Broadband Universal Service Obligation

Calum Kerr Excerpts

Thursday 15th December 2016 Commons Chamber

[Mr Vaizey]

I am extremely grateful to my hon. Friend.

Apart from the dressing down of Lord Adonis at the Bar of the House of Commons, my main policy point is this—[Interruption.] I tried as a Minister to get a comprehensive data analysis of broadband connections, because too many independent reports are knocking about that people can use to make their own partisan points. We need Ofcom to collate these reports and to update its data, because its own data—not through its own fault but because of how long it takes to collect them—are often six months to a year out of date. We need one comprehensive UK digital report published every year by Ofcom, incorporating all the independent research.

I took refuge in the absolutely excellent independent analysis undertaken by thinkbroadband. If any hon. Members want to know how many connections they have in their constituency, they should go to the thinkbroadband website where they will get the most up-to-date and accurate information.

Having attacked Lord Adonis without his having the chance to defend himself, let me say that I thought his report was excellent, despite his pathetic attempt to promote it by putting out misleading analysis of the digital position in this country. The recommendations were spot-on, not least the recommendation that my right hon. Friend the Minister’s empire should be expanded. I tried to expand my empire when I was a Minister and I failed dismally. People will not be surprised to hear that, but my right hon. Friend is 10 times more talented and 10 times more superfast, and it is right that under his stewardship we should bring together all digital projects.

It is a scandal that we do not have broadband in trains. The reason is that that area is run by the Department for Transport and Network Rail, whereas it should be run by my right hon. Friend. It is a scandal that the Home Office is in charge of the emergency services network; it should be run by him. It is a scandal that we do not have coverage on our roads; it should be run by him. All these digital projects should be brought under one Minister, and I cannot think of anyone more talented than my right hon. Friend.

I come now to the third recommendation. We have something called Broadband Delivery UK—BDUK. The clue is in the title: the D is for delivery. Under my right hon. Friend the Minister, who is talented enough to oversee a large organisation such as that, Broadband Delivery UK should be turned into a delivery organisation that works with local councils. It should not be left to the hon. Member for Wrexham to browbeat Virgin Media to deliver broadband to his constituency; BDUK should be working with Virgin, Openreach and all the mobile operators.

Many of the problems that make us gnash our teeth and pull our hair out are down to appalling planning procedures. We all know the story of how Kensington and Chelsea would not allow BT to upgrade its network because it did not like the design of the green boxes. I have had rows with council leaders in south London who just did not like the people at Openreach and so were not prepared to move. I had telecoms companies coming to me saying that they wanted to deliver broadband to council houses but could get a wayleave from the council to do it. So much of this is about bad planning and straightforward bureaucracy.

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

Will the right hon. Gentleman give way?

[Mr Vaizey]

Finally, the Government have already shown how forward-looking they are, under the stewardship of this brilliant Minister.

[Calum Kerr]

Will the right hon. Gentleman give way?

[Mr Vaizey]

I will tell you in a minute why that is, Mr Deputy Speaker, after I have taken this noisy intervention.

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[Calum Kerr]

If I may interrupt the self-praise for one moment, I hang on the former Minister’s every word and I am worried. He said that he would make three recommendations. The second one was about giving his replacement more powers, the third was about more powers to BDUK, but the first escapes me. I am sure it will be earth-shattering, so would he mind helping me out with his first recommendation?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call the honourable Edward Vaizey.

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

Scotland aims for superfast, and my hon. Friend the Member for Inverclyde (Ronnie Cowan) demonstrated how we will make that happen—fantastic! I take it, Mr Deputy Speaker, that I have 10 minutes to make some points. I will reflect on the debate only very quickly, as there are a number of points I would like to cover that we have not got to.

First, I congratulate the hon. Member for Boston and Skegness (Matt Warman) not only on securing the debate but on his fine balancing act of calling for more while not talking down his Government. I am sure that the Ministers past and present were both grateful. We then heard some very interesting points, which I will touch on. I agree with the hon. Member for Wrexham (Ian C. Lucas), who emphasised that the regions and devolved Administrations are particularly badly affected because of our rurality. As usual, the right hon. Member for Wantage (Mr Vaizey) turned up, made some noise, praised himself and then went off to see what had been said on Twitter about it, but he raised some interesting points. I agree with him in particular on the need for digital and on the need for the Minister for Digital to have a higher profile and more responsibility in Government.

[Callum McCaig (Aberdeen South) (SNP)]

That is the crucial point. Our Minister for Digital is separate from the Department for Business, Energy and Industrial Strategy. The two of them really need to work hand in hand, so I struggle to understand why that ministerial post does not rest with the other key levers of the business and economy agenda.

[Calum Kerr]

I thank my hon. Friend, the other Callum in the House, for that excellent point. Telephony and IT used to be relegated to a subdivision of corporate structures but have now been elevated to board level. Exactly the same thing should happen to digital within Government.

With the forgiveness of other hon. Members, I will move on to some of my own specific points, simply for the sake of time—I am sure we are all dying to hear what the new Minister has to say. First, I agree that the USO is a good idea. I will agree with anything that puts more money into infrastructure and connectivity. The Government say their intention is:

“The design of the broadband USO must put people and businesses throughout the United Kingdom at its heart in order to secure the benefits of digital connectivity for as many people as possible, as quickly as possible.”

I wholeheartedly agree with that ambition, but question whether we are on the right track to meet it. In the same Department for Culture, Media and Sport document, the Government go on to say:

“The concept of universal service in telecoms is a long-standing principle, dating back over three decades”.

I also agree, to a point. But we are not talking about simple telecoms. Telephony is a binary service: it works or it does not. As we have heard very clearly, broadband is far more complex than that. I recognise that the Government, the DCMS and Ofcom understand that. A document produced alongside the Digital Economy Bill mentions upload, download, latency and other factors critical to the design of an effective USO. But there are still fundamental choices to be made about the design of the universal service obligation.

Ofcom’s summary of responses highlights two paths open to the Government. It says that respondents fall into two groups: those with a vision for a more highly specified service for all and those with a belief that people and businesses simply need a safety net. Are we talking about a vision or a safety net? My fear is—in fact, it is not even a fear, because it is clear—that to date the Government have talked about option two, a safety net.

Let us consider what the USO will look like if we stick to the current path. First, we have the fact that 10 megabits per second has been specified. We can argue whether that is the right speed. I firmly believe that it shows a lack of ambition, but I accept that some industry players say that at the moment it is fast enough. The Government need to raise the bar, particularly given their recent announcement in the autumn statement. As the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) said, 10 megabits will very quickly become out of date.

[Geoffrey Clifton-Brown]

When used with old-fashioned copper wires, 10 megabits can become a lot less than that. We need a superfast fibre infrastructure instead of copper wires.

[Calum Kerr]

I agree, and I thank the hon. Gentleman for that point.

The danger is that we are following a path similar to that taken in relation to BDUK. It is pragmatic about how much we can do for the money, instead of giving a vision of what we want to have, which is fundamental: critical infrastructure. There is also a real challenge about the ability of the USO to be upgraded. Yes it will be reviewed, and there were some excellent suggestions as to frequency, but I have serious doubts about how it is going to work.

Before I come on to that, let us talk about the telecoms elephant in the room: BT. Let us be clear that BT is the one provider that has said it will do the USO. There is a danger—if I can use that word—that it will all be given to BT. If that is the policy, so be it, but let us do it with our eyes open and be clear about whether that is the right thing to do. I can tell Members that not all my constituents would be particularly enamoured with that. We should all reflect on BT’s submission:

“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 highlights my point. If we settle for 10 megabits today, what happens when it gets upgraded to 30 megabits?

Let us consider another aspect to this: what does a universal service mean? The documents from Ofcom and the Department for Culture, Media and Sport do not hide the fact that it means something cost-constrained like the telephony USO, where a line can be installed up to the cost of £3,400 and thereafter one pays the difference. Imagine applying that in our constituencies, where the cost of broadband is significantly higher than that for telephony. Imagine I am in need of the USO. I have 2 megabits and upgrade to 10 megabits. I may have to pay, maybe I do not. What happens when we upgrade the service to 30 megabits? Do I have to pay again? Maybe I would have preferred to go to 30 megabits in the first place. There are fundamental flaws and traps ahead of us in terms of design.

The Government have choices. As I said, it feels like they are heading towards a safety net when they need to be more ambitious. Actually, was the autumn statement not a revelation? The Minister announced at the Broadband World Forum that fibre was the future and we all went, “Hurray! The Government get it!” In the autumn statement, they put some money where their mouth is. The broadband investment fund—granted, the previous Chancellor announced it—suddenly got £400 million. There was talk about a fibre spine backbone. What we have there is ambition.

The Robert Kenny report challenges assumptions about fibre and says: pick where to put in fibre first and do not do “blunt” FTTP—fibre to the premises. I think it lacks ambition in itself, but it is right in one regard: fibre has more impact in rural areas. In the Government schemes, I see absolutely nothing that will help rural areas. I see rural areas getting fobbed off with 10 megabits, whereas they should be getting fibre. If I am in an urban area with 30 megabits and go to 100 megabits, that would be fantastic but it will not change my life. If I am sat with 0.5 or 1 megabit, it would be transformational. The Government need to revisit the USO and show the same ambition.

I would like to make one final point about how this can be done. If we stick to the current path, the USO will mean nothing in Scotland—absolutely useless. We are aiming for 30 megabits. A 10 megabits USO might satisfy one or two, but that will be it. In the regions of England and in the devolved Administrations, it will mean very little. We can save the USO, however, by turning it into something more flexible—what David Cullen, chair of the Independent Networks Co-operative Association, said was a universal service opportunity. I put forward an amendment for vouchers. Vouchers would unleash the collective powers of our devolved Administrations and our country. I urge the Government to belatedly get behind that idea, because fibre is the future for rural as well as urban.

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[Matt Hancock]

Of course. Topography means that it is harder to deliver in rural areas, so we are introducing a universal service obligation to ensure that everyone can get hold of broadband.

[Calum Kerr]

I let the Minister away with this bizarre comment in Committee, but he really must stop saying that 10 megabits somehow shows more ambition than 30 megabits. The Scottish Government have a target of 30 megabits by 2021. The UK Government target is 10 megabits by 2020. I know which I prefer.

[Matt Hancock]

We have been through this before; 10 megabits is our approach for the minimum. The hon. Gentleman will have to wait and see what Ofcom has to say.

I will address a partisan point that was brought into an otherwise pretty harmonious debate by the hon. Member for Wrexham (Ian C. Lucas). The previous Labour Government did bring in a universal service obligation for connectivity that was set at 28.8 kilobits, but it was unenforced. The hon. Gentleman should stop his point scoring and stick to the bit where he said how brilliantly we are doing now with the ambition that we have put in place.

I gently point out to SNP Members that the Scottish Government are responsible for procurement in Scotland, and it is a pity that procurement there is behind almost every other area of the country. We have been doing everything that we can to push them along, but they really ought to answer for slow provision in Scotland, and I am sure that they will.

I turn to the future and the two f’s: fibre and 5G. Only 2% of premises in the country have a full fibre connection. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) talked about high levels of fibre delivery in Scotland, but that is not true. We have high levels of part-fibre delivery across the UK—it is 90% now, and it is going up to 95%—but that is not full fibre or fibre to the premises. More full fibre is being delivered elsewhere, and we are determined to match that. The autumn statement announced £1 billion for broadband and 5G, and we will consult shortly on exactly how that will be spent.