delivering the Scottish Government contract.

Perhaps the question to ask the Scottish Government is why they have not yet managed to procure phase 2 when most of England has, and when some parts of England and Wales are moving on to phase 3. That is not a partisan point, because I will come on to the hon. Member for Ynys Môn (Albert Owen). The Labour Government in Wales have delivered effectively and, in fact, in Ynys Môn, where there is no commercial coverage at all, overall coverage is 80%. The Welsh Government have been much more on the front foot than the Scottish Government have in delivering for rural communities right across Wales.

[Calum Kerr]

It is amazing how the Minister can try to make a partisan point and claim it is non-partisan, but there we go. The Scottish Government scheme runs until the end of 2017. The Scottish Government have shown leadership with the R100 project, which is a commitment to give superfast to everyone—exactly what everyone here is asking for. Will the Minister commit to matching that ambition?

[Matt Hancock]

I do not want to point this out, but I have just commended the Labour Government in Wales for being further forward. I will come on to the universal service obligation, because more heat than light was produced by the hon. Gentleman’s contribution. We went through this at length during the Digital Economy Bill’s passage through the House, and in the end there was cross-party agreement regarding the universal service obligation, which will bring in 100% coverage by 2020—ahead, in fact, of the Scottish Government’s proposed date of 2021.