Telecommunications (Security) Bill (Seventh sitting)

Chi Onwurah Excerpts

Committee stage & Committee Debate: 7th sitting: House of Commons
Tuesday 26th January 2021 Public Bill Committees

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Matt Warman)]

It is a pleasure to be back under your chairmanship, Mr Hollobone. As we discussed during the debate on amendments to this clause in our previous sitting, clause 6 inserts proposed new sections 105N to R, providing Ofcom with strengthened powers to assess whether providers of public electronic communications networks and services are complying with their security duty. These powers are vital to enable Ofcom to fulfil its expanded and more active role, giving it the tools to monitor and assess providers’ compliance with the new telecoms security framework and providing the basis for commencing any enforcement action.

Proposed new section 105O provides the power to give assessment notices to a provider. Assessment notices may impose a duty on a provider to do a number of different things, which I will briefly summarise. First, providers can be required to carry out, or arrange for another person to carry out, technical testing in relation to their network or service. Secondly, they can be required to make staff available to be interviewed, enabling Ofcom to gain insights into how a provider’s security practices and policies are implemented.

Thirdly, providers can be required to allow an Ofcom employee or an assessor authorised by Ofcom to enter their premises to view documents or equipment. I recognise that that is a significant power, but it is necessary. It is subject to certain restrictions to protect legally privileged information and to limit entry to non-domestic premises only. To provide clarity for telecoms providers, Ofcom will also publish guidance setting out how and when it will use the power. Importantly, providers have a right of appeal.

The powers of assessment set out in the clause are key to enabling Ofcom to carry out the effective and extensive monitoring and assessment of providers’ security practices that is necessary.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to come back to this important Bill. I thank the Minister for writing to me and reassuring me on certain matters relevant to the clause. We accept the need for Ofcom to have powers to require information from vendors, but we would like a specific requirement whereby Ofcom can ask vendors for information on the diversity of their supply chains. I will leave further discussion on that for our new clauses. I will support this clause.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7

Powers of OFCOM to enforce compliance with security duties

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 8 stand part.

Clause 9 stand part.

Clause 10 stand part.

[Matt Warman]

I will seek to move relatively rapidly through these four clauses.

Clause 7 provides Ofcom with enforcement powers in relation to providers’ security duties. The Bill gives Ofcom new powers to impose tough financial penalties on providers who breach their security duties. The penalties range to a maximum fine of 10% of a provider’s annual turnover, which is in line with the maximum fines available for breaching other regulatory requirements. For continuing contraventions, Ofcom can levy a daily penalty of up to £100,000. Penalties that are generally lower than that but still significant will also apply for contravening information requirements, which are subject to a maximum penalty of £10 million or, for a continuing contravention, a penalty of up to £50,000 per day. These penalties ensure that there will be a real financial deterrent to poor security practices. I should also say that, in the most serious cases, or in cases where a provider repeatedly contravenes its security duties, Ofcom would be able to use existing powers to suspend or restrict the provider’s entitlements to provide a network or service. Clearly, that is a step that we hope the regulator will never need to take.

The clause also gives Ofcom an important new power to take action where security is being compromised or is at imminent risk of being compromised. Proposed new sections 105U and 105V of the Communications Act 2003 would enable Ofcom to direct a provider to take interim steps to secure its network or service while Ofcom investigates or pursues further action. This power recognises that contravention of a security duty could result in a security compromise that causes real damage to users of that network or service. Where Ofcom uses that power, it will be required to commence and complete the enforcement process as soon as is reasonably practicable. The clause gives Ofcom the tools it needs to effectively enforce compliance with the new security framework.

Clause 8 sets out the position for bringing civil claims against providers who breach their security duties, which is a matter we touched on in earlier debates. It enables providers to be held accountable not just by Ofcom but by service users, such as members of the public, in cases where loss or damage is sustained by those users as the result of a breach of a duty. Providers owe a duty to any person who may be affected by a contravention of their security duties to take security measures, to comply with specific security duties in any regulations and to inform users of security compromises.

This clause allows any affected person to take legal action should providers breach those security duties. However, any affected person can bring legal proceedings against a provider only with the consent of Ofcom, which may be subject to conditions relating to the conduct of the legal action. This reflects the existing position in the Communications Act 2003 and ensures that providers face legal action only in appropriate circumstances. The clause also makes providers responsible to their users, providing another source of accountability. It allows users to bring legal claims for any losses they have suffered, which is only fair and reasonable.

Clause 9 addresses the interaction between provisions in the Bill and other legislation, specifically national security, law enforcement and prisons legislation. The security duties created by the Bill do not conflict with duties imposed on communications providers by other legislation via these clauses. Equally, we do not want the Bill to affect adversely the important work carried out by our law enforcement agencies, criminal justice authorities and intelligence agencies. The clause gives that clarity to providers about their responsibilities.

Finally, clause 10 requires that Ofcom publish a statement of policy about how it will fulfil its general duty and use specific powers to ensure that providers comply with their security duties. This will provide welcome clarity to industry about the expected use of important new powers. I beg to move that these clauses stand part of the Bill.

[Chi Onwurah]

I will not detain the Committee long, as we are cracking on through the clauses. I will only emphasise that these clauses give Ofcom broad powers—very broad powers—and measures of enforcement, as well as placing duties on the network operators to all users of their network services. We support these broad powers, but it is incumbent on the Minister and indeed on the Committee to consider whether those powers will receive sufficient scrutiny, and sufficient oversight and input from our security services. We anticipate debating those particular questions in more detail later today. In the meantime, we will not stand in the way of these clauses standing part of the Bill.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clauses 8 to 10 ordered to stand part of the Bill.

Clause 11

Reporting on matters related to security

[Chi Onwurah]

I beg to move amendment 14, in clause 11, page18, line 26, at end insert—

“(aa) an assessment of the impact on security of changes to the diversity of the supply chain for network equipment;”

This amendment requires that network supply chain diversification is included in Ofcom reports on security.

[The Chair]

With this it will be convenient to discuss the following:

Clause stand part.

Clause 12 stand part.

Clause 13 stand part.

[Chi Onwurah]

We start this debate where we ended our sitting on Thursday, on the diversity of the supply chain. But this is not groundhog day; this is a very different aspect of the diversity of the supply chain. I hope the Minister has noticed that there are three themes to our amendment: national security, diversity of the supply chain and appropriate scrutiny. Those are our key concerns about the Bill as it stands.

We wish to see the Bill debated as speedily as possible. For the record, I reiterate my concern that, in the midst of a pandemic lockdown, where the advice is to stay at home, the Leader of the House requires that Members of Parliament should congregate in one room for several hours. With that in mind, we are cracking on as quickly as possible, and we have made significant progress only this morning. However, we feel strongly that, given the speed at which we are providing the appropriate scrutiny, more time should be devoted to debating the Bill on the Floor of the House. We are cracking on in order to protect, as far as we can, the public health of Members of Parliament, staff, House officials and Clerks, who are doing an amazing job in the midst of a pandemic.

Clause 11 makes provision for reporting by Ofcom on security matters. That includes a duty to provide an annual security report to the Secretary of State. Amendment 14, in my name and those of my right hon. and hon. Friends, requires that network supply chain diversification is included in Ofcom’s report on security. As I said, we anticipate having a broader debate this afternoon on the importance of the diversification of the supply chain to security, as part of the debates on our new clauses, so I will only summarise our key points and concerns now.

This amendment follows amendment 13, which sought to give Ofcom the power to request reports from operators on their supply and the progress of their supply chain diversification. We support steps to remove high-risk vendors from the UK networks, but they must go hand in hand with credible measures to diversify the supply chain. I am afraid it remains the fact that we have no reference to the diversification of the supply chain in the Bill, despite the fact that, as I will briefly outline, both the Secretary of State and experts during our evidence sessions emphasised that we could not have network security without effective diversification.

We cannot have a robust and secure network with only two service providers. Supply chain diversification is absolutely vital to protecting our national security. If a vulnerability exists in one vendor or service provider, that intrusion may be limited to that one vendor or service provider alone. A diversity of suppliers in the supply chain limits the exposure of vital information. This amendment ensures that network supply chain diversification is addressed in Ofcom’s report on security. My key question to the Minister is, how can Ofcom report on security if it is not reporting on supply chain diversification?

The Minister may well say that Ofcom has the power to report on supply chain diversification and to request information on supply chain diversification. As I have said on a number of occasions, the powers in the Bill are broad. That is why effective scrutiny requires some specification of what will be reported upon.

The security report to the Secretary of State should be made as

“soon as practicable after the end of each reporting period”

and

“must contain… information and advice… to assist the Secretary of State in the formulation of policy”.

It must also include the extent to which providers have complied with security duties. That is as an example of some of what may be included in the security report. Given that the Secretary of State has said on a number of occasions that supply chain diversification goes hand in hand with the security of the network, it is essential that supply chain diversification is specifically mentioned in the Bill, so that we can have accurate and detailed reports from Ofcom on key aspects of network security.

The amendment will help provide the Secretary of State with the information to update Parliament on the progress of the Government’s diversification strategy, depending on Ofcom’s findings. The Secretary of State has promised to give Parliament such updates, so this is an enabling amendment to ensure that the Secretary of State has the information he needs to provide the reporting that he has committed to.

In support of the amendment, I would like to cite one of the witnesses in our evidence sessions. Dr Alexi Drew, from Kings College, London, was asked whether it was possible to have a secure network without a diverse supply chain, and answered:

“That is a great question that comes with a very simple answer: no. The worst-case scenario for creating a risk in this sense is when monopoly meets supply chain—insecure supply chain in this case. Arguably, the reason why SolarWinds was so successful is that it provided the same service to so many different organisations and departments in the United States. Therefore, if you access one—SolarWinds—you access almost all. That is the risk.”—[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 87, Q110.]

That is a risk that, I am sorry to say, the Bill currently does not sufficiently address. I hope that, by accepting this amendment, the Minister will recognise that we are, as always, seeking to improve the Bill and to ensure that it provides a credible and effective means to secure our networks.

With regard to clauses 11, 12 and 13 stand part, we recognise the importance of providing Ofcom with the appropriate powers to request information, but also to share information related to security. In that respect, these provisions are ones that we can support.

[Matt Warman]

I welcome the spirit of the amendment. I think that the hon. Lady and I share the same ambition. I know that she wants to have the proper debate later, so we look forward to that.

Clause 11 inserts into the Communications Act 2003 proposed new section 105Z, which deals with Ofcom’s reports on security. It requires Ofcom to produce such reports within two years of the Bill receiving Royal Assent and every 12 months thereafter. As the hon. Lady said, amendment 14 is similar to the amendment to clause 6 that we discussed previously. Ultimately, when considering Ofcom’s role and specifically its reporting function, we should note that proposed new section 105Z(2) requires Ofcom security reports to include such information and advice as Ofcom considers may best assist the Secretary of State in the formulation of policy on telecoms security. That could go beyond the list in proposed new subsection (4) to include other relevant information, such as that related to diversification. The Secretary of State can also direct Ofcom to include information that goes beyond that list.

As the Committee and, indeed, Ofcom will be well aware, the Government have recently published a targeted diversification strategy, which will deliver lasting and meaningful change in the 5G supply chain and pave the way for a vibrant, innovative and dynamic supply market. We heard widespread support for the strategy from witnesses during the oral evidence sessions. The strategy demonstrates our commitment to building a healthy supply market and is backed by a £250 million initial investment.

We have publicly announced that the Government will be funding the creation of a UK telecoms lab to research and test new ways of increasing security and interoperability, and we are already partnering with Ofcom and Digital Catapult to fund the industry-facing test facility SONIC—the SmartRAN Open Network Interoperability Centre. Both of those will play a key part in our investment in diversification and demonstrate Ofcom’s existing part in it.

As already mentioned, amendment 14 would require Ofcom to include in its security reports

“an assessment of the impact on security of”

any

“changes to the diversity of the supply chain for network equipment”.

As that requirement is already essentially covered by Ofcom’s existing powers, the amendment is not necessary. The inclusion of any such information is already within Ofcom’s discretion, but I am sure that we will discuss it more later on, as the hon. Lady said.

Clause 12 expands Ofcom’s information-gathering powers for the purposes of its security functions and enhances its ability to share the information with the Government. It enables Ofcom to require a provider to produce, generate, collect or retain security information, and then to analyse that information. Any information sought using this power must always be proportionate to how Ofcom will use it.

Clause 13 makes provision in connection with the standard of review applied by the Competition Appeal Tribunal in appeals against certain of Ofcom’s security-related decisions. Ofcom’s regulatory decisions are subject to a right of appeal to the tribunal, and that will also be the case for most of Ofcom’s decisions relating to the exercise of its regulatory powers conferred by the Bill. This clause makes provision to ensure that the tribunal is not required to modify its approach in appeals against relevant security decisions, and should instead apply ordinary judicial review principles.

I hope that I have sufficiently explained to the Committee why amendment 14 is unnecessary and why clauses 11 to 13 as drafted should stand part of the Bill.

[Chi Onwurah]

I thank the Minister for his comments. Although we agree on many things in many areas, I think that in this case he is trying to have his cake and eat it, inasmuch as he is saying that amendment 14 is not necessary because Ofcom already has the powers, but he is reluctant or is refusing to specify that those powers will be used for the objective of reporting on the progress of diversification of the supply chain. It was good to hear the Minister reiterate the importance of diversification of the supply chain, but I remain confused about whether he agrees with the evidence and, indeed, with his own Secretary of State that diversification of the supply chain is a prerequisite of the security of our networks and, indeed, our national security—that is what we are discussing with regard to our telecoms networks. If diversification is a prerequisite, why is the Minister so reluctant to refer to it? If he is so confident in the plan to diversify our supply chains, why is he so reluctant to insert any requirements to report on the progress of that diversification?

I listened intently: the Minister said that Ofcom has the powers to report on whatever it considers to be relevant to security. During the evidence session, we heard from Ofcom itself, very clearly and repeatedly, that it is not for Ofcom to make decisions on national security. It will not make national security decisions. That is not within its remit and responsibilities; the witnesses from Ofcom stated that repeatedly and clearly. I would be happy to read from Hansard if that point is in question. Given that Ofcom will not make security decisions and that the diversification of the supply chain is essential for security, I am at a loss to understand why the Minister will not accept a reference to reporting on the progress of diversification. Although, unfortunately, the pandemic means that we are not at full strength on the Opposition side of the Committee, I wish to test the will of the Committee on the amendment.

Question put, That the amendment be made.

--- Later in debate ---

Reviews of sections 1 to 13

[Chi Onwurah]

I beg to move amendment 15, in clause 14, page 21, line 28, leave out from beginning to end of line 30 and insert—

“(3) The reports must be published not more than 12 months apart for the first 5 years, then not more than 5 years apart.

(4) The first report must be published within the period of 12 months beginning with the day on which this Act is passed.”.

This amendment requires the Secretary of State to report on the impact and effectiveness of clauses 1 to 13 every year for the first five years after the Act is passed, and then every five years following.

The amendment reflects another of our key concerns about the Bill, which is the level and extent of appropriate scrutiny for such broad and sweeping powers. It seeks to ensure appropriate scrutiny. Clause 14 requires the Secretary of State to review the impact and effectiveness of clauses 1 to 13 at least every five years. Our amendment would require the report to be published every year for the first five years after the legislation is passed, and then up to every five years after that.

As we have said, the Bill gives the Secretary of State and Ofcom sweeping powers. We want to ensure both that they are proportionate and that there is accountability. As we have previously emphasised, we are sure that the Minister and the Secretary of State are inclined to exercise the powers in a proportionate and accountable way, but they will not be in their posts forever, and perhaps not for the entire first five years of the legislation’s operation, so it is important that the Bill requires that Parliament be able to scrutinise its effectiveness, as that is so important to our national security. In that sense, this amendment follows amendments 5, 9 and 10 with respect to the requirement for appropriate oversight and accountability.

I emphasise—I am sure that you will understand, Mr Hollobone—that in some ways we are here because of a lack of effective parliamentary scrutiny of the presence and growth of high-risk vendors in our networks. It was only when Parliament became aware of and was able to give its full-throated input on concerns about the dominance of high-risk vendors in our telecommunications market that the Government took action. We do not want to be in the position of finding again that there has been a dramatic change in the security of our networks without appropriate scrutiny.

Clause 14 states that the Secretary of State must

“carry out reviews of…impact and effectiveness”

and that the report must be laid before Parliament for parliamentary scrutiny. However, we are to wait up to five years before it will be made possible to give parliamentary scrutiny to a Bill that is so important to national security, as both the Minister and the Secretary of State, and indeed the security services, have emphasised. We are not to review its effectiveness for five years.

[Sara Britcliffe (Hyndburn) (Con)]

Does not the clause state that the period is up to five years? The review could be done during that period; it would not have to be at the five-year mark every time.

[Chi Onwurah]

The hon. Lady is absolutely right. The clause enables the Minister or Secretary of State to choose to lay a report more frequently. Again, I do not want to impute anything against the Minister or the Secretary of State, but given the importance of the subject and of parliamentary review, why not ensure that it is more frequent?

I am sure that the hon. Lady will agree that Parliament has many things to consider, and so does the Secretary of State. There is competition for parliamentary time, particularly in a pandemic and in view of the challenges that we shall face in the next few years. How can I put this? We have concerns that the priority may slip in the face of, for example, economic challenges, investment challenges and recovery challenges. We want to be sure what is happening. We are the party of national security and we want to ensure that, in this context, national security is brought to Parliament to be debated, discussed and reviewed at least every year.

--- Later in debate ---

[Matt Warman]

I listen with interest to the points that the hon. Lady makes, and to the assertion that she is a member of the party of national security. I welcome her to this side of the House, if that is the case. [Interruption.] Thank you, but no.

As the hon. Lady says, clause 14 is a review clause requiring the impact and effectiveness of clauses 1 to 13 to be reviewed at least every five years by the Secretary of State. The review report must be published and laid before Parliament, but it is by no means the only source of parliament scrutiny, as she knows. Her amendment would increase the frequency of these reports to every year for the first five years after the Bill is passed and then every five years thereafter.

Increasing the frequency of the reports would bring its own challenges for a number of reasons. First, the framework is considerably different from the previous security regime in the Communications Act 2003. It seems to me that we will not be able fully to assess the impact and effectiveness of the new security regime instituted by clauses 1 to 13 until all parts of the framework, including secondary legislation, codes of practice and other things, have been in place for a reasonable period of time. The code of practice that will provide guidance on the detailed security measures that telecoms could take is intended to set clear implementation timelines. Some measures may require significant operational change, as we heard in the evidence sessions for telecoms providers, and we are aware that that may be costly. For that reason, we cannot reasonably expect all changes to be implemented instantly or, indeed, all necessarily at the same time.

There is a further practical difficulty with the amendment. If the first report is to be produced 12 months after Royal Assent, it will require the review to be undertaken well in advance of that deadline. That means that the report will represent an incomplete picture of the Bill’s impact, even at its very first production. Some measures will not even have been implemented by telecoms providers.

My hon. Friend the Member for Hyndburn was exactly right that the current requirement for publishing reports is at least—rather than at most—every five years. We have been deliberate in our choice of this timeframe because five years is the reasonable point by which we expect the majority of telecoms providers to have implemented most, if not all, changes. It is therefore considered appropriate to require a report on the impact and effectiveness of the framework by that time. I recognise that five years is a long time. That does not mean that the framework will be free from scrutiny in the intervening period. As clause 11(3) sets out, the Bill amends section 134B of the Communications Act so that Ofcom’s regular infrastructure reports will include information on public telecoms providers’ compliance with the new security framework. Ofcom publishes the reports annually, rendering the amendment unnecessary.

[Chi Onwurah]

On a point of clarification, I have the impression that the Minister anticipates that the first report under the Bill would only happen once all the requirements had been implemented. I think that that implies that it would only happen once a high-risk vendor, specifically Huawei, had been removed from the network.

[Matt Warman]

No is the short answer, because while this is a progress report, five years from 2021 is 2026—the deadline is 2027, even at the most extreme end, which is not where we anticipate it will end up—and it would be before the point that she identifies.

The infrastructure reports from Ofcom will help to provide Parliament and the public with a view on how telecoms providers are progressing with compliance with the new framework. As I alluded to earlier, they are not the only means of parliamentary scrutiny. We have the Intelligence and Security Committee and we have Select Committees. I suspect that there might be one or two debates on this matter over the next five years as well. To pretend that this is the only method of parliamentary scrutiny is not accurate.

[Chi Onwurah]

If the Minister will give way briefly, he may find it saves time. To clarify: for the first report we will not necessarily have to wait until all the provisions of delegated legislation associated with the Bill are in place. As for the infrastructure reports that Ofcom publishes, to which he refers as a form of alternative scrutiny, will they, might they or will they not reflect progress in the diversification of the supply chain?

[Matt Warman]

The hon. Lady asks me to predict what is in a report that has not been written yet by an organisation that is not a Government Department. I agree with the principle of what she is saying. This is an important aspect and one would reasonably expect it to be reflected in the reports that we have talked about. It is, however, important overall to say that Ofcom’s own regular infrastructure reports will, as I have said, include information on public telecoms providers’ compliance with the new security framework, which is the broadest interpretation and gives a huge amount of latitude for the sorts of information that she seeks. I hope that those infrastructure reports will help to provide Parliament with the kind of scrutiny that she seeks, and the public with the kind of scrutiny that we all seek. [Interruption.] For those reasons I hope that she will withdraw the amendment.

[Chi Onwurah]

I thank my right hon. Friend the Member for North Durham for an exciting intervention from his phone, and I thank the Minister for his comments. As I think I have said, I spent six years working for Ofcom with the Communications Act 2003 on my desk. I know the importance that our independent regulator places on the words of the Minister during such debates as this. As he has indicated that the reports would do well to include reference to everything that appertains to security, including the diversification of supply chain, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14 ordered to stand part of the Bill.

Clause 15

Designated vendor directions

[The Chair]

With suitable musical introduction, I call Kevan Jones to move amendment 16.

--- Later in debate ---

[Mr Jones]

I thank the Minister for his reply. I do not question his commitment to ensuring that we have security at the heart of the Bill, and I do not intend to press my amendments to a vote.

[Chi Onwurah]

I will speak to amendments 18 and 19, standing in my name and those of my hon. Friends, and to clauses 15 to 17. As the Minister set out, the clauses are about key powers in the Bill that seek to secure our networks and to regularise requirements already in place, albeit informally or not legally, to remove Huawei as a specific high-risk vendor from our networks. The clauses give Government the powers to do what they have said they will do.

On the clauses, I will not repeat what the Minister said, and I congratulate him on clearly setting out their powers, which the Opposition believe are necessary. I also join the Minister and my right hon. Friend the Member for North Durham in paying tribute to our security services, which do such great work to keep us secure across a wide range of threats and challenges—both present and evolving—and on whose continued work and effectiveness the Bill is highly dependent. As my right hon. Friend set out, we want to ensure that national security is absolutely at the heart of the Bill.

--- Later in debate ---

[The Chair]

Order. The hon. Lady has done really well, but we are not debating clause 17 stand part. She can refer to the other clause if she wishes.

[Chi Onwurah]

Thank you for the clarification, Mr Hollobone. I see that we are discussing whether clauses 15 and 16 stand part. I support those clauses and look forward to the Minister’s response to the amendment.

[Matt Warman]

I pre-emptively covered a lot of the hon. Lady’s questions, but I will say two brief things. She talked about consolidation in the cloud sector. While the Bill is very much a national security Bill, the National Security and Investment Bill would cover consolidation in that sort of sector, rather than this one. Obviously they do work together.

[Chi Onwurah]

The point I am making—clearly, I did not make it effectively—is that that sector is becoming this sector. The cloud sector is becoming the telecoms sector. The reason we need this Bill in addition to the National Security and Investment Bill is to address the security concerns of the telecoms sector specifically. The cloud sector is becoming part of the telecoms sector, yet the Bill does not address those concerns.

[Matt Warman]

The hon. Lady is not wrong, obviously, in the sense that there is a potential conversation to be had about when a cloud provider is a telecoms provider and vice versa, if I can put it like that, although it is not the most elegant way of doing so. However, the point is that the reason we have comprehensive coverage of the landscape is because we have both the National Security and Investment Bill, which she debated recently, and this Bill. The broad powers that she described are intended to provide precisely that sort of coverage.

Similarly, the hon. Lady referred to the length of the list in clause 16 of matters that can be taken into consideration. That relates to the point I made previously, namely that the sorts of issues that she is talking about, such as data flows, are already covered in the long list. The list is as long as it is because it is intended to look to the future. Therefore, being prescriptive in the way that she describes is fundamentally unnecessary. We are not excluding what she wants to be on the list. A matter is already very much there if it is pertinent to national security. For that reason, I do not think there is a compelling case to add that single topic to the list, both because it is already there and because if we start going down that route, we could make the case for adding a host of other things that are already covered but that people might want to be mentioned specifically.

As I said earlier on the convergence of the two sectors, the point is that we have comprehensive coverage through both Bills. It will be for the NCSC, Ofcom and the Government to make a judgment as to whether any consolidation in a sector poses a national security risk.

--- Later in debate ---

[Mr Jones]

My hon. Friend the Member for City of Chester said that we were going over old ground, and to a certain extent we are because some of the amendments reflect those that I moved last week.

May I say at the outset, Mr Hollobone, that the Minister has been an exemplar in engaging with and briefing the ISC? He has set something of a precedent; usually we have only Cabinet Ministers or Prime Ministers before us to give evidence. He is one of the few junior Ministers to have appeared before us, so I congratulate him. He did it because he wanted to engage with the issues. He must therefore be commended on his commitment to ensure that there is scrutiny. However—this is not to wish his demise, but to argue for his promotion—he will not be there forever. I think he does not quite understand why the Government are not at least moving on this.

The ISC’s remit is defined in the Justice and Security Act 2013. It sets out which Departments we cover, and the Department for Digital, Culture, Media and Sport is not one of them. However, as I said last week, security is increasingly being covered by other Departments, and this Bill is a good example. The National Security and Investment Bill is another one, where security decisions will be taken by the Secretary of State for Business, Energy and Industrial Strategy. Parliament must be able to scrutinise that.

If a high-risk vendor is designated as banned from the network by the Secretary of State for Digital, Culture, Media and Sport, there are perfectly good reasons why the intelligence behind that cannot be put into the public domain. The methods by which such information is acquired are of a highly sensitive nature, so it would not only expose our security services’ techniques, but in some cases would make vulnerable the individuals who have been the source of that information. I think most people would accept that that is a very good reason.

This sort of thing is happening increasingly. We have the two Bills that I have referred to, but we also have the Covert Human Intelligence Sources (Criminal Conduct) Bill, which will come back to the House tomorrow. Covert human intelligence and the ability to collect intelligence on behalf of our security services is very important. Most of that is covered by the Home Office, and covert human intelligence sources are covered by the ISC’s remit and can be scrutinised. However, there is a long list of other organisations that will be covered by tomorrow’s Bill, including—we never quite got to the bottom of this—the Food Standards Agency, for example. Again, how do we ensure that there is scrutiny of the decisions?

We also have—this has come out of the pandemic—the new biosecurity unit in the Department of Health. Again, there is no parliamentary scrutiny, because the Health and Social Care Committee will not be able to look at the intelligence that supports so much of that. An easy way out of this is in the Justice and Security Act 2013: the memorandum of understanding, which just means that, were our remit extended to look at this and other matters, the ISC could oversee and ask for the intelligence.

Having spoken to the Business Secretary and the Minister, who sympathises with us, I am not sure where the logjam is in Government. The point is that an amendment will be tabled in the Lords. Whether the provision is in the Bill or just in the memorandum of understanding between the Prime Minister and the ISC, it is easily done and would give confidence that the process at least had parliamentary oversight.

On many of these decisions, frankly, the oversight would not be onerous; we are asking only that we are informed of them. On some occasions, we might not even want to look at the intelligence. It might be so straightforward that, frankly, it is not necessary, so I do not think that it is an administrative burden. I cannot understand what the problem is. To reiterate what I said last week in Committee, it is not about the ISC wanting to have a veto or block over such things. It is, rightly, for the Government and the Secretary of State to make and defend those decisions.

It is also not about the ISC embarrassing the Government, because we cannot talk in public about a lot of the information that we receive. It is not as though we would publish a publicly available report, because of the highly classified nature of the information. However, the ISC can scrutinise decisions and, if it has concerns, write to the Prime Minister or produce a report for the Prime Minister raising them. That gives parliamentary scrutiny of the Executive’s decisions.

As I say, the report might not be made public. People might ask, “Would that be a new thing?” No—it happens all the time. For example, on the well-publicised Russia report this year, there was a public report with redactions in it and quite an extensive annex, which raised some issues that we were concerned about. That annex was seen only by individuals in Government, including the Prime Minister.

There is already a mechanism, so I fail to understand why the Government want to oppose this. From talking to Ministers privately, I think that there is a lot of sympathy with the position and I think that we will get there eventually. How we get there and in what format, I am not sure—whether the method is to put it in the Bill or to do it through the mechanism in the 2013 Act. That might be a way forward.

[Chi Onwurah]

I rise to support the excellent comments made by my hon. Friend the Member for City of Chester and my right hon. Friend the Member for North Durham. I did well to delay my remarks till after my right hon. Friend had spoken, because he has set out very effectively, based on his considerable experience as a long-standing member of the Intelligence and Security Committee, both why it is important that that Committee should be consulted and receive the reports, and why it is hard to understand the Minister’s reluctance both in this Bill and in the National Security and Investment Bill to involve a source of such credible security expertise and, importantly, security clearance in key issues of national security.

I want to add two points to those made by my right hon. and hon. Friends. The first is to reiterate a point made previously: our security threats are changing, evolving and, unfortunately, diversifying. We see that in changes to our defence spending, in changes in the national review of our defence capabilities, and in changes in the evolution of the geopolitical landscape—the potential source of threats. However, the Minister does not seem able to support reflecting that by ensuring that, rather than keeping to our existing modes of parliamentary scrutiny, we enable parliamentary scrutiny of issues of national security by those who are best placed to carry out such scrutiny—undoubtedly members of the Intelligence and Security Committee.

I want to point briefly to a discussion in the evidence sessions. Ofcom made it clear that it does not consider itself in a position to make national security decisions, which is understandable, and that some of the decisions and considerations about national security with regards to telecommunications networks would require people who have STRAP clearance. Ofcom’s group director for networks and communications pointed to the fact that she had had STRAP clearance previously, and she said that if the NCSC

“feels that that is needed for the type of information that we may need to handle, we would make sure that happened.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 90, Q115.]

To my knowledge, Digital, Culture, Media and Sport Committee members do not have STRAP clearance. I would like the Minister to comment specifically on the level of security clearance required for members of the Committee that he has identified as being the location for scrutiny of important issues of national security. What level of security clearance do its members have? Would that enable the scrutiny that we all agree is in the best interests of the Bill?

I would like the Minister to respond to a specific example. Amendments 20, 22, 23, 24 and 25 are designed to require that the Intelligence and Security Committee has access to the appropriate information. There is a requirement for the Secretary of State to lay before Parliament a copy of a designated vendor direction, as set out in clause 15, which inserts new section 105Z11 into the Communications Act 2003. The new section states:

“The Secretary of State must lay before Parliament a copy of—

(a) a designated vendor direction;

(b) a designation notice;

(c) a notice of a variation or revocation of a designated vendor direction; and

(d) a notice of a variation or revocation of a designation notice.”

So far, so good—we have that scrutiny. However, the new section also says:

“The requirement in subsection (1) does not apply if the Secretary of State considers that laying a copy of the direction or notice (as the case may be) before Parliament would be contrary to the interests of national security.”

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[The Chair]

We are.

[Chi Onwurah]

We support clause 17 and our amendments are intended to make it more accountable to Parliament and therefore more successful and effective in securing our national security.

[The Chair]

Order. I misled the hon. Lady. We are now discussing amendments 20 and 22 to 25. When we finish the debate on those amendments, we will debate clause 17 stand part. The hon. Lady may want to save this part of her remarks until the next debate.

[Chi Onwurah]

Thank you, Mr Hollobone. It is sometimes confusing to know exactly what is being discussed at what point. With that, I ask the Minister to respond to our concerns about the scrutiny of the powers in the clause.

[Matt Warman]

I welcome the second salvo in the campaign to address this matter by the right hon. Member for North Durham. He said it would be an ongoing campaign.

This group of amendments would require the Secretary of State to provide information relating to a designated vendor direction or designation notice to the ISC. The amendments would require the Secretary of State to do this only where directions and designation notices had not been laid before Parliament, whether in full or in part, as a result of the national security exemptions in clause 17. It will not surprise the right hon. Member for North Durham or other Opposition Members that some of these short remarks will overlap with the conversation that we had earlier on a similar matter.

Amendment 20 would require designated vendor directions or designation notices to be provided to the ISC. Amendments 22 to 25 would require the Secretary of State also to provide the ISC with copies of any notifications of contraventions, confirmation decisions and so on. Although I recognise some Members’ desire for the ISC to play a greater role in the oversight of national security decision making across government, including in relation to this Bill, the amendments would, as the right hon. Member for North Durham knows, extend the ISC’s role in an unprecedented way. None the less, I thank his welcome for my unprecedented appearance.

As I said in the debate on amendment 9, the ISC’s primary focus is to oversee the work of the security and intelligence agencies. Its remit is clearly defined in the Justice and Security Act 2013, and the accompanying statutory memorandum of understanding, to which the right hon. Gentleman referred. I do not think he thinks it is my place to take a view on that role, and I do not think this Bill is the place to have that debate.

Telecommunications (Security) Bill (Fifth sitting)

Chi Onwurah Excerpts

Committee stage & Committee Debate: 5th sitting: House of Commons
Thursday 21st January 2021 Public Bill Committees

[The Chair]

Before we begin, I have a few preliminary announcements.

Members will understand the need to respect social distancing guidance. I am told here that I shall intervene if necessary to remind everyone. Mr Speaker has asked that Members wear masks in Committee, except when speaking. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Hansard colleagues will be grateful if Members could email their speaking notes to [e-mail].

We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. This shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments do not take place in the order that they are debated, but in the order that they appear on the amendment paper. That is often confusing for Members, young and old alike. The selection and grouping list shows the order of debates. Decisions on each amendment are taken when we come to the clause to which the amendment relates.

Clause 1

Duty to take security measures

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I beg to move amendment 7, in clause 1, page 1, line 19, at end insert—

“(ba) the presence in the network or service of supply chain components which represent a threat to national security;”.

This amendment would add the presence of supply chain components which represent a security threat to the list of “security compromises” which network and service providers must take security measures against. “Supply chain components” are defined by Amendment 8.

[The Chair]

With this it will be convenient to discuss amendment 8, in clause 1, page 3, line 17, at end insert—

“‘supply chain components’ means the sequence of processes involved in the production, distribution and maintenance of networks and services.”

This amendment defines “supply chain components” for the purposes of Amendment 7.

[Chi Onwurah]

It is a great pleasure to serve under your chairship, Mr Hollobone, and to see the Bill Committee present. I thank all its members for taking part, and I observe that the room is a lot warmer than it was in December, when the National Security and Investment Bill was in Committee. I hope that we will continue like that. I also thank the Clerks and all the members of House staff who have supported us with the amendments and on the Bill more generally.

I crave your indulgence, Mr Hollobone, to start with a few opening remarks that will be helpful in understanding the Opposition’s approach to this amendment and to the Bill as a whole. To give the context, I worked as an electrical engineer for 20 years before entering Parliament. I am still a chartered engineer and proud of that. As an engineer, I worked all over the world helping to build out the networks—fixed, wireless and mobile—that became the internet and on which this Bill is intimately focused.

I should also declare an interest. Many of the provisions of the Bill deal with the regulator, Ofcom, and I joined Ofcom in 2004, just a few weeks after it was born, when it was to be a light-touch regulator, small and nimble. Over the years, it has acquired responsibility for critical national infrastructure, the BBC, the Post Office, soon the entirety of online harms and now, it would appear, national security as well. I have been calling for greater security, in particular for our mobile networks, for many years now, so I and the Opposition welcome the aims of the Bill, and the Bill itself. However, many areas within it need to be addressed.

As I have declared my personal and professional interest in the telecoms network, Mr Hollobone, you will not be surprised to hear that I am thrilled that we will spend so many hours of our parliamentary democracy time here in this room, dedicated to debating our telecommunications infrastructure. But, to my regret, the Committee is not taking advantage of the very telecoms infrastructure with which it is dealing. I would like to place on the record that we believe holding this Bill Committee physically rather than virtually is putting Members of the House, Clerks and House staff at risk from the coronavirus pandemic, and we feel that it is our duty, as a reasonable and responsible Opposition, to ensure that that risk lasts for as short a time as possible. Therefore, we are going to crack on as quickly as possible through as many clauses as possible, while maintaining appropriate levels of scrutiny. I want to put the Government on notice that we expect as a consequence to have more time on the Floor of the House on Report to consider the Bill, because we do not feel that it would be wise to dwell on many of its important themes when we are meeting physically in one room at a time of national pandemic and lockdown.

To keep all Members and staff as safe as possible, we will have a laser-like focus on three primary areas. The first is national security. Labour prioritises national security, but failings in the Bill show the Government are taking risks with our security-critical national infrastructure and economic security, and we will highlight those failings constructively whenever we can. Secondly, the security of our networks depends on an effective plan to diversify the supply chain, which should include support for UK capability, and we are very concerned that the Bill short-changes both our national security and our telecoms infrastructure by not including more references to the Government’s diversification strategy; it is a weak strategy and we will try to overcome that. Thirdly, the Bill also gives sweeping powers to the Secretary of State and Ofcom, including sweeping powers over security. As my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said on Second Reading, the Department for Digital, Culture, Media and Sport is not known for its understanding of or expertise on national security, and we want to take measures to address that.

Security is the primary concern of amendment 7, which was tabled by my right hon. Friend the Member for North Durham. It seeks to add the presence of supply chain components that represent a security threat to the list of security compromises that network and service providers must take security measures against. Supply chain components are defined in amendment 8, for the purposes of amendment 7.

[James Wild (North West Norfolk) (Con)]

Amendment 7 refers to national security. I note that the Opposition have not tabled a definition of national security, which is an issue we have considered in other debates. Is there a reason why the hon. Lady now accepts that we should not define national security?

[Chi Onwurah]

I thank the hon. Member for his intervention, which raises a really important point that I will say something about. As I am sure you are aware, Mr Hollobone, yesterday was the Third Reading of the National Security and Investment Bill. I refer Members to the report by the Select Committee on Foreign Affairs, published on Tuesday, on the critical issue of national security and its definition. In fact, the Opposition sought to put into the National Security and Investment Bill not a definition of national security but a minimum standard of what national security should refer to. We wanted to include elements such as critical national infrastructure—of course, telecoms infrastructure is a part of that—and supply chains, which the amendment deals with, and also human rights. I do not want to anticipate what we might table in future, but one reason we have not so far tabled a framework for guidance in national security is that we had hoped that the Minister responsible would recognise both the advice of the Foreign Affairs Committee and the Intelligence and Security Committee in giving greater guidance on what national security was, and that that was a better place for it.

[Christian Matheson (City of Chester) (Lab)]

The other opportunity for the definition to be addressed would be when the Government next produce their defence and security review, which comes out no more than every five years. They might address what national security is or whether it is indeed desirable, as my hon. Friend has said, to specify that in an ever-changing world.

[Chi Onwurah]

I thank my hon. Friend for that helpful intervention. I do not want to take up too much of the Committee’s time on the way in which national security should be defined, or guidance given, although it is relevant to the Bill. As my hon. Friend says, there are other places where a framework for understanding national security would be better placed. One of our concerns about this Bill is that, as I have alluded to, Ofcom and the Department are not experienced in security issues, and they are not the best organisations to make security decisions. Putting a framework to define national security in the Bill might not be as helpful, but if as our debates progress we see a need for greater clarity on guidance around national security, and it is not to be found anywhere else, we might take up his challenge, and I hope to have his support if that should happen.

With regard to the amendment, it is important that the supply chain components are understood. As we proceed through the Bill, we will come to understand better that the steps to remove high-risk vendors from UK networks that the Minister is in the process of taking are welcome, but that is not enough to secure our networks. We also need an effective diversification of our network supply chains. Part of the challenge here is that if we remove high-risk vendors, as the Bill enables, and leave only one or two approved vendors, our networks remain insecure because they are less resilient. In fact, they are not resilient at all. The loss of one vendor would mean that there would be only one vendor for our entire 5G network supply chain, as things stand.

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[Mr Kevan Jones (North Durham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I apologise for my late arrival, but I was asking a question of the Health Secretary on the vaccine roll-out. When we look back at the time before the pandemic, would we have thought that part of our critical national infrastructure would be vaccine production? As my hon. Friend the Member for Newcastle upon Tyne Central said, that is a good example of the changing nature of these things. Will the threats to telecoms change? Yes, they will. Last night we discussed the National Security and Investment Bill, which addresses some of the same issues.

I tabled the amendment to focus on and consider the supply chain. There has been much concentration, quite rightly, on Huawei—not just the history, but the threats. As the Minister knows, I was a keen supporter of the Government’s initial response to Huawei. From a technical point of view, I think allowing 35% and making sure that Huawei was not in the core network was the right response. That all changed with the US sanctions on semiconductor exports to China, which changed the security advice. Again, I agree with that.

It will be interesting to see whether, if President Biden were to change that, we would change the security advice back. Frankly, I doubt that because of the direction of travel. I do not think there will be great change in the new Administration’s approach to China. It might be more nuanced and less belligerent, but I do not think it will fundamentally change. I know from sitting on the NATO Parliamentary Assembly and meeting fellow members from both sides of the House in the US Congress that there is a pretty unified bipartisan position on China.

The debate around Huawei has concentrated on the hardware. My amendment, which is a probing amendment, tries to see what coverage we will have in the telecoms network supply chain. There has been much talk about compromising the main components, but each of these networks are very complicated. We need only look at any electronic equipment used today, whether that is a telephone or a microwave oven, to see that they are very complex pieces of kit. The components are not all sourced here in this country—it would be impossible to do that—but are supplied from around the world. However, in terms of electronics, the major suppliers of a lot of these components are the Chinese, or Chinese companies that manufacture in different parts of south-east Asia, for example.

This is not just about how we get diversification in this sector, although trying to get some home-grown innovation is going to be important. To be honest, I think the opportunity is going to be in software and open RAN, because that is where we can get an advantage if we get our ducks in a row, not only through investment but through Government initiatives and other things. It is about trying to minimise the risk that will be there now that we are going to have two vendors. Now that Huawei is no longer in the network, we are going to have Ericsson and Nokia, both of which are going to be there for the foreseeable future. What will the regulator do to look at the supply chain around their components, for example? From the evidence we took from Dr Drew, it is quite clear that China is using not just these networks and the components that go into telecoms, but other things, including the belt and road initiative, for geopolitical purposes.

[Chi Onwurah]

I thank my right hon. Friend for giving way, and for the excellent points he is making. He mentioned the evidence we took in our session with Dr Drew. Is it not true that in those evidence sessions, we heard about the complexity of our networks and the extent to which network operators were not always aware of where their components were or, in this case, the level of components? Is it not the case that my right hon. Friend’s amendment will not only increase the visibility of the different components in the supply chain, but should help the Department and Ofcom understand where these components are, where they are going and the way they are changing through soft upgrades?

[Mr Jones]

I agree. The issue with both Ericsson and Nokia is that they will have Chinese components in their hardware. This is an incredibly complex situation, as my hon. Friend said: we are talking about not just one piece of kit that most of us have in our pockets, but hundreds of thousands of components, pieces of software and other things. What I am trying to put on the record, and what I want the Minister to respond to, is the question of how we get an understanding of any risks that are involved in that, and how the regulator and the Government are going to look at ways in which national security could be compromised, not by the main company being owned by a Chinese state entity, a Russian state entity or any actor that we feel is a threat to us, but by a key component.

I have not yet really understood how the regulator will look at that issue further down the supply chain, and whether it will ask a supplier of kit to the telecoms network, “What is the level of threshold or security that you need?” That is hard enough with hardware, but with open RAN and software—we are talking about bits of code—it is going to be incredibly difficult. One of the issues is around vulnerabilities, and various things have been said about the vulnerability that Huawei poses to our telecoms network. However, I suggest people read the Huawei assessment centre’s annual reports—I am rather sad, because I read such documents. One thing sticks out every single year, and it is not that the Chinese are doing anything nefarious. The reports are highly critical of Huawei for its shoddy workmanship and engineering, but that type of shoddy engineering and a lack of attention to security will lead to security concerns in our telecoms network.

Amendment 7 is designed to tease out from the Government their thinking about the supply chain. We do not want to be over-burdensome on it, because we want to get innovation in the supply chain. We do not want to suddenly give researchers and other people in the supply chain huge regulatory hurdles to jump over, because that would stifle the development that we are looking for. It is about how individual components and the overview of the supply chain will be regulated. I have tabled a later amendment about Ofcom, but again it comes back to the point I made yesterday about the National Security and Infrastructure Bill. What has to be at the heart of it all, every single time, is not to stifle innovation and prosperity, but what has to come first every time is national security.

As I say, amendment 7 is a probing amendment, and I want to understand where the Government are at in terms of the supply chain, the security they feel they need over the supply chain and, more importantly, the visibility of the supply chain.

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[Matt Warman]

I simply say that, as the right hon. Gentleman knows, the NCSC and others already work very closely with the networks. What he seems to be talking about, in some ways, is a very day-to-day way of talking about security concerns. That happens a lot already, and what the codes of practice and other documents will do is set up the framework by which that is formalised. As he knows, that process of very quick action being taken as soon as something is spotted, both by the networks themselves and by our agencies, is already well established, and the Bill gives considerably greater force to it.

As the right hon. Gentleman knows, the Bill is aimed at ensuring that providers take responsibility for the security of their networks and services in a way that has not happened, in legislative terms, in the past, and it then provides the Government with the powers that we need to enforce that. In so far as any supply chain components give rise to risks to the security of a network or service, new section 105A already requires providers to take appropriate action and proportionate measures to identify those risks. I appreciate that this is a probing amendment, but in a sense what the right hon. Gentleman is seeking to do through it is already there, and it will be enforced in the documents, such as the code of practice, that I have mentioned.

Furthermore, the addition of the presence of a supply chain component as a security compromise would not be consistent with the security framework’s definition of a security compromise, but I do not think that we need to get into too much detail about that in the context of a probing amendment. The concept of a security compromise is used in other provisions in the Bill, and it is important that we are consistent.

More fundamentally, the right hon. Gentleman’s amendment would put the onus on providers, rather than the Government, to determine a national security risk, but, as he implied, it is absolutely down to the NCSC and, ultimately, the Government and agencies to make that definition. Placing the responsibility for determining what does and does not constitute a threat to national security on the shoulders of all individual providers is not the right thing to do, and I think, to be fair, the right hon. Gentleman is not really suggesting that it is, either.

[Chi Onwurah]

I thank the Minister for the way in which he is addressing these important proposals. I think that his concern is that this amendment would put the responsibility on the providers rather than the National Cyber Security Centre, and I understand that, but can he say a little about the following matter, because it is the providers that know their networks? The National Cyber Security Centre is excellent, and we have huge admiration for it, but in terms of the supply chains, changes to the supply chain and new components evolving, how does he envisage that, day to day, working effectively without an amendment of this kind to put this requirement on the providers?

[Matt Warman]

As I have said, new section 105A partly provides the legal basis that the right hon. Gentleman seeks, but in practice no one is suggesting—the Secretary of State talked about this on the Floor of the House—that it is solely the name on the box of a piece of kit that defines international security status. We are not naive to the possibility of the supply chain being another vector of attack. That would be reflected in codes of practice and elsewhere around the legislation.

Public telecoms providers can and should consider the security of the resilience of their networks and services throughout the supply chain in a sensible and proportionate way. National security considerations are inevitably much broader than the issues that can be addressed solely by private companies. I think that is reflected in the distinction drawn up in this Bill.

The amendment would have implications for Ofcom’s monitoring and enforcement of providers’ compliance. The Bill includes provisions for Ofcom to collect information on behalf of the Secretary of State in narrow and specific areas related to national security, but this amendment would require Ofcom more actively to take some of the compliance judgments. In the evidence session the right hon. Gentleman was keen to see that it was not asked to make those judgments.

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[Matt Warman]

In so far as codes of practice will be published by Ofcom, the answer to the right hon. Gentleman’s question is yes. The more nuanced answer is that it is a co-production between Ofcom, the Government, NCSC and others.

To conclude, the Government are immensely sympathetic to the issues that the right hon. Gentleman and the hon. Lady seek to probe, but we take the view that this amendment would do something that is, ultimately, already covered in the Bill. I hope that, in that spirit, she will withdraw the amendment.

[Chi Onwurah]

I thank the Minister for his response. I am concerned that there is not greater clarity on the role of the supply chain components and the supply chain more generally. We will come to that in further amendments. Given where we are and how we got here, we must take a forward-looking approach to future risks and vectors for risks. This amendment is important in probing that, but I do not seek to put it to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Mr Jones]

I beg to move amendment 9, in clause 1, page 3, line 26, at end insert—

“(2A) The Secretary of State must provide the Intelligence and Security Committee of Parliament with a report on the specified measures.”

This amendment would ensure that the Intelligence and Security Committee of Parliament is provided with any information relating to specified security measures which the Secretary of State requires the provider of a public electronic communications network or a public electronic communications service to take.

We are now going to have a debate reiterating a speech I gave yesterday on the National Security and Investment Bill, because it covers the same issues. I will go into the details in a minute, but the amendment attempts to ensure parliamentary oversight of the way in which this Bill will operate. Such scrutiny traditionally comes from the Select Committee that mirrors the Department —the Select Committee on Digital, Culture, Media and Sport—but the decisions taken by the Government and the Secretary of State will be based on evidence that cannot be put into the public domain, because much of it is highly classified. In Parliament, only the Intelligence and Security Committee has the required STRAP clearance to see that evidence. It is important to ensure that the Executive is held to account for taking such decisions and for the public and Parliament to know that decisions have had parliamentary oversight from the ISC.

I do not want to give the impression that the ISC is looking for work, because I have been a member for a number of years and we are busy with a lot of inquiries—I have three to four hours’ reading every week looking through reports from the agencies. However, it is important that the ISC can at least look at the intelligence that lies behind decisions. The amendment does not propose that the ISC should have a veto or be a regulator, because that would not be correct. Decisions about high-risk vendors are for Ofcom and the Secretary of State.

We had the same debate yesterday on the National Security and Investment Bill, because the same issues come up there: decisions will be taken on national infrastructure, and the justification for them will be based on highly classified secret intelligence to which the Business, Energy and Industrial Strategy Committee will not have access. People might say, “Isn’t this the ISC getting involved in the day-to-day work of the BEIS Committee?” No, it is not. The ISC already has such a responsibility for Defence Intelligence and the National Cyber Force—military cyber-security—and we stick just to that; we do not go into wider Defence policy issues. Likewise, we scrutinise MI6, whose home Department is the Foreign, Commonwealth and Development Office. Again, we do not get into general foreign policy issues, which are rightly for the Foreign Affairs Committee. I do not think there is an easy way for the Government to provide for parliamentary scrutiny at the moment, but I want to go through and explain one.

I have some sympathy with the Minister, just like I had some sympathy with the Secretary of State for Business, Energy and Industrial Strategy yesterday on the National Security and Investment Bill. I know exactly where the problem is, and it is not in the Minister’s Department or in BEIS: it is in the Cabinet Office, which seems to have an issue with the ISC and jealously guards anything that we ask for, ensuring we get only some information even though we are legally entitled to it under the Justice and Security Act 2013. There is usually a tug of war, and on every occasion I have seen it the ISC has won—it is legally allowed the information—but that does not stop the civil servants. I must say that this is not Ministers’ fault; it is the culture in the civil service.

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[Mr Jones]

No, I do not. I know the hon. Gentleman is a new Member, and I actually quite like him, but what is he arguing for? A dictatorship? That the Executive should decide everything? Knowing you, Mr Hollobone, you would take a very dim view of that. You have form on holding the Executive to account—all Governments.

The ISC is there to look at information and provide parliamentary scrutiny. As for the nature of the information we receive, we have all the clearances from top secret going up to STRAP, including STRAP 3, which is intelligence that has a limited circulation and people have to be added to the list. We have access to that as well, which allows us to consider that information.

Our annual reports, which we supply to Parliament, can be debated by Parliament. We can produce reports. For example, most recently, there was the Russia report, which highlighted what the Government had not done rather than what it should have been doing. The contention from the Cabinet Office is that if information goes to the ISC, it is in the public domain. That is a little bit insulting. We do public reports, which have information that can be put into the public domain, but there are always secret annexes that go to the Prime Minister and are not made public, which allow us to question decisions and highlight issues that we think the Prime Minister should take notice of. It is a valuable mechanism for scrutiny.

The argument that will come from the Cabinet Office is that DCMS is not covered. It is. The memorandum of understanding says:

“The ISC is the only committee of Parliament that has regular access to protectively marked information that is sensitive for national security reasons: this means that only the ISC is in a position to scrutinise effectively the work of the Agencies and of those parts of”

the Government

“whose work is directly concerned with intelligence and security matters.”

I accept that DCMS’s day-to-day work is not covered in the description of national security, whether or not this is an issue of concern to individuals. I think it is. There could be an argument as to why the Department for Digital, Culture, Media and Sport got this legislation and whether it should perhaps be put in another Department. I do not agree with that, because I think the general issue of telecoms fits well into the Department’s wider briefs.

Increasingly, a number of Departments are getting involved in, or taking responsibility for, areas that involve national security. BEIS and the National Security and Investment Bill is a good example.

[Chi Onwurah]

My right hon. Friend is far too modest to set out his vast experience with and long-standing membership of the Intelligence and Security Committee. Does he agree that the geopolitical and technological shifts in the last decade in particular—perhaps the last two decades—have meant that the threats to our security come from a broader range and, more specifically in a more technologically-based range, and we have seen our defence requirements move to cyber-security? Therefore, as he said, the increased need of Departments to consider security issues means that the Intelligence and Security Committee’s ability to review items that require security clearance is important. Does he understand why the Government will not allow the Committee to do that?

[Mr Jones]

My hon. Friend knows that modesty is one of my trademarks, but no, I do not—I do not understand it, nor do I understand where the Government are coming from. I do not think that the problem is with the Minister or his Secretary of State; I think it is the culture of the Cabinet Office, trying somehow to test the Justice and Security Act to destruction. Its argument, basically, is that DCMS is not on the list of organisations, but the Act and the memorandum of understanding are clear: we have jurisdiction over matters that relate to national security, which this clearly does.

--- Later in debate ---

If the Minister will not accept the amendment in Committee, I urge him to table his own on Report. There are two ways of doing this: either he puts it in the Bill or he gets the Prime Minister and the Government, across the piece, to amend the explanatory memorandum to give responsibility, which would have the same effect as the amendment. I plead with him to act. This issue will not go away.

[Chi Onwurah]

I will not detain the Committee long, given that my right hon. Friend the Member for North Durham made such excellent points. I will add one point of consideration, which again, his modesty may have forbidden him from making.

The amendment goes to the heart of our concerns about the scrutiny of the provisions in the Bill. I say again for the record that we support the wide-ranging powers that the Bill gives the Secretary of State, but those powers must come with appropriate scrutiny, not because scrutiny is a “nice to have” or, as my right hon. Friend said, because the ISC needs further work, but because scrutiny of the provisions is essential to the good working of the legislation in practice.

Considering specifically the impact of the requirement to remove Huawei at this stage in our 5G roll-out—the economic impact, the cost to the providers and the cost to our economy—we recognise that it is the right thing to do, but we must also recognise the cost of doing it. Back in 2013, the ISC was one of the first parliamentary organisations to raise the issues around Huawei. I truly urge the Minister to accept this constructive amendment to support the appropriate provision of scrutiny.

My other point is more about the working of the clause, which gives the Secretary of State the power to make regulations that require providers to take specified security measures. As we know, the telecoms security framework and telecoms security requirement, to which all providers must adhere, will be set out in delegated legislation. In his response, will the Minister give us some idea of why the Secretary of State might need to set out additional specified requirements that are not in the draft of the TSR that he has published? Is the intention of the clause to enable him to set out additional specified requirements, or is it to enable him to highlight particular specified requirements that he does not think the providers are meeting quickly enough? In either case, does that not suggest that there are particular security concerns, either about providers or about the circumstances, that require these specific security measures? To come back to my first point, does that not highlight for those concerns to receive parliamentary scrutiny, with the appropriate clearance, which is to say that of the Intelligence and Security Committee?

[Matt Warman]

I start by acknowledging the incredibly important work that the ISC does. Its role in overseeing the work of the UK intelligence community is vital to maintaining public trust, as the right hon. Member for North Durham described, and its members make important contributions to public debates on national security matters of all kinds. The right hon. Gentleman has done that for a number of years. Because he is a member of the ISC, he will know that I have proactively engaged with it on the substance of the Bill. I did so enthusiastically—if any Minister can ever regard a Select Committee appearance enthusiastically—and in recognition of the interest that I knew that Committee would have in the Bill. I will be writing again to the ISC on a number of matters raised in the Bill, and I have instructed officials from my Department to continue to engage with the ISC as the Bill proceeds through Parliament, building on the work that it has already done and on the transparency that we have already demonstrated by publishing the draft of the security framework regulations on 13 January, copies of which have been provided to the members of the ISC and a number of other interested Committees. I hope that all that demonstrates the Department’s commitment to working constructively with the ISC, despite the fact that, as the right hon. Gentleman said, DDCMS does not normally fall within the ISC’s formal remit.

It is none the less important to acknowledge that the ISC is not the only legitimate avenue to scrutinise this framework. We fully intend to make use of all the appropriate parliamentary procedures.

The regulations and the explanatory memorandum accompanying them will all be there for the ISC to scrutinise. There is also further guidance to providers in connection with the measures specified in the regulations that can be provided in the code of practice, which must be published, with a copy laid before Parliament. Also, beyond the usual arrangements for secondary legislation, new section 105Z of the Communications Act 2003 provides for Ofcom to produce security reports. Clause 11 of the Bill enables those reports to be published by the Secretary of State, and clause 13 provides for a review of the effectiveness of the framework, including any regulations, after five years.

It is in that context that I point to the enthusiasm with which we have engaged with the ISC. We will continue to do so and ultimately—this is perhaps the reason why the right hon. Gentleman described this process as an ongoing campaign, rather than something that we should address piecemeal—the ISC is clearly defined in the Justice and Security Act 2013. I do not think it would be right to address the memorandum of understanding that he referred during our consideration of the Bill. We should not go at it in piecemeal fashion. The role of the ISC as set out in that MOU is to oversee the work of the security agencies, to provide oversight of certain intelligence or security matters within Government. Ultimately, if the right hon. Gentleman wants to change the MOU, that is a broader issue for him to take up. I note that he is not the only Member of this House to have made that point, but it is not my place to take a view on the role of the ISC; that should be for the ISC itself.

I am confident that we will continue to engage with the ISC; I personally will certainly do so. I know that the DCMS Committee will continue to take an interest, and I will simply say that we will co-operate as fully as possible. I will set out more in the letter I mentioned, and I look forward to the future salvos in the right hon. Gentleman’s campaign.

[Mr Jones]

I make no criticism of the Minister, because he has been very proactive, as has his Secretary of State. The problem is this: we have two pieces of legislation going through Parliament. We do not have security Bills very often in this place, and now we have two in a very short period of time. Both make eminent sense and I support them, but this is not something that comes up regularly.

In terms of the Minister’s co-operation, I have no complaints about the way he has operated, but he is not going to be there forever and neither is his Secretary of State, so we need to put in place something that will weather the passage of time, and create an arrangement whereby it will be seen that Parliament is scrutinising these measures. I do not know why the Government—I am sure it is not the Minister, or even his Secretary of State—are resisting this. Frankly, I am not really bothered whether it goes on the face of the Bill or in the MOU, but the Justice and Security Act 2013 is very clear that as a Committee, the ISC has the ability to look at this.

I accept that it would be wrong to get into issues around this Bill that are quite rightly, as the Minister said, for the relevant Select Committee—the Committee on Digital, Culture, Media and Sport—to deal with. We would never do that, so I will withdraw this probing amendment, but we will come back to this issue. I am not usually a betting man, but I suspect that by the time this Bill and the other Bill go through, we will have got to where both I and the Minister—I think, privately—think we should be. I therefore ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Chi Onwurah]

I beg to move amendment 21, in clause 1, page 3, line 26, at end insert—

“(2A) The Secretary of State must make regulations under subsection (1) requiring providers of public electronic communications networks and public electronic communications services to carry out an audit of the goods, services and facilities supplied, provided or made available for the purposes of the provision of their network or service to ascertain whether they present a risk to the security of that network or service.”

This amendment is a probing amendment designed to learn how the Government plans to ensure network operators have a comprehensive audit of hardware of interest because, for example, it is manufactured by a designated or high-risk vendor.

The amendment goes to the heart of two of our key themes: the scrutiny of the powers in the Bill and the effectiveness of the accompanying diversification strategy. It is a probing amendment, designed to enable us to understand—or to have the Minister clarify—plans to ensure that network operators carry out a comprehensive audit of hardware that is relevant to the Bill because, for example, it is manufactured by a designated or high-risk vendor.

We tabled the amendment for a number of reasons. The first is the Government’s decision, which we welcome, to strip Huawei out of our telecommunications networks. There are questions about where that equipment is located, the level of software provision, and in particular the exact nature of the revision of the equipment within the network. In addition, the Government have not provided a plan for locating and removing Huawei from our networks; instead, they have opted to leave it entirely to private sector providers.

That might seem appropriate, but as someone with 20 years’ experience in the telecoms sector, I have to say that it is generally not the case—I am not insulting any individual provider—that providers know exactly where every bit of equipment is located and what level of software or build is associated with the equipment.

--- Later in debate ---

[Chi Onwurah]

I am slightly confused, to be honest, because there was a contradiction there. It is a basic, inherent requirement under the Bill to understand the security implications of a network—the security implications, the security threat and future compromises. It goes to the amendment tabled by my right hon. Friend the Member for North Durham. Given that different components might provide different threats, it is essential to understand the kit that is in the equipment in order to meet the requirements of the security framework. So no, I do not think it is draconian that there should be an audit of the equipment. Indeed, providers should have this information already, but I know from my own experience and the experience of those who gave evidence, which I will come to in a moment, that this is not always the case because networks are so complex, and because our networks today have built up over decades and decades. There is software running in some of our networks that has been around for 40 or 50 years, as well as copper lines that have been around for even longer. So it is not always the case that this information is known.

[Christian Matheson]

Does my hon. Friend agree with me that having the carrot of an audit might help firms to avoid the stick of a draconian fine that the hon. Member for Bracknell referred to?

[Chi Onwurah]

As always, my hon. Friend makes an excellent point. Indeed, the audit, which I agree is burdensome if the information is not already in the management systems, which it should be, would, I hope, be less burdensome than the potential fines for not meeting the basic requirements of knowing what is in the network and where it is. Also, that challenge has been made more complex by the subcontracting of different parts of the telecoms networks.

For example, network providers such as Vodafone or Three have primary vendors—currently Ericsson or Nokia—but there might be subcontractors who provide particular elements of the network and particular management elements. We hope that that will be increasingly the case as we seek to open up the supply chains and make them more diverse. A basic and critical requirement for the Bill to be effective is to have a more diversified supply chain. More suppliers go hand in hand with a diversified supply chain, and therefore different types of equipment, of which we will need to keep track.

[Mr Jones]

The hon. Member for Bracknell has argued that regulations are somehow burdensome on business and unnecessary. It is only when things go wrong that we look back and think, “Wait a minute. That regulation or audit, which was suggested in an amendment, was vitally important.” We must get the context right. These amendments are being tabled not for their own sake but to ensure that security is improved.

[Chi Onwurah]

My right hon. Friend makes an excellent point. As someone who worked for a regulator for six years, I might be expected to agree with my right hon. Friend on the point of regulation; in this context, regulation should not be seen as a burden. As my hon. Friend the Member for City of Chester set out, it should be seen as a carrot—an incentive—to get things right. Imagine we had known and been able to see how Huawei’s presence in BT’s network, over the last 15 years or so, would rise from small beginnings to becoming the principal vendor. That might have rung more alarm bells and been an incentive to have transparency.

Regulation is also about levelling the playing field and enabling more effective competition. The better providers will do that, but some providers may not. We want a level playing field, particularly because the 2019 UK Telecoms Supply Chain Review said that there was not an incentive for security in mobile networks. It concluded specifically that there was no incentive for security in mobile networks. Given that conclusion and some of the points provided in the evidence sessions, the Bill does not address incentives to ensure security by design in our mobile networks. It has burdens and fines for not doing that, but it does not have positive incentives.

[Christian Matheson]

Was not that exactly the problem with Huawei, which has undercut and undermined so much of the telecoms sector elsewhere, either on price or on shoddy workmanship, as my right hon. Friend the Member for North Durham said? This amendment addresses that issue. By raising standards, we help existing and future contributors to the sector to come in and address the problem that Huawei caused.

[Chi Onwurah]

Again, my hon. Friend makes an excellent point with regard to the way in which Huawei grew in the telecoms sector. I do not want to detain the Committee on that history, but Huawei grew by under-cutting existing vendors, building up scale and making its profits by locking in network providers, despite issues with the quality of the equipment, which, as we have discussed, our security services identified.

Having visibility of network equipment, as well as the level of concentration of any one provider, will enable us, in part, not to get into such a situation of dependency in future. Again, I would emphasise that this is about incentivising what should happen but is unfortunately not always the case. That is not simply my view or that of the Labour party; it is the view of witnesses who participated in our evidence sessions. For example, Andrea Donà said:

“It is vital that the secondary legislation that accompanies the Bill clarifies assets in the telecoms network architecture that will be in scope of the security requirement, so that we can work knowing what we have audited, and knowing that the auditors always shared with NCSC. We need a clear understanding between Ofcom and us as providers before the legislation is enforced, so that we understand exactly the boundaries and the scope, and we all work together, having done the audits, to close any vulnerabilities that we might have.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 13-14, Q10.]

Dr Bennett said:

“I would hope that those at the top level are clear about it, but I would be surprised if there were not occasions when they had used subcontractors to do maintenance and the imperative had been to sort out the fault ASAP. Knowing precisely what components had gone in could be wrong, and that might come up in an audit. I think it becomes more important as you flow down the levels.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 49, Q62.]

Dr Bennett later said:

“I have said that audit is needed of the assets in the network. The costs of being audited and of dealing with audits are very high, and they are costs that small companies may not have the resources to meet.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 52, Q67.]

Ofcom said that it was more or less impossible to meet the requirements set out in the codes of practice for the operators, unless it had a detailed asset register of everything in its system. We will expect to see evidence of that, and we expect that it will be regularly checked, audited and so on. We recognise the potential costs of an audit, particularly for smaller providers, although most of them have newer networks and equipment and should have a lot of this information already available. Ofcom is anticipating that this is something it would need to have access to, yet there is no requirement in the Bill or, as far as I can see, in the delegated legislation that has been published to make that requirement.

I have mentioned that this is a probing amendment. I am not sure that it is necessary to have it on the face of the Bill, and it might be that it will be provided for in delegated legislation, but we need a clear and strong strategy for the detection and removal of high-risk components, vendor hardware and software. Otherwise, the Bill will not protect our national security effectively. I hope the Minister will give clarification on that.

[Mr Jones]

rose—

Telecommunications (Security) Bill (Sixth sitting)

Chi Onwurah Excerpts

Committee stage & Committee Debate: 6th sitting: House of Commons
Thursday 21st January 2021 Public Bill Committees

[Mr Kevan Jones (North Durham) (Lab)]

I am demasked. Welcome to the Chair, Mr McCabe. It is a pleasure to serve under your chairmanship. The amendment’s intention is similar to that of new clause 7, which we spoke about earlier. My hon. Friend the Member for Newcastle upon Tyne Central is trying to probe, like I was, how we get operators to ensure that there is a full audit of their telecoms networks. This is not an easy situation. I accept what the Minister said about trying to strike a balance between prosperity—not wanting to put undue burdens on operators—and ensuring security. As my hon. Friend said, with her huge expertise in the field, these networks are not static entities; they develop over time. The example that she cited was that some of the kit in networks is many years old, which may now create security issues that were not evident when the equipment was introduced.

We are not talking about too onerous a burden on the network operators, because they are large companies. I accept that they will be resistant to anything that adds cost because, at our insistence of wanting cheaper phone calls and mobile technology, prices are competitive between the various operators. My hon. Friend therefore makes a good point that there must be a clear level playing field between the operators.

The Bill will ensure that existing Huawei kit is taken out by 2027, even though the networks did nothing wrong by putting in that kit in the first place. Without wanting to carry on my campaign against the Cabinet Office, the Intelligence and Security Committee’s 2013 report “Foreign involvement in the Critical National Infrastructure” shows that the Cabinet Office was made aware of BT’s contract with the Chinese company Huawei in 2003. That the Cabinet Office felt it was not important enough to tell Ministers so until 2006 reinforces my point about its role. That brings me to Ofcom and its capacity, which I will come to later. If we want the most robust system, we will need a system by which we know what is in the network.

There are two issues. I think it is possibly easier for future deployments, because we know what we are putting in. In the debate around Huawei and the security risks, I think it has been very clear. Let us be honest: an operator would be very silly to put in a piece of equipment that was deemed to be high risk for any future roll-out. However, as my hon. Friend says, it is what is already in the network. We accept that some of that will be taken out as a result of the Huawei issue, but a huge amount of equipment will still be in there.

That is before we look at software. What saddens me about the entire debate around Huawei and the telecoms sector is that it has been very hardware-centric. We know that the risks to our network from software are greater in some respects; we have seen examples of where network compromise is easier, too. Again, how do we get a robust framework in terms of the audit around software—not just what has already been used, but what will be used in the future?

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

My right hon. Friend is making some excellent comments. He has raised another issue, which I perhaps did not highlight in my speech, which is that there might be existing equipment that is not necessarily seen as having a security implication but that, as the network evolves, will pose a security threat in the future. I gave an example in the evidence sessions. Say Amazon Web Services was to be bought by a Chinese company. As our networks move the functionality into the software, that will be running in the cloud over the Amazon Web Services infrastructure, which would have a huge potential security impact. An effective audit of where that equipment is now would be critical to knowing the level of that threat.

[Mr Jones]

I do not disagree with my hon. Friend. That is why we need to get into the idea of the audit. As I said earlier, we basically need a level playing field for operators; we do not want one to have an advantage over another. We also need a clear picture of what we are asking in terms of the audit. On the point she makes regarding web services and the cloud, there is an issue there that I think is worth referring to. It links today’s Bill with the National Security and Investment Bill, which we were discussing yesterday. There was a lot of discussion around what we define as critical—a point she has already raised.

For yesterday’s Bill, the question was what is critical to national infrastructure—for example, a company that is developing software that is then acquired by a state that we deem is a security risk to us. If that equipment or software is being used in our telecommunications network, does that mean that the network is compromised, and how do we guard against that? There are provisions in the National Security and Investment Bill that enable the Government to stop the acquisition of companies that we consider vital to our national security, but unless we know that in advance, how will we make that decision?

If we have a situation where a small company is providing software for part of our critical national infrastructure for telecoms, how will that be joined up? How will we be able to use the provisions in the National Security and Investment Bill, so that the Business Secretary can block the sale? Likewise, how do we get that connection? We can do that only by the Minister and Ofcom having a very clear indication from day one—I do not think it will be possible from day one, but from some time into it—what is in our network, not just now, but into the future. That will be important.

That brings us to the role of Ofcom. We have seen a development of regulators in this country. I am not a great fan of regulators, because I think it is a way for Ministers to palm off their responsibilities to third parties and then stand back and saying, “If it all goes wrong, it is nothing to do with me, guv—it is these independent organisations.” A long time ago—perhaps it is a bit old-fashioned—the General Post Office used to be responsible for this type of thing, and I am currently reading the excellent new history of GCHQ that has come out, which I recommend to everyone. It is fascinating to read about some of the challenges—things that apply to this Bill—such as, in the first world war, what was conceived as national security and who was responsible for it. Was it the GPO, the military or someone else?

How will Ofcom be able to look at a network and say, “Yes, we are satisfied that there is nothing in there that is a matter of national security”? They do not know. I do not think for one minute that we are going to have a situation whereby this Government or any future Government will suddenly throw so much money at Ofcom that a huge army of inspectors will be climbing up poles and going into operators’ offices to check source codes and so on. That is not going to happen.

From a practical point of view, the operators will have to be responsible for providing that information to Ofcom. Whether it is in the Bill or in the guidance, it must be clear what is expected of operators. It is no good looking back in hindsight and saying, “We should have done that,” when something happens. The operators will just say, “You did not tell us we had to do that,” or, “We didn’t know about that.” It has to be very clear, to prevent a competitive advantage between different companies, that there is one standard. They also have to know what we are asking for. Then, taking the telecoms hat off and putting the national security hat on, from the Government’s point of view, that needs to be very clear as well, because we need to be reassured that the components and software in those networks, now and in the future, are not a national security risk.

That brings us to an issue that I have already raised. I am not someone who thinks that every time we go to bed at night, we should look under the bed to see whether the Chinese are there, unlike some members of the China Research Group, but there is an issue about the way in which China will look at supply chains as a way of getting access, for two reasons. The first is national security. The second is commercial reasons—dominating the market, which is what China has done with Huawei. How will we identify that, without having some type of audit process? I do not think that everything to do with China is bad, but a huge number of the components in all our mobile phones in our pockets today will have come from China, including Ericsson and Nokia hardware.

--- Later in debate ---

[Mr Jones]

This is a remarkable day. This morning I was told that my contribution to the debate was inspiring, and now I am being told that I am talking sense—I thank the hon. Gentleman for making my day.

The hon. Gentleman is right, but he is also wrong. He is right in the sense that there are threats that will come through GCHQ and others—they will say to operators, “You’ve got to be careful of these things.” Where he is wrong, though, is with the idea that somehow GCHQ can take a guess at what is in the network. It does not have that capability. Going forward—the emphasis in this country, in the Bill, in terms of looking at telecoms security—yes, the bar has been raised substantially.

There will be occasions when GCHQ—it does it already —contacts operators and others to say, “Beware of this software or this thing.” I accept that as a proactive approach, but handling backwards will also be important. How do we have a gold-plated system, whereby we have GCHQ doing what the hon. Member for Bracknell suggested they are already doing, but one that also matches up with operators taking responsibility to say, “We have spotted something and are doing something about it”? It is pulling the two things together.

[Chi Onwurah]

Part of the challenge is that the operators do not know themselves and, as we have discussed, there are no incentives for them to find out. To give an example, Virgin Media took over from NTL, which I think took over from the 13 different cable providers in the franchises of the ’80s, and the BT mobile network was bought partially from EE—so there are takeovers and acquisitions, and partners may not know, and do not necessarily have an incentive to find out unless we put in a requirement.

[Mr Jones]

My hon. Friend makes the point precisely: the way in which telecoms have developed in this country has been piecemeal, only developing now into the four main operators. I hope we will try to get others into the market.

We are to blame for that, as consumers, because we have demanded ever lower prices for our mobile services. Does that suggest that the operators have taken shortcuts? No, I am not suggesting that, but consumer preferences have driven down price, and therefore the costs of what those operators provide in delivering the services that we all take for granted. Let us be honest: the Chinese saw the opening door for Huawei—that is why they bought into and flooded the market, putting Government loans behind it. Can we blame the operators for saying, “Well, actually, this is a good deal—we can get good deals”? But they cannot.

I am interested to know from the Minister how, looking forward, we are going to do that. I accept that something will be done under the regulations that the Government will put out, but how will we look backwards as well? As my hon. Friend the Member for Newcastle upon Tyne Central said, there is a lot of legacy equipment there, and it is important for Ofcom to have a clear understanding of what is in the networks.

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Matt Warman)]

It is a pleasure to serve under your chairmanship, Mr McCabe.

We are redefining UK telecoms security, but I worry that we are also redefining the aspiration of the hon. Member for Newcastle upon Tyne Central to crack on, so I will try to be brief. The good news that I can deliver, briefly, is how the aspirations of both the hon. Lady and the right hon. Member for North Durham are met in the legislation, and how we envisage those aspirations’ being implemented.As the Committee is aware, the Government have published an early draft of the security regulations. Certain draft requirements are relevant to the aims that we have talked about today. If hon. Members look at regulation 3(3)(a), with which they will be familiar if they are insomniacs, they will see a duty for network providers

“to identify, record and reduce the risks of security compromises to which the entire network and each particular function… of the network may be exposed”.

That is already there and key to the issues that hon. Members have been talking about.

[Chi Onwurah]

I had looked at those requirements. I appreciate that they are drafts, but they talk about identifying issues. They do not say “audit”.

[Matt Warman]

I think this would be impossible to identify without carrying out some kind of audit. There is a danger of a semantic argument, but I understand the point the hon. Lady is making. We want people to be in the position to make the kind of identifications that we are requiring. I do not see how they could do that without the records to which she refers, in terms of both the existing kit and future kit that they might put into their network.

[Matt Warman]

The regulation that I cited is an example of the Government not relying on assumptions. It is an example of us publishing, in advance, exactly the sort of material that demonstrates that this is not assumptions, and that it is there in black and white. That is an important distinction and it demonstrates the cross-party consensus that we have had thus far. We continue to be on the same page in terms of the level of detail required.

The evidence sessions with industry demonstrated that national providers already maintain some asset registers. Witnesses were clear that those registers are maintained and updated as technologies are updated. That is an important part of the existing landscape, but our regulations will ensure this kind of best practice is extended across public telecoms providers.

In addition, the Bill contains measures with regard to the use of particular vendors’ equipment. Inspection notices under clause 19 enable Ofcom to carry out surveys of a specific network or service where Ofcom receives a monitoring direction from the Secretary of State to gather information on a provider’s compliance with a designated vendor direction. Alongside that, clause 23 enables the Secretary of State to require the provision of information about the use of goods, services or facilities supplied, provided or made available by a particular person. That could be used to require information about a provider’s use of a particular vendor’s equipment.

Taken together, the issues that have been raised are not only entirely legitimate, in the view of the Government, but are addressed in black and white already, both in the Bill itself and in the drafts that we have published. We are ensuring that “hardware of interest,” whatever that might be, is subject to proper oversight and monitoring. That objective does not need the approach that might come as a consequence of this amendment, because it is already there. For that reason, I welcome the probing nature of the amendment. I hope that my answer has satisfied some of the concerns, and I look forward to doing so further in future answers.

[Chi Onwurah]

It is a pleasure to serve under your chairmanship, Mr McCabe, and I thank the Minister for his comments. I also thank my right hon. Friend the Member for North Durham and my hon. Friend the Member for City of Chester for their comments. This amendment is probing, so we will not push it to a Division. I would like to say two things to the Minister. Although it is true that the providers were confident that they had an asset anywhere their equipment was, other experts who gave testimony in the evidence sessions were not. My experience of networks is that there are multiple systems and this information is not easily accessible or searchable.

I am reassured by the Minister saying that his view is that these requirements could not be met without there having been some kind of audit, to have that information ready. I ask him to write to me, if possible, stating which provisions in the requirements set that out. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Matt Warman]

It is good to reach this landmark point. I do not propose to go over all the ground we have covered, because we have already covered a large chunk of this in discussing the amendments.

As I mentioned, proposed new section 105A means that telecoms providers will need to take appropriate action to ensure adequate security standards and limit the damage caused by any breaches. To support that duty, the proposed new section will create a new definition of “security compromise”. The definition is purposely broad. It includes anything that compromises the availability, performance or functionality of a network or service, or that compromises the confidentiality of the signals conveyed by it. That addresses some of the points made by the right hon. Member for North Durham a moment ago. This is a comprehensive approach that will help to ensure providers protect their networks and services properly in the future.

Earlier, I mentioned law enforcement and national security. This part of the Bill excludes certain conduct that is required or authorised under national security legislation or for law enforcement from the definition of “security compromise” in subsections (3) and (4). Those subsections also clarify the fact that, for example, disruption of the use of unauthorised mobile phones in prisons would not be a security compromise.

Proposed new section 105B will give powers to the Secretary of State to make regulations imposing duties to take specific security measures. The power will enable more detailed requirements to be imposed on providers, further to the overarching duty set out in proposed new section 105A(1). This will give greater clarity to providers about the measures that they must take. It will also allow the legal framework to be adapted as new threats arise and technology changes.

These security requirements deliver on our commitment in the telecoms supply chain review to place targeted, actionable and proportionate requirements on a statutory footing. Taken together, the new overarching security duty and requirements will, in secondary legislation, make clear what the Government expect of public telecoms providers. The provisions in the clause are crucial for improving the security of our telecoms infrastructure.

[Chi Onwurah]

As the Minister says, reaching the end of consideration of clause 1 is a landmark. We are cracking on at a slower pace than anticipated, but it is important that we have rehearsed a number of the arguments that you will hear, Mr McCabe, throughout our detailed scrutiny of the Bill.

Those arguments relate to our concerns with regard to national security, which Labour prioritises, yet we do not see that priority recognised consistently in the Bill; the effective plan to diversify supply chains on which it depends, but which it does not mention; and the scrutiny of the sweeping powers that the Bill will give to the Secretary of State and Ofcom. Those issues all arise in the clause, although we welcome the Bill and the increased duties. Will the Minister clarify the relationship between proposed new section 105A and proposed new section 105B? If he cannot do so now, perhaps he will write to me.

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[Matt Warman]

We are one thirtieth of the way there. The clause will place a duty on providers to take measures in response to security compromises through proposed new section 105C. When managing security, providers should seek to reduce the risk of security compromises occurring under their duty in proposed new section 105A. As security threats and attacks evolve, it will never be possible for providers to reduce that risk to zero. Therefore, should a security compromise occur, it is crucial that providers take swift and effective action to mitigate its effects. Taking action quickly will also help to mitigate the risk of any further incidents.

Mirroring the approach taken in clause 1, the new duty in proposed new section 105C is overarching and sets out a general duty on providers. It is supported by proposed new section 105D, which will provide the Secretary of State with powers to make regulations requiring providers to take specific measures in response to security compromises of a description specified in regulations. Although it will clearly not be possible to anticipate every security compromise that might occur and to set out how providers should respond, this will enable more detailed provision to be made in appropriate cases. Measures can be specified in the regulations only where the Secretary of State considers those measures appropriate and proportionate.

In practice, the first set of requirements will be contained in a single set of regulations made under the powers of proposed new sections 105B and 105D. A draft of the regulations has already been made available to members of the Committee, and published on gov.uk. Regulations made using this power will give providers clarity about the measures that they need to take, and having those measures set out in secondary legislation has the benefit of allowing the regulations to be reviewed as technology and security threats change over time.

In summary, this duty on providers is an integral part of the new framework, which will ensure providers take control of the security of their networks and services at a time when the UK stands on the cusp of a 5G and full fibre revolution. We must keep those technologies secure to enjoy their full benefit, and the clause is essential to doing that.

[Chi Onwurah]

We are cracking on: clause 2 is taking but a few minutes. The Opposition recognise the critical importance of our network providers taking responsibility for the security of their networks, and that there can never be a zero-risk network. Given that network communications are ever present in almost every aspect of our life and of our nation’s economy and security, it is right and appropriate that the Bill should put requirements in place, both on the operators and in response to specific security compromises.

I should like to have better understood how we would expect network operators to respond to a compromise such as the SolarWinds one, for example, but I expect that the clause will at least place the right duties on network operators, and I am content that it should stand part of the Bill.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

[The Chair]

This must be down to that productivity seminar they sent me on. Still, nothing lasts forever.

Clause 3

Codes of practice about security measures etc

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[Chi Onwurah]

I rise to support my right hon. Friend’s excellent comments and to add a couple of points on amendment 10, which would require the Secretary of State to consult the National Cyber Security Centre before issuing a code of practice about security matters. My right hon. Friend spoke ably about the amendment’s intent to ensure security input on national security measures. That sounds basic, so I hope the Minister will explain why he feels it is unnecessary to make that explicit in the Bill. My right hon. Friend suggested that perhaps it should go without saying, but as we heard in the evidence sessions and have already discussed, the evolving security landscape and the change that the Bill represents, through the new powers for the Secretary of State and Ofcom, make it particularly important to set that out expressly.

The Bill looks at many issues to ensure the security of our networks from supply chains to requirements on network providers as well as raising technical issues, and Ofcom will need to do a lot specifically, so it is important to have a specific reference to the security function of the National Cyber Security Centre.

It came across clearly in the evidence sessions that Ofcom will not be making national security judgments. Lindsey Fussell said:

“It is important to say that, across the scope of the whole Bill, it is not Ofcom’s role to make national security judgments. That is really important. Clearly, that is the Government’s and the Secretary of State’s role, taking advice from the NCSC and the intelligence agencies.”—[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 89, Q113.]

In introducing the code of practice, it is essential to ensure that security input and expertise. I do not see why the Minister would object to including such a requirement in the Bill. Unfortunately, we are not always as joined up as we would like to be. There are numerous examples of issues that could have been prevented, had agencies of Government done what might have been expected of them and talked to teach other. As the Bill involves network operations and deep technical and security issues, a requirement to consult the NCSC is particularly important, and that is what the amendment would achieve.

[Matt Warman]

I apologise in advance, having said that we should crack on, for detaining the Committee for a few minutes on this group of amendments. They relate to clauses 3 and 4, which deal with the codes of practice for security measures and informing others of security compromises. Ultimately, the new telecoms framework comprises three layers. There are strengthened overarching security duties set out in the Bill, there are specific security requirements in secondary legislation, and there are detailed technical security measures in codes of practice. Clause 3 deals with the final layer of the new security framework. Specifically, it provides the Secretary of State with the power to issue and revise the codes of practice and sets out the legal effects of any published codes of practice.

Clause 4 addresses what would happen should there be a security compromise. It puts in place a process for users to be informed of significant risks of a security compromise. The clause also places a duty on public telecoms providers to inform Ofcom of any security compromises with significant impacts, and it creates the power for Ofcom to inform other persons in turn, including users.

I turn now to amendment 5, which seeks to ensure that the NCSC is also informed of security compromises. From a drafting point of view, the NCSC is part of GCHQ, and I take the amendment to refer to GCHQ in that sense. Within the new telecoms framework, the Department for Digital, Culture, Media, and Sport will set the policy direction, Ofcom will regulate and the NCSC will provide technical and security advice. As the UK is an world-leading national authority on cyber-security, we expect the NSCS to share its expertise with Ofcom in order to support the implementation of a new telecoms security framework.

For that reason, the Government absolutely agree that it is crucial that the NCSC receives information about telecoms providers’ security. That is why such information-sharing provisions already exist. Under section 19 of the Counter-Terrorism Act 2008, Ofcom or the Secretary of State is able to share with the NCSC any information that would support the NCSC in carrying out its functions. That would of course include the passing on of details of security incidents. Under new section 105L of the Communications Act 2003, which this Bill inserts, Ofcom must report all serious security incidents to the Secretary and State and can pass on information about less serious incidents as well. On receiving such information, the Secretary of State can then share the information with the NCSC, as I have set out. Although these probing amendments are well-intentioned, it is obvious that the provisions are already there.

[Chi Onwurah]

I thank the Minister for his response to the amendments. He is focusing on the fact that it is possible for information to be shared, but it is not required. I understand that the Bill as drafted, and preceding best practice, means that it is possible for information to be shared. My concern is that it is not required.

[Matt Warman]

I understand the hon. Lady’s point, and I will come to something that I think will address it in a moment. Before I do, I will speak to amendments 6 and 10, as they would be functionally identical amendments to new section 105F in clause 3.

New section 105F sets out the process for issuing a code of practice. It requires a statutory consultation on a draft code of practice with the providers to whom the code would apply, Ofcom and other persons such as the Secretary of State considers appropriate. The amendments would apply an additional requirement to formally consult the NCSC when publishing a draft code of practice. I can reassure the Committee that we will continue to work closely with technical experts at the NCSC, as we have done over a number of years.

The telecoms supply chain review demonstrated the Department’s capability to work with our intelligence and security experts to produce sound recommendations, backed by the extensive and detailed security analysis that I know Members of all parties would like to see. That initiated the next phase of the collaborative work that culminated in the introduction of the Bill, and the codes of practice continue that theme. The purpose of such codes is to provide technical security guidance on the detailed measures that certain public telecoms providers should take to meet their legal obligations.

We have already been clear that NCSC guidance will form the basis of an initial DCMS-issued code of practice. The NCSC has already developed a set of technical measures that is in the process of being tested with the industry, and those technical measures have been refined and improved over the last two years. The NCSC will continue to update the measures to reflect any changes in the landscape of threats, as the right hon. Member for North Durham described, and the relationship between the work of the DCMS and that of the NCSC means that such changes would be reflected in the code of practice. Alongside the DCMS and Ofcom, the NCSC will play a key role in advising public telecoms providers on how to implement detailed codes of practice.

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[Chi Onwurah]

I will not detain the Committee very long either, as we agree about the importance of codes of practice. I will not say that I am entirely reassured to hear of the statement being issued by Ofcom and the NCSC on how they will work together, but I certainly think that it is a positive development, and I hope we will be able to see it before the Bill progresses to the House.

On the codes of practice, as my right hon. Friend the Member for North Durham set out, it is important that the sector should understand the standard to which it will be held. I have some concerns about the tiering system, because, as was made clear by a number of witnesses during the evidence sittings, all networks are joined up and we are only as secure as the weakest link. At the same time, it is important to have a proportional burden on new entrants as we indeed hope to diversify the supply chain.

I understand, although perhaps the Minister can clarify the point, that the codes of practice will not refer to the diversification of the supply chain, despite the fact that having a secure network—we shall debate this in more detail—is dependent on having a diverse supply chain. I have made the point a number of times, and will make it repeatedly, that the lack of linkage between the diversification strategy, implementation and the security of our networks is an ongoing cause for concern. However, having made those comments, I do not object to the clause.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Informing others of security compromises

Question proposed, That the clause stand part of the Bill.

[Matt Warman]

As with clause 3, I have already spoken to clause 4, addressing an amendment on this issue. It will be crucial that we ensure that the Government, Ofcom, public telecoms providers and their customers have the information that they need to understand when security compromises have occurred, and then use the knowledge to prevent compromises in the future. New section 105J requires that providers inform their users of significant risks of security compromises and actions that they can take to avoid or mitigate any adverse consequences.

We want to ensure that this is done in a transparent and open way, so the clause specifies that telecoms users should be notified in clear and plain language, and given a named contact they can get in touch with if they have any further questions. Giving users that information will help to ensure that, where possible, they can take swift action to protect themselves and raise broader awareness.

New section 105K requires security compromises to be reported to Ofcom. That information will provide Ofcom with insight into the security of individual telecoms providers and security risks across the landscape, enabling us to target its regulatory action more effectively. The Bill also requires that providers report pre-positioning attacks on the network. These are attacks that do not affect the network or service at the time but allow access that could result in further security compromises. These attacks pose real risks but too often remain invisible to a regulator.

Finally, under new section 105L, Ofcom is required to share information about serious security compromises with the Government. It may also share information on less serious compromises if, for example, it would help the Government with developing telecoms policy and future regulation.

The clause explains how Ofcom can share information about security compromise with other groups and organisations, and the Bill allows information sharing at Ofcom’s discretion with overseas regulators, other providers, telecoms users and, where appropriate, the wider public. It allows Ofcom to advise network and service users of the measures that they should take to prevent, remedy or mitigate the effects of the security compromises, to direct providers to give such advice themselves.

The clause ensures that the regulator has access to the information that it needs, and will help to ensure that the entire industry is aware of new and evolving risks and can respond accordingly—be that a customer changing their password or an operator tightening its defences against a new attacker.

[Chi Onwurah]

rose—

[Matt Warman]

I will pretend I have not finished, and give way to the hon. Lady.

[Chi Onwurah]

I thank the Minister, as always, for graciously giving way. I will make this point later, but I want to give the Minister the opportunity to consider how the requirement for Ofcom to notify users might work with the Information Commissioner’s requirement on data controllers to also notify users when there is a data hack.

[Matt Warman]

Obviously, there could be an overlap in those notification requirements, but our expectation would not be that anyone would receive multiple notifications. That is why there is an emphasis on the nature of communications being clear and obvious to laypeople.

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[Chi Onwurah]

Is my right hon. Friend aware that the hack used by the young person had been around for longer than that young person had been alive? That is an indication of the low level of security TalkTalk had in their network; they had not been able to address a known hack that had existed for at least 16 years. The Bill aims, in part, to address that and the consequences of that lack of security for our constituents.

[Mr Jones]

My hon. Friend is correct. A lot of the debate has been about hardware, but the biggest threat to our national security, in terms of telecoms, is from hacking and cyber-attacks. The changing nature of the threat is interesting. There are state actors and there is organised crime, acting on of behalf of states, but there is also, as referred to by my hon. Friend, some poor teenager who thought it was a good idea. The TalkTalk case showed the emphasis they put on the security of their network. Not just clause 4, but the whole Bill, puts the onus on the operators, which is why it is so welcome. Never again could they be accused of not knowing their responsibilities.

New section 105J requires providers to take “reasonable” steps to inform users about the risk, the nature of the security compromise, the steps the user could take in response, and the name and details of the person to contact. That is fine, but how to respond might be a matter for Ofcom. That is important, because people might then quickly take steps to stop compromises to their security.

The Bill lays out penalties for telecoms operators, but what about the consumer and people who have lost money because of data breaches? Do I assume that the Bill does not change that? It beefs it up, but I assume that any mitigation or compensation that should be paid to individuals who have been compromised would be an issue for Ofcom. When we had the TalkTalk compromise, getting TalkTalk to do anything was like trying to get blood out of a stone. That is important from the point of view of consumers.

It is important that the Secretary of State is informed, but how will that be done? I presume GCHQ and others would do that. Would that lead to lessons learned or to a notice being given to other operators that that has happened? Would that be done by Ofcom, the National Cyber Security Centre or GCHQ, or would it be a combination of all of them? It comes back to the point made by my hon. Friend the Member for Newcastle upon Tyne Central: this is a risk and this clause puts the onus initially with the operators, where it should be.

[Chi Onwurah]

We are cracking on at such a pace that I lost my place somewhat. I had forgotten that we are now discussing clause 4. My apologies, Mr McCabe.

My right hon. Friend the Member for North Durham has already addressed some of the points that I wanted to make, but let me say that we welcome the duty being placed on providers to report security incidents. I have long campaigned, in relation to cases such as the TalkTalk incident, to make that duty clearer and more comprehensive regarding the information that needs to be shared with users and those who are affected, and for them to have some kind of right of redress, which is effectively part of the Bill.

I welcome the requirement in clause 4 to inform others of security compromises, but will the Minister provide more clarity? There is some indication of the range of actors that the providers and Ofcom must inform, but I do not feel that there is an understanding of the level of information that will be shared with different actors. For example, if the public are to be informed of a security breach, compared with the requirement from the Information Commissioner’s Office, which, as I said, actually goes far enough, what level of information might be shared with other actors, such as other networks? My right hon. Friend talked about who else might be informed. It is also clear that the sharing of information will probably need to evolve over time, as the nature of compromises and their potential reach changes. I wonder how these requirements might be adapted to reflect that.

I will just say a little about the sharing of information with overseas regulators. If that is clearly set out in the Bill, I am unable to find it. Presumably, such data sharing will still have to conform with the requirements of our data protection legislation. Will it also reflect international data-sharing gateways for criminal prosecution purposes?

Those are just some general comments. We welcome the clause.

[Matt Warman]

I will reply briefly. On the point about compensation, essentially new section 105W of the Communications Act 2003, which is inserted by clause 8, covers the civil liability point, which I think opens the door that the right hon. Member for North Durham seeks to open. Then there are the notifications to industry of what is essentially best practice and recent threats. Of course, as he implied, there is a balance to be struck with the existing work of all those involved, but ultimately it would feed into the codes of practice, so there is both an informal and a formal mechanism, if I can put it like that.

On the hon. Lady’s final point about the international sharing of information, it would depend on the nature of the information, as she implied. Some of it would pertain to national security, and some of it would pertain to the kind of criminality that she has spoken about about, where there are existing provisions as well. In that sense, of course, it is all covered by our own data protection regime, which has the sorts of carve-outs I have just described but operates in that holistic framework.

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[Matt Warman]

As I said in response to the hon. Lady, there is obviously a potential overlap. The focus of this Bill is on clarity of communication to the consumer, but I am very happy to write to the right hon. Gentleman or the Committee with further details of that potential overlap.

[Chi Onwurah]

The Minister is being incredibly generous with his time. To clarify what we are hoping to receive, as he has indicated, we would not want the ICO to be sending out notifications to 2 million people who had been affected by a hack, and Ofcom to be doing that as well. We would expect there to be co-ordination in that regard, and we would just like to see that set out.

[Matt Warman]

I am very happy to do so. I think it is obvious that clarity of communication would be incompatible with duplication.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

General duty of OFCOM to ensure compliance with security duties

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The amendment is simple and straightforward, sharing the obligation on security and allowing for a forward-looking assessment by Ofcom and network providers to give the assurance that we need and to head off problems before they arise. It is about being forward-looking and not always being reactive. I commend it to the Committee.

[Chi Onwurah]

I rise simply to support the excellent speech made by my hon. Friend the Member for City of Chester. I thank him for his very kind words. In the amendment, he makes an important contribution in ensuring that Ofcom knows what it needs to know and in putting the onus more firmly on the network providers. I simply ask the Minister to respond to the points that my hon. Friend made in his concluding remarks about being forward-looking.

A challenge for us as a nation in securing our networks during such fast-paced technological change is looking backwards to the problems we have had rather than forwards to the evolving and new threats. During the evidence sessions, we were accused of fetishising 5G as if that was the only security challenge, because of the visible problem with Huawei, and that we were not looking more broadly. I admired Ofcom during my time there because it was set up to be a forward-looking regulator. To achieve that aim, when it comes to the sweeping new requirements around security that are placed on it under the Bill, it needs to be able to see what changes are happening and are likely to influence future evolving threats. To do that effectively, amendment 11 requires the network providers to notify Ofcom of planned or actual changes.

It is worth remembering that—I made this point earlier—if BT had been required to notify Ofcom or another body of changes to its network as Huawei moved to a greater and more dominant position in its network, that might have rung alarm bells more generally. We have also already mentioned the shift that we are seeing on the importance of software and software configuration and services in controlling the network. Requiring providers to notify Ofcom of planned or actual changes to the network would make that evolution more easily visible and therefore provide Ofcom with greater visibility of how all our networks are evolving and what new threats may arise as a consequence.

[Matt Warman]

The amendment would add to the general duty in clause 5 that places on Ofcom the duty to ensure that providers comply with their security duties. The duty as written in the Bill makes clear Ofcom’s increasing role. The duties imposed on public telecoms providers in the Bill are legally binding, so as the Bill is written providers should not be taking decisions that would prevent them from complying with those duties in the future. If they were not to comply, they would be in breach of their legal duties and liable for enforcement action, including the imposition of the significant penalties set out in the Bill.

The underlying purpose of the amendment—that Ofcom should take a proactive role in regulating the regime—is already core to what is in the Bill and the Government absolutely agree with the principle that the hon. Member for City of Chester set out. We need to ensure that Ofcom has the tools to be forward-looking so that, in a world of fast-changing technologies and threats, it can understand where operators are taking their networks and how that will affect their security. That is an absolutely essential part of the Bill.

[Matt Warman]

I think the Bill is perfectly drafted down to every comma and punctuation mark. To be slightly more serious, what we have sought to do in the drafting is to strike the balance between proportionate regulations and the overarching requirements for national security. That is the balance that we have struck and it is exactly for that reason that we already do in the Bill what the hon. Member for City of Chester and the shadow Minister seek with the amendment.

In section 135 of the Communications Act 2003, as amended by clause 12, Ofcom is already allowed to require information from providers about the future development of networks and services that could have an impact on the security of the network or service they are providing. That would enable Ofcom, for instance, to assess the security risks arising from the deployment of a new technology or from the proposed deployment of a new technology. For those reasons, I hope that the hon. Members are reassured not just that the Bill does what they seek, but that previous drafts of the Communications Act already did so.

[Chi Onwurah]

I thank the Minister for giving way; in doing so, he shortens what I will say later. I think the Minister is saying that Ofcom has the power to require information, which is true, but the amendment is about providers proactively giving that information. Ofcom cannot request information about a change to the networks that it does not know is happening. I am hoping that perhaps what the Minister is implying is that he would expect Ofcom regularly to review what was changing in the networks and therefore make those requests for further information. Could he clarify that point?

[Matt Warman]

The sort of horizon scanning that the hon. Lady describes is core to all essential regulation, and the relationship that Ofcom has with those whom it regulates promotes the ability to have such conversations. But as I said, the key point is that an operator that proposes knowingly to introduce a risk into its network would clearly not be complying with the statutory provisions of the Bill. That is the essential nub of the issue.

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[Christian Matheson]

I beg to move amendment 12, in clause 6, page 10, line 12, at end insert—

“(3) In this section “another person” means a UK government agency or a person from a UK government agency.

(4) OFCOM may not incur costs exceeding £50,000 in carrying out, or arranging or another person to carry out, an assessment under this section.”.

This amendment restricts those who Ofcom may arrange to carry out an assessment under this section to a UK government agency or person from such an agency. It also caps the cost of an individual security assessment at £50,000 for Ofcom.

The desire of the Committee is to crack on, so I will not detain us for too long. The clause, which covers more than three pages of the Bill, is extensive in outlining the powers of Ofcom to assess compliance with security duties and will amend sections of the Communications Act 2003 to that end. The Opposition’s probing amendment intends to bring clarity in two areas in particular.

The clause will insert proposed new section 105N into the Communications Act to give authority to Ofcom or “another person” to undertake an assessment of whether a network or service provider is carrying out its duties—an inspection, spot check or audit, whatever you will, Mr McCabe. That is all fine, but the appointment of “another person” is far too vague and needs clarity. Since this is a matter of national security, we believe such an authority can be vested only in an agency or arm of the UK Government. It would be wholly inappropriate to outsource it to a telecoms, IT or other consultancy in part because of the need for full co-operation from the business being audited, which must have absolute confidence to be open and transparent and, therefore, must have confidence in the inspector. Ofcom therefore cannot appoint any Tom, Dick or Harry to do the job but only someone who rides above the industry and will not give the inspected business any reason to think that its commercial confidentiality is at stake.

My hon. Friend the Member for Newcastle upon Tyne Central, with her extensive experience of the telecoms sector, has told me that it is a tight-knit industry in which everyone has worked for everyone else at some point. We got that impression from the oral evidence as a lot of the experts had worked with or knew one another. Perhaps it is an exaggeration to say that everyone has worked for everyone else, but it is illustrative of the nature of the sector, so there will be limits on who could be appointed. Does the Minister agree that the current suggestion of “another person” is too wide?

[Chi Onwurah]

Will my hon. Friend give way?

[Christian Matheson]

Always.

[Chi Onwurah]

The impression that I have given my hon. Friend about the telecoms sector being tight-knit is absolutely right. One concern that that brings is that there will therefore be conflicts of interest. Ofcom, as a public servant with the status of a quango, has rules and regulations for declaring interests that mean previous conflicts of interest will not weigh into its work. The concern that I have articulated to my hon. Friend in the past is that that would not apply to “other persons”, so broadly defined.

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[Christian Matheson]

I was going to say cronyism, but chumocracy is a far nicer way to put it, and we have seen it in the way consultancy contracts have been dished out during the current crisis. My right hon. Friend is absolutely right to say that there can be as little scope as possible for people who are perhaps not quite as qualified as they should be to be given such jobs.

[Chi Onwurah]

My right hon. Friend the Member for North Durham raised the Test and Trace programme. I do not want to dwell on that, as it is not within the scope of the Bill, but it is important to understand the extent to which the programme has been used as a vehicle to privatise parts of the NHS by building up private sector skills as opposed to public sector skills. There must be some concern that the huge new powers for and requirements on Ofcom might effectively be used to privatise some of its duties.

[Christian Matheson]

My hon. Friend says that it is not in the scope of the Bill, but so wide is the definition of “another person” that, quite frankly, anything or anyone could be in the scope of the Bill. Again, the possibility is there, and it would not be down to the Minister. I know him—he is a friend and a man of integrity. As my right hon. Friend the Member for North Durham said, however, the next Minister to come along, in this Government, at least, might not be. Who knows? In four years’ time, we might not have that problem.

This is an important aspect of national security, so I ask the Minister for clarity. It goes to the heart of the question of accountability—where responsibilities for inspections should lie. Similarly, in the second part of the amendment, we are seeking clarity on a limit on the amount that can be spent on inspection. We certainly do not want Ofcom to be swayed into decisions about whether inspections can go ahead based solely on fears that it might wrack up big costs. Nor can those costs be allowed to spiral if the first part of the amendment is not adopted and private contractors are brought in but abuse the system. I refer the Committee to the comments made by my right hon. Friend the Member for North Durham a while ago—such abuse does happen.

It is often not helpful to put a financial cost limit on the face of the Bill, if only because it can become outdated over time. To be honest with you, Mr McCabe, the truth is that the £50,000 limit specified in the amendment is arbitrary. We plucked it out of thin air to illustrate a point.

[Christian Matheson]

Fortunately, we will not push the amendment to a vote, so we will not have to put that point to the test. It is an arbitrary figure and I hope the Minister will not fixate on it. It simply illustrates the point that there is a question of open-ended costs. We will not push the amendment to a vote, but we think there is a vagueness and a lack of clarity that needs addressing. I urge the Minister to consider these issues and whether Ofcom would be assisted by the greater clarity that these probing amendments would bring.

[Chi Onwurah]

Again, I rise mainly to support the excellent contributions made by my hon. Friend the Member for City of Chester in moving this amendment. I will raise a couple of points from my experience in this area.

As I said to my hon. Friend, having worked in telecoms for 20 years, when I joined Ofcom in 2004, I had worked with, or worked with someone who had worked with, just about every operator and network provider in the business. Those personal relationships can be helpful in ensuring quick, effective collaboration, but they can also bring about conflicts of interest. Ofcom, as a public body, has processes and procedures to address those conflicts of interest. However, the Bill makes no provision for that to be applied to whoever is “another person”.

It is also the case that, unfortunately, as a regulator, one can be subject to regulatory capture by those who are regulated. The large operators often have tens or, in some cases, hundreds of lawyers and public affairs spokespeople. However, the smaller operators, unfortunately, cannot afford to dedicate so much time and resource to engaging with the regulator. It is critical that this huge increase in new powers and work for Ofcom is carried out in the right way.

As my hon. Friend said, the £50,000 figure has not been calculated on the basis of the likely costs to Ofcom, because the impact assessment does not indicate what they could be. However, it is merely the cost of five consultants at £1,000 a day for 10 days. We know that hundreds of consultants have been hired as part of the Test and Trace programme at those sorts of prices. That likely cost is within scope of any programme that is to be carried out by bringing in large private sector organisations. I hope the Minister will reassure us that he is taking these considerations into account.

Finally—I think we will discuss this point in more detail—this is a huge additional requirement on Ofcom. In the evidence session, Ofcom said that it thought it would need to hire 50 or 60 people to address the requirements of the Bill. There is always going to be an inclination to reduce internal resources, especially if they are in short supply, such as those to do with network engineering resources and the current skill set. So it is really important that the Bill should have a better definition than it currently does of who may carry out the work.

[Matt Warman]

I enjoyed the semantic gymnastics by the hon. Member for City of Chester as he tried to expand the scope of the Bill, but I shall try to stick to what is in it. There is a lot of consensus across parties, so I shall resist the temptation of saying that £50,000 is a demonstration that Labour is willing to put a price on national security, which this party will never do, but I understand the points that he makes on both fronts.

The clause provides Ofcom with strengthened powers, including powers to give assessment notices to a provider, that are vital to enable it to fulfil its expanded and more active role. Assessment notices are an important new power in the regime that will give Ofcom tools to assess fully a provider’s security and the extent to which it complies with its security duties. It is Ofcom’s intention that when assessing a provider’s compliance, its first port of call would be to use its information-gathering powers under section 135 of the Communications Act 2003. Ofcom would then use its power to give an assessment notice if it wanted to check the veracity of the information or to follow up a security concern. While Ofcom will therefore use its powers in a targeted and proportionate way, it is also the case that a provider with good security practices would expect to be subject to a lighter-touch assessment. Providers’ duty to bear the costs of assessments will therefore have an incentivising effect.

The amendment would insert a new subsection into new section 105N, limiting the costs that Ofcom could incur in carrying out an assessment. Fundamentally, a hard cap of any sort will always be an arbitrary number which will potentially put an additional hurdle in place. It might be necessary for some of those tests to require genuinely extensive assessment—penetration testing, or red teaming, as exercises are sometimes called, where penetration tests mimic the action that an attacker might take to access the network. Those attacking actions may of course be from sophisticated sources, and the costs of mimicking them in an entirely legitimate way could be substantial; but it is right, in the interest of national security, that Ofcom does not reduce the quality of its testing. We would not seek to limit that either, notwithstanding its independence.

I can offer the Committee some reassurance, however, that Ofcom’s assessment costs will not be excessive. It has a general duty to act proportionately and to follow other principles representing regulatory best practice. Finally, a provider’s duty is to pay only such costs as are reasonably incurred by Ofcom in an assessment, so there is a balance there.

As to the proposed new subsection that would limit those able to carry out assessments to Ofcom or a UK Government agency, the assessments, as the hon. Member for City of Chester knows, may be complex and need specialist skills. Methods such as penetration testing might need specific technical skills and we should not limit Ofcom in that way. However, we should also bear in mind, as the hon. Member for Newcastle upon Tyne Central mentioned, that the independence and expertise of Ofcom is the greatest bulwark against such entirely unfounded but legitimate concerns as those raised by the hon. Member for City of Chester, about who might be appointed by this or any Government to carry out a task in the national interest. None of us would want—and I do not suggest that the hon. Gentleman is doing this—to get into the business of questioning Ofcom’s independence in performing the tasks in question.

[Chi Onwurah]

I am somewhat concerned at the implication of what the Minister says. We cannot put a price on national security, and Ofcom has a role. In an evidence session, Ofcom’s representatives said that although its role excludes any question of its making security decisions, it would ensure compliance, yet now the Minister seems to be saying that Ofcom will not have the skills to ensure compliance. I agree that there are specialised skills. Penetration testing, for example, is a specialised skill, but I would argue that it is a skill that Ofcom should take on as part of this new remit. I say again to the Minister that the skills needed to ensure compliance should be within Ofcom’s remit, or should be better defined.

[Matt Warman]

Ofcom itself is best placed to exercise discretion as to whether it should carry out those assessments in-house, or whether it should have the flexible capacity to have the capability brought in as necessary. Ultimately, I do not think that anyone would wish to prevent Ofcom from having the ability to do what it thinks necessary by forcing it to use in-house staff only, because we cannot predict the future, as Members on both sides of the Committee have highlighted. Although the cause that the hon. Member for City of Chester is pursuing is a noble one, its unintended consequence would be to constrain Ofcom in both the expertise that it has at its fingertips and the costs that it might incur. We would not want to limit Ofcom’s discretion to make those decisions as an independent organisation.

[Chi Onwurah]

Actually, the amendment would not limit Ofcom’s discretion to bring in additional resources or skills. It would limit Ofcom’s discretion to Government agencies or organisations within the public sector, which, on matters of national security, we should be able to do.

[Matt Warman]

If the hon. Lady were right, the only people from whom we would have heard evidence over the last few days would have been public sector employees. She knows just as well as I do that the cyber-security sector is a vast mesh of public and private expertise, which is inevitable given that we have private networks offering communications services. Although I understand her point, and I am all for Ofcom having as much expertise as it needs to do its job properly in-house, I simply do not think that we should constrain what it can access in the way that the amendment would.

On this, I think we probably agree on far more than we would perhaps like to admit, but the reason that this is a probing amendment, as the hon. Member for City of Chester said, is because imposing artificial constraints would not be beneficial to Ofcom’s work. We understand what he said, however, and in broad terms, the Government agree.

[Christian Matheson]

I am grateful for the debate and for the Minister’s response, but I do not intend to press the amendment any further. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Chi Onwurah]

I beg to move amendment 13, in clause 6, page 10, line 20, at end insert—

“(aa) provide a report on the diversity of their network’s supply chains;”

This amendment gives Ofcom the power to request a report from a network provider on the diversity of their supply chains for the purpose of assessing whether they are complying with the security duties placed on them by earlier sections of the Act.

It is a great pleasure to speak to this amendment, which goes to the absolute heart of one of our key concerns about the Bill—the lack of any reference to the diversification of our supply chain. That is absolutely critical and should be integral to our national security. Our amendment 13 affects clause 6, which we have already discussed. The objective of the amendment is to give Ofcom the power to

“request a report from a network provider on the diversity of their supply chains for the purpose of assessing whether they are complying with the security duties placed on them by earlier sections of the Act.”

As we have heard, clause 6 amends the Communications Act 2003 to insert section 105N, which gives Ofcom powers to assess compliance with the security duties set out in earlier sections, and section 105O, which gives Ofcom the power to impose on providers the duty to do any of a significant list of things, from (a) to (k)—to

“carry out specified tests or tests of a specified description…make arrangements of a specified description…direct an authorised person to documents on the premises…”

or

“assist an authorised person to view information”.

As I have said, this is an integral part of the Bill and requires some considerable debate, so it may detain the Committee for some time, but this debate can be continued at a later time if necessary. There is a long list of requirements that Ofcom might place on network providers, but nowhere is there a requirement for those providers to give a report on the diversity of their supply chains, yet the diversity of a network provider’s supply chains is absolutely integral to the security and resilience of that network provider.

We heard that very clearly during our evidence sessions. In particular, I asked Dr Drew:

“Is it possible for the UK to have secure networks without a diverse supply chain for them?”

Her answer was:

“That is a great question that comes with a very simple answer: no. The worst-case scenario for creating a risk in this sense is when monopoly meets supply chain—in secure supply chain in this case. Arguably, the reason why SolarWinds was so successful is that it provided the same service to so many different organisations and departments in the United States. Therefore, if you access one—SolarWinds—you access almost all. That is the risk.”––[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 87, Q110.]

The reason I have highlighted that particular quote—there were a number of quotations supporting the diversification of supply chains—is that it sets out really well what might happen if a network provider has only one possible supplier. If every aspect of its network is supplied by, let us say, Ericsson, and Ericsson then has supply issues itself or is bought or acquired by another operator from a different country that we might not be so close to, or—I do not mean to imply that this is a possibility—should fail in some way, that network provider no longer has any support for their network and no longer has the ability to maintain it securely.

The dependence of our telecoms security on diversifying the supply chain was set out in the 2019 telecoms supply chain report; yet the Bill fails to mention it at all. The objective of the clause is really for Ofcom to assess how successful a network provider is in meeting our nation’s security requirements. My argument is that it is not possible to do that without understanding the diversity of that network provider’s supply chain; yet the clause as it stands makes no reference to that.

--- Later in debate ---

[Matt Warman]

I will go very briefly over the diversification strategy, which is essentially a £250-million initial tranche of investment to diversify the UK network, with a focus, to a certain extent, on open RAN, as the hon. Lady said. On the information that she would require, I agree with her so comprehensively that the provision is already in the Bill. Section 135 of the Communications Act 2003, as amended by clause 12—she is right that the provision is not in this clause—provides Ofcom with the power to gather information on diversification where Ofcom considers the information necessary for the purpose of carrying out its functions. Clause 12 specifically provides that such information can include information concerning future developments of a public electronic communications network or public electronic communications service that could impact on security. As I said, I agree with her so comprehensively that we had already foreseen the issue and the provision is already in clause 12. The addition of it to this clause would not change that fact. I hope that that provides—

[Chi Onwurah]

I thank the Minister for those comments. He says that the provision is already in clause 12. This is obviously down to my lack of studying, and I thought that I had studied every line of the Bill, but where specifically does clause 12 refer to diversification of supply chains?

[Matt Warman]

The approach that we have adopted across the Bill is that powers such as those in clause 12 are more than wide enough to cover exactly what is needed. What I am essentially saying, I suppose, is that the legal interpretation of clause 12 absolutely does what the hon. Lady seeks, because it is an absolutely essential part of one of the purposes of the Bill. That is why I hope she can take the necessary comfort to withdraw her amendment.

--- Later in debate ---

[Chi Onwurah]

I thank the Minister for that, but I am still puzzled as to where clause 12 says that Ofcom will collect data with regard to diversification of the networks. Ofcom is given the power to collect data with regard to the duties under the Bill, but there is not a duty under the Bill to diversify networks. I am trying to speed-read clauses and subsections; perhaps the Minister can direct me to a part of the clause that specifically requires information concerning. Clause 12 mentions

“information concerning future developments of a public electronic communications network or public electronic communications service that could have an impact on the security of the network or service.”

I agree that that could be liable to an interpretation that included diversification of the network, but given that the Bill does not anywhere mention diversification of the supply chain as being part of the security of the network, I am afraid I do not feel reassured.

[Matt Warman]

I am very happy to write to the hon. Lady to clarify why it is our belief that the Bill does that. What I would say is that the kind of specificity that she seeks would have the unintended consequence of narrowing what we do, rather than retaining the broad powers that we have in the Bill. As has been the case so often today, we do not disagree on the intent that she is seeking to obtain, and that is why the Bill is drafted as it is. As I say, I am very happy to write to her to try to clarify some of that.

[Chi Onwurah]

We all agree that the Minister is someone whom we like and who has the best intentions. On that basis, and on the basis that we can table further amendments at this stage or on Report if his letter of reassurance should not be sufficiently reassuring, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Maria Caulfield.)

Telecommunications (Security) Bill (Third sitting)

Chi Onwurah Excerpts

Committee Debate: 3rd sitting: House of Commons
Tuesday 19th January 2021 Public Bill Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Q It is a pleasure to serve under your chairmanship again, Mr Hollobone, and thanks very much to the witnesses for joining us this morning. I should declare that William and I worked at side-by-side desks at Ofcom for some years, so I am well aware of his expertise in this area.

I have a couple of questions, starting with you, William. We heard from Mavenir on Thursday that open RAN could provide 2G, 3G, 4G and 5G networks now, but the operators were not looking to purchase networks from it. What is your view on the accuracy of that statement and the maturity of open RAN? What challenges does that pose with regard to the diversification strategy set out by the diversification taskforce?

Professor Webb: Thank you, Chi. I am sure Mavenir is correct that it can sell equipment that can do 2G, 3G, 4G and 5G, but that is not sufficient for an existing operator. If an operator wants to put this equipment into its network, it needs to work with its network diagnostic systems; it needs to handle all of the various features that it might deliver to customers, businesses or whatever, or that it might use for optimising its network or the various software systems that it has. It has built these up over 20 or 30 years, so adding in the equipment is a lot more than simply ticking the box and saying that it can transmit 2G or 3G. That takes quite some time, particularly with the more complex base stations that we find in city centres. The ones in rural areas are typically much simpler and less problematic if they go wrong. That is why we see people like Vodafone trialling open RAN in those places.

Although Mavenir has all the ticks in the boxes, it does not yet have work-through with the operators to deliver something that really works for all of its network. As we have heard from the operators, that is a long, slow process. The operators are rightly risk averse—they do not want to rush out a whole load of equipment and for their networks to fail after a few months, with all the problems that that would have for consumers. So it seems to me that we are still some time away—I think the operators have said five, six or maybe seven years—from any significant deployment of open RAN. That sounds very plausible to me as a strategy for evolving a network. Of course, by the time you get to that point, they will have deployed most of their 5G network already, so it feels as though open RAN will be too little too late to have a significant impact on diversifying the 5G networks that we have in this country and that we will have for the next few years.

[Chi Onwurah]

Q What would your recommendations be in terms of an effective diversification strategy? Where is the capability strong?

Professor Webb: If I wanted to diversify, I would instruct the telecoms operators to diversify. I would not try and pull the levers one step removed. I would say to the telecoms operators, either with a carrot or a stick, “You must diversify. If you have x number of vendors in your network, I will give you £x million as a carrot.” The stick might be some kind of licence condition that said, “In order to meet your licence, you have to have at least x number of vendors in your network.” That seems to me to be the way to pull through, and then the operators can decide whether they want ORAN, something like NEC or Samsung or someone like that. They can make that choice and that will pull through the decisions to them, rather than the Government trying to decide on their behalf what the best technology for them to use might be.

[Chi Onwurah]

Q Emily, what other security threats are not fully addressed by the Bill? How can we ensure that our networks are resilient to future security threats? I am thinking of the consolidation in cloud services, for example. As we move to more software-based networks, more and more of the value is in the cloud services. Say, for example, Amazon Web Services was bought by a Chinese company. Would you consider that a threat to the security of our networks?

Emily Taylor: Thank you very much for those questions. As a general point about the cyber-security of critical national infrastructure, I feel a little like we have been fetishising 5G and a single company for the last two years, perhaps at the expense of a more holistic awareness of systemic cyber-security risks. Ciaran Martin spoke eloquently yesterday about the need for flexibility in what critical national infrastructure is. The last year has shown us that what is critical very much depends on what you are going through at the time. Healthcare systems probably would not have been top of the list two years ago, but now they are. The SolarWinds attack shows that the identity of the vendor is not always the key risk point. SolarWinds is a very trusted vendor from a like-minded, close ally country, and yet it turns out to be a critical single point of failure across key, very sensitive Government Departments, both in the US and the UK.

Thank you for talking about consolidation across cloud services, Chi. One of my reflections on open RAN is that, although, of course, I am excited at the idea of open, interoperable standards, which would prevent vendor blocking, most of my experience has been in the internet environment rather than the mobile environment, and we are replete with open, interoperable standards, but we have a major competition problem. That in itself is not going to be enough of a lever to secure diversification.

On the point about acquisitions, particularly where you have cutting-edge technologies coming through, this country is really good at R&D—we have wonderful universities full of very brainy people who are creating things—but there does not seem to be the follow-through to create world-beating companies that can compete across the world stage. Why is that? It is because they either get sold to the US or to China. Of course, the foreign investment security strategies are all part of this as well, but you make a key point. If Amazon Web Services was sold to a frenemy country, that would potentially introduce the same kind of, at least theoretical, security risks that we have been troubled by over Huawei and 5G.

It is also the case that consolidation of infrastructure providers, like the cloud providers, is a security risk, because they become too big to fail. There was a brief outage of Google just before Christmas, and people just cannot work. When Cloudflare or Dyn go down, they introduce massive outages, particularly at a point where we are all so reliant on technology to do our work. These are security risks, and that highlights the need for a flexible approach. You have to be looking across all sectors.

[Chi Onwurah]

Q I see that William wants to come in. I just want to say that we have also been told that there was a major difference between fixed and mobile architecture when it came to security issues. You seem to be saying that there may be differences, but there are security issues within fixed networks as well as within our mobile networks.

Emily Taylor: Generally, our standard of security across the board is not as high as it should be.

Professor Webb: I realise that Chi had also asked me how the UK can strengthen its ability to provide diversified supply chains, and I did not address that.

I want to pick up on something Emily said as well. I think she is absolutely right—the UK has a great number of really excellent engineers, both in universities and in leading consultancy-type organisations. Here in Cambridge there is a plethora of wonderful consultancies and start-up companies. In my experience, the biggest problem is actually finance. To try to raise the finance to get a start-up company off the ground, particularly one that sells to operators who have huge purchasing power and tend to squeeze all their vendors—quite naturally—is very difficult in the UK. It is much easier in the US. Addressing the ability to provide finance for those kinds of entities and, to Emily’s point, allowing them to exist for many years rather than to be bought as part of that financial process would help more than anything else, for the UK to grow its own major players in this space.

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Matt Warman)]

Q Thank you for your comments so far. You will have seen in the diversification strategy that we completely agree with the points you have made around standards and the importance of international co-operation, so I will not go further into that. But it is interesting that a lot of what you have talked about is the diversification strategy rather than the Bill itself. In terms of where we have put increased duties on Ofcom, for instance, where do you feel that there should be more in legislation, rather than in the diversification strategy itself? It seems that tying our hands is not what you are asking us to do, but there is obviously a balance there, isn’t there?

Professor Webb: Yes, I think there is a balance. I do not have strong views on that. The legislation appears to be sufficient and flexible in this space. I think the issue is the way it is implemented, and particularly the downstream actions of the Government and of Ofcom might need a bit more care.

Emily Taylor: The legislation is creating a framework, and a lot of that will be filled out through statutory instrument and the codes of practice that are envisioned. I imagine the codes of practice will reflect the TSRs to a large degree. Thinking particularly about how the legislation might impact on the wish and the essential need to diversify, it imposes very high levels of liability for providers, and almost unlimited duties on everybody for the smallest infractions. That is William Webb’s point about proportionality.

As the measures come to life through secondary legislation, codes of practice and the actions of Ofcom, it is going to be very important that there are checks and balances. I am not sure whether the Committee is hearing from any civil society groups, but I am sure they would be worried about the very wide discretion for the Secretary of State. There is a lot of concentration of power in the Secretary of State and, perhaps, insufficient safeguards, as things are currently drafted.

Also, on the provisions that relate to the identity of the supplier—the nationality—rather than the qualities of security, which I think are the more relevant points, of course identity and nationality can be relevant, but there may need to be more of a look there to ensure that we are on the right side of potential risks of discrimination.

--- Later in debate ---

[Mr Jones]

Q Clearly there is Huawei’s domination in Europe, but what is the strategy when it comes to belt and road? We have seen investments in certain strategic areas such as the ports in Pakistan, Sri Lanka and other places. What is its strategy for telecoms? Is it a similar type of initiative?

Dr Drew: It is very similar. That is a great point to make. Pretty much wherever you see belt and road initiatives in, say, a port or supply chain of a physical good, you will see simultaneous investment and market input in a telecoms sense. There is a digital silk road as much as there is a belt and road initiative in the physical goods and supply chain sense.

They are becoming increasingly entwined fields; 10, maybe 15 years ago you could easily have seen a distinct separation between the physical supply chain and the digital supply chain. That differentiation is fading as we progress through time, and I think the Chinese have worked that out perhaps faster than we have and they are rapidly making inroads in order to amplify that effect and gain the benefits of it.

[Chi Onwurah]

Q Thank you for providing your expertise, Dr Drew. We heard from one of our previous witnesses that the security aspects here might be part of, if you like, a battle for the heart of the internet when it comes to embedding values into the standards that drive it. You seem to be saying that that is a part of China’s requirements to monitor and surveil its domestic population, so I wondered what your thoughts were on that expressly.

Also, you have great experience in evolving security threats. In your view, does the Bill address major telecommunications threats to national security—future and evolving threats? For example, do you think this Bill would have helped to mitigate the impact of the recent SolarWinds Orion network monitoring hack, which was also mentioned by a previous witness?

Dr Drew: I will start with the question of values. I am a great believer that technology and values and norms of behaviour are implicitly connected: you cannot separate them. It should be explicitly understood that it is an implicit truth. I believe—and I have stated this before to some of your colleagues and civil servants in various Departments—that the CCP has realised that the great firewall of China, which tries to police content within China, has holes in it and is not going to last, or was not going to last, given the direction that the internet, freedom of communication and transfer of information is going.

The next logical step, and what I believe is happening, is that if you cannot control the internet within the great firewall, it is better to be able to shape the internet everywhere, both outside and inside it. I would argue that a lot of the technological standard-setting that you see take place in the ITU and elsewhere is essentially that taking place, as is the use of social media platforms to harvest data, which is then used to aid in the censorship of domestic content within China.

With regard to evolving threats and the Bill specifically, I think that the Bill goes a very long way towards pre-emptively meeting threats that are likely to come in the future. My biggest issue echoes what I caught of the previous witness statements: the fact that it is a matter of capacity for the institutions that are given this responsibility—that is, Ofcom—and the ability to change their culture to actively engage within that framework and take action to ensure these standards are met and kept to. Those are my biggest queries about the ability of this Bill to be as forward-looking as we would like it to be.

Finally, with regard to SolarWinds, I think this Bill is aptly timed in a way, given the context of this particular threat. SolarWinds was a perfect example of a supply chain security risk, and a vector of attack that went through a diverse supply chain to meet what should have been some of the most secure systems that the United States had.

Telecoms will, as I have already said, be the backbone of all the UK’s future advancements of technology in all the things we are seeking to develop within our borders. The hardest thing to do as an attacker is to gain access. We should be making it as hard as possible to gain access; we should be making sure that there is as much oversight and understanding as is possible of where our supply chains go, the standards that they should meet, and whether those standards are being met, and I think this Bill goes some way towards that. I would argue that it needs to be continually updated, checked and maintained. This is not a one-off: times change, and the internet changes faster. Those would pretty much be my recommendations.

[Chi Onwurah]

Q Thank you very much for that. The Bill does not create any incentives for network operators to diversify their supply chain, or place any requirements on them to make notifications of changes to their supply chains or their networks that could have security implications. There is no proactive requirement on network operators to do that, or to actively participate in standards development—and we have heard about the importance of standards development and the huge presence of China in that space. Do you have any thoughts about how we could address those incentives, and also the power of standards development?

Dr Drew: The two essentially go together. If you look at the membership and those who take part in ITU standard setting committees and groups, you will see a predominance of not only state representation from China, but also representation of Chinese companies.

I think it needs to be made clear to our providers the benefits to them of being able to set standards; I believe this has been overlooked. The easiest way to do that is to simply look at some of the technical standards that have been set or lobbied for in this group by companies such as Huawei and ZTE, which are essentially entrenching their technical standards into a global standards body—that obviously gives them an advantage in producing that output. I think our companies could benefit in exactly the same way, and they would certainly benefit from taking part.

On having providers be more proactively involved, I think it would make complete sense for these actors to be made to inform Ofcom, or whichever regulator is chosen, of significant changes to their supply chains. It would be akin to having a black box where we go, “Okay, this black box must output something secure, but we don’t need to know how it gets there.” I think we should know, as much as is possible, who is involved in the supply chains to reach our eventual telecoms network.

[Sara Britcliffe]

Q Good morning and thank you for joining us, Dr Drew. In July last year, the Secretary of State made it very clear that the ban on procurement by the end of last year would have an effect on the roll-out. My question is: what will be the impact of the Bill on telecoms providers and infrastructure roll-out, as well as the 2027 deadline?

Dr Drew: It is undeniable, as the previous witness stated, that this Bill will increase costs and potentially slow down the pace at which development of these technologies, to the standards that are now being asked for, can be done. I have been asked similar questions before about what is the cost of us not getting to 5G roll-out as soon as possible. My general response has been to point out that although 5G is a backbone technology that provides access, we have very few practical applications of the speeds and connectivity that this network will provide us with.

It is something that you might see on your phone, but the increase in speed from having a 5G connection will be almost so fast as to be unnoticeable to the normal user. We have not got to the point where we have large city-wide technologies that will draw on this infrastructure, such as traffic management, health systems and economic production systems.

Although there might be a delay and an increase in cost—which again, I think we should try to meet in a way that incentivises more players to come into this market—I think this delay is not crippling. That is because, at the moment, although the 5G technology itself is maturing, the uses of that technology are still immature and I do not think we are losing out too much if we have a slight delay, with the benefit of reaching greater security.

--- Later in debate ---

[James Sunderland]

Q Dr Drew, as a graduate of King’s College, it is great to have you with us. The Bill as currently written provides the Government with unprecedented new security powers. Might this in some way perhaps disincentivise new entries to the market?

Dr Drew: It potentially could, depending on the type of company that you are attempting to incentivise. It would have a different effect on those potentially two or more categories. If you take one category to be pre-existing companies that previously have not operated within the UK, such as NEC from Japan, they are likely not to be put off to such a great extent—they have already had to deal with some level of security commitment within their normal markets. However, I suggest that it could be more of a barrier to entry for the smaller companies that we are attempting to encourage to get into this market. Emerging companies would find a culture of components and cultural risk to how they view their work, as well as the technical and financial cost of meeting the new standards. Yes, I believe there would be an impact, but it would be different between types of vendors that you are seeking to encourage.

[Chi Onwurah]

Q We have talked a lot about 5G—indeed, we have been accused of fetishising 5G. The Government are currently consulting on security issues and fixed networks. Do you see major architectural differences or market differences in the security threats for fixed networks? Are they similar, and should a similar approach be taken to the removal of high-risk vendors? With regards to Ofcom, its principal duties are set out in the Communications Act 2003—I know this very well, having worked for it. They are

“to further the interests of citizens in relation to communications matters; and to further the interests of consumers in relevant markets, where appropriate by promoting competition.”

Do you think there is an argument to add a further security duty, if that is going to take such a large portion of Ofcom’s capacity?

Dr Drew: As to the second question first, I believe that security should be a component here. In fact, I believe it fits with what Ofcom is likely to be responsible for, and with the Online Harms White Paper as well. Security is fundamentally and inexorably linked with technology, culture and communications in the modern sense, so I believe that it would be important for that to be included as a key provision for DCMS.

With regard to the differences between fixed networks and 5G and the implications of this Bill, in the efficacy of its methodology towards the other, there are technical differences in how 5G operates right now and how we perceive the next generation of telecommunications to operate, but those differences will change over time, I believe. They will become less distinct. It is likely that fixed networks will move towards the concept of computing on the edge, and this is indeed already happening in some senses.

As for the actual efforts to control security risk, I do not see any major differences between telecommunications suppliers and fixed network suppliers. There is the same potential risk. You mentioned the SolarWinds hack earlier. That was a fixed network supplier in a way—it was not telecommunications—but there was the same risk involved and the same means of access, through a diversified chain with limited oversight at Government level, because it is a private sector actor with limited responsibilities. That is as true in that case as it would be for a fixed network with Cisco, and as it would be with a telecoms provider by ZTE, Huawei, Ericsson or any other. I do not think there is a significant technical difference to mean that the goals and direction of this Bill could not, and perhaps should not, be applied to others.

[Chi Onwurah]

Q I have just one quick follow-up question. Thank you very much for your evidence. The Bill separates out the diversification strategy, and in fact it does not refer to the diversification strategy. Is it possible for the UK to have secure networks without a diverse supply chain for them?

Dr Drew: That is a great question that comes with a very simple answer: no. The worst-case scenario for creating a risk in this sense is when monopoly meets supply chain—in secure supply chain in this case. Arguably, the reason why SolarWinds was so successful is that it provided the same service to so many different organisations and departments in the United States. Therefore, if you access one—SolarWinds—you access almost all. That is the risk.

The same is true in this sense if you transfer these issues to telecommunications or fixed networks. If you have only a single supplier, all it takes is that supplier to be compromised for your whole network to be compromised. As I said earlier, with any form of cyber-attack, the access is always the hardest part if you are the attacker, so if you have an easy target or if the target is just one point, they can throw all their resources at it and it is easier. I would argue that diversification is one of the most basic and probably most effective means of limiting the damage that could be caused in any attack against one of those vectors.

[Chi Onwurah]

Thank you very much.

[The Chair]

Dr Drew, there are no further questions from Members, so I thank you very much indeed for your time this morning and for sharing your expertise with the Committee.

Dr Drew: It was a pleasure. Thank you.

Examination of Witnesses

Simon Saunders and Lindsey Fussell gave evidence.

--- Later in debate ---

[Christian Matheson]

Q That is the point I am getting at. If I think about recent changes at Ofcom, you have had responsibilities for monitoring the BBC, for example. Online harms is coming to Ofcom. It seems that quite a lot is being asked of you, and demanded of you. How can we be sure that you have the capacity to manage the workload, and the technical capacity to manage these very challenging issues?

Lindsey Fussell: I am certainly not going to deny that there is quite a lot going on, and the organisation is expanding, as you say, albeit with different deadlines and different timescales for the new responsibilities. I have already talked about our recruitment plans to ensure that we have the specialist skills in place to focus particularly on network security, as well as the enforcement and legal support that we will need to deliver this regime, which is a very important part of it.

It is also worth reflecting, though, that there are some really interesting overlaps between different areas of our new responsibilities. If I think of the responsibilities that we have just taken on in relation to video sharing platforms, we are having to understand, as part of those responsibilities, network infrastructure, data analytics and so on. All that actually calls on similar skills and experience that we will need for the regime that we are talking about today, so there is some crossover that we can draw on. Simon, did you want to add anything on that?

Simon Saunders: Absolutely. We have different teams that we are building for the different responsibilities, but there are definitely overlaps between them, and in particular we have built a team of technologists particularly to inform our work on online issues, including, but not limited to, online harm. That comes with a need for us to have technologists who have worked in, and understand, a range of cloud-based computing platforms and the online social media platforms in general. The underlying [Inaudible.] technologies are the ones that increasingly telecoms networks are being built with as well—the so-called cloudification, or virtualisation. So, helpfully, when we recruit specialists in the one area there is the opportunity for them to contribute to the other areas of our responsibilities and to ensure that our approach to these things is [Inaudible.] I think we actually get benefits from having multiple of those duties, rather than separating them.

[Chi Onwurah]

Q Thank you very much for sharing your expertise with us. As a previous employee of Ofcom, for six years, I am, not surprisingly, perhaps, a huge admirer of your work, and, to reflect what was implied by the hon. Member for Hyndburn, I think that Parliament will always benefit from increased telecoms expertise here.

I want, with permission, to ask a question about three areas: security, assets and costs, and duties. I share some of the scepticism of my right hon. Friend the Member for North Durham about the statement that Ofcom will not be making decisions on national security. You will clearly have duties with regard to national security and one of the key duties is to ensure compliance of our entire network—all our networks—with national security requirements. So how are you going to ensure that compliance without taking decisions on security? You seem to suggest that it is just going to be a set of protocols, if you like, from the National Cyber Security Centre, and you are just going to look at ticking the boxes to see that they are met; but in practice that cannot be the case. It is far more complex than that, particularly with regard to emerging technologies.

Another issue is that the Bill puts all the requirement to ensure compliance on Ofcom, in terms of Ofcom seeking information, Ofcom requiring information, Ofcom setting out notices to inspect, and so on. For example, let us say that one of our network operators—I shall not name one—decides to buy all its cloud or virtualisation equipment from a Chinese manufacturer that is not designated a high-risk manufacturer. Would Ofcom be informed of that change in its network? How would that pass to the National Cyber Security Centre—or would it not? Without that kind of duty in place, is there a risk of what you do becoming a meaningless tick-box exercise and, particularly, of its not addressing future and emerging security threats? That is my first question.

Lindsey Fussell: The point that you raise about this needing not to be a tick-box exercise is absolutely vital. I think actually what we are talking about in this legislation is changing culture—crucially among operators but also in terms of giving the regulator new responsibilities and changing the culture that we have, and the responsibilities and the range of the role we take on in relation to this. So this is absolutely—the legislation in fact specifically says so—about future technology as well as about existing networks. It is critical, I think, that we and the operators go on this journey together in terms of promoting that security by design, in everything that is done.

Picking up your question specifically in relation to assets, I think it is more or less impossible to meet the requirements set out in the covid practice for the operators unless they have a detailed asset register of everything that is in their system. We would expect to see evidence of that, and that it is regularly checked, audited and so on. That would be an expectation for us.

On the relationship with the NCSC, as I say, we have specific provisions in place that enable us to share information with the NCSC. As we collect that information with operators, we will discuss with them in advance what type of information they want to see on a routine basis, sharing that and clearly taking guidance from them as necessary if they think there are national security issues that we need to be aware of.

I mentioned earlier about having security clearance in place. To expand on that answer, we have a small number of STRAP-cleared staff in Ofcom, and we will expand that if need be. Those relationships with the NCSC are already in place and will be productive. I should say also that if the NCSC identifies new threats, or if we identify new threats, I think the legislation is flexible and it is right to be so, in that the code of practice can be updated to reflect that.

Simon Saunders: Could I also add that, in respect of our role in emerging technologies, we are not only awaiting others to tell us which emerging technologies to pay attention to? We have our own independent programme of monitoring and horizon scanning for technologies that could appear and have an impact on the networks and the sectors that we regulate. Clearly, the implications are not only about security. They cover a wider range of issues of performance and costs and flexibility and so on. We actively monitor across these sectors for those technologies.

I mentioned earlier that we recently published something about technologies heading for the future generations of mobile. That also covers fixed networks, the advent of quantum technologies and distributed software technologies in networks, and so on. That programme yields an advance look for colleagues about threats and opportunities that are coming towards us into the markets, so that we can build the skills and consider the implications well in advance of their actually impacting on those networks.

[Chi Onwurah]

Q How can you make that assessment without taking decisions about national security? If you are relying, as you seem to be saying, on the National Cyber Security Centre to make those decisions for you, how are you, or they, accountable to Parliament for that? There is a basic issue here, in that you feel that you are not responsible for national security. However, we do not see how that responsibility for national security is made accountable if you do not have any responsibility for it but you have responsibility for compliance. You have not answered my question as to how a change in the networks would be made known to you or the National Cyber Security Centre when there is no requirement for that at the moment, as far as I can see.

Lindsey Fussell: We would, as I say, expect providers to keep detailed records of the components that they use in their networks. I would expect that that is the type of information that, if a significant new vendor is brought into the market, the NCSC might well be interested in. It is worth saying that, while we do not have any direct regulatory powers over the vendors themselves, under these arrangements operators are required to assess the maturity of the vendors and suppliers they use, and the NCSC has issued guidance to them to enable them to assess that maturity. If the question is: if we see a brand new supplier starting to appear, is that the kind of information that we would expect operators to provide to us and for us then to share it with the NCSC? The answer to that question would be yes.

[Chi Onwurah]

Q With regard to asset registry and expectations of having that, having spent a significant amount of time looking in the back offices of operators as to what they have, I know that they are certainly not up to date. We have heard from other witnesses that they do not always have up-to-date and comprehensive asset registers. To rely on an expectation seems a low bar.

Can I come on to duties? I have the Communications Act here, which has got a lot thicker since I left Ofcom. The two duties are the “interests of citizens” and the “interests of consumers” with regard to competition, but there is not a duty on security. Does that not suggest that if there is a conflict between competition or communication matters, that will be prioritised over security if there is not an explicit duty to maintain the security of our networks?

Lindsey Fussell: I think this legislation quite clearly does place explicit duties on us to monitor and enforce the compliance of operators on network security requirements. I do not see that there is any risk that we would downplay the importance of that duty in comparison with others. Clearly, it is for the Government to put forward any changes to legislation to change the balance of our duties or to add new ones, but I think the Government—and, indeed, Parliament—are asking us very clearly to take on those responsibilities through this new legislation.

To pick up on a point I made earlier, in terms of the interests of citizens and consumers, it is important to say that of course it is in the interest of citizens and consumers to have excellent networks functioning that provide them with great connectivity. If we have learned anything from this most recent period, it is how important connectivity is to everybody’s daily life. Of course, that comes across in pricing and support for more vulnerable consumers, and all those other things that we have responsibility for in telecoms.

Actually, promoting secure networks is absolutely in the interests of consumers and citizens as well, not just because of the really damaging consequences of cyber-attacks, but because, ultimately, if we are able to have better networks, that should enable greater economic innovation through 5G use cases and things like that, for example. I think in promoting the interests of citizens and consumers, telecoms security is clearly part of that.

[James Sunderland]

Q The Bill provides powers to fine vendors up to 10% of their annual turnover or up to £100,000 per day for failing to meet standards. Could I ask for your view, please, on how that compares internationally, and whether you feel that that is appropriate?

Lindsey Fussell: It is probably worth saying that, from an international perspective, although there are some other countries—notably Germany and Australia—that have started to explore strengthening their telecoms security framework, I am not aware of another country that is quite as forward leaning in terms of the framework that is being put forward in this legislation.

In terms of the fines, this is an important point—those fines match the level that we are currently able to levy in relation to our other telecoms requirements, such as breaches of our general conditions. Previously, under our past responsibilities, our fines were limited to £2 million, so really quite a small amount compared with the wealth of the largest operators. I think it is appropriate that the telecoms security fines match what we are able to do elsewhere.

The final point I would make is that fining is an incredibly useful power to have because it acts as a significant deterrent and a strong incentive for companies to comply. It is actually not the first lever that we reach for, certainly not maximum fines; it is there and we are ready to use it if we need to, but our starting point would be to work with operators on this journey as they move towards compliance as they respond to new and emerging threats.

--- Later in debate ---

[The Chair]

Any other questions from Members?

[Chi Onwurah]

Q A word on costs, perhaps. You said in your opening statement that you expected it to cost about £6 million to £7 million for Ofcom. How will those costs be funded or raised? In terms of costs on operators, clearly a requirement to do a complete asset register, for example, could be a very significant cost for an operator. What kind of costs do you see? Do you see limits being placed on the costs that operators could incur in complying with Ofcom demands or requests?

Lindsey Fussell: In relation to Ofcom’s costs first, Ofcom is funded in two ways: first, by a levy on the sectors and companies that it regulates and, secondly, through the collection of fees, primarily from our spectrum duties. Our overall funding is obviously agreed by our board but also subject to a cap agreed with Government each year. We are currently in discussion with the Treasury about the exact technicalities and which of those routes will be used to fund this, but it will be in line with Ofcom’s normal funding arrangements.

In relation to company costs, clearly the Government have looked into that, in discussion with operators in relation to the impact assessment for the legislation. I know that there is a plan to do further work on that in relation to telecom security requirements, once companies have had a chance to see the SI and the code of practice.

The point here, which is built into the legislation, is the concept of proportionality. Although we would expect the largest operators—we would work with them intensively throughout the process—to take part in, for example, penetration testing, it is likely we will be more proportionate with the smaller operators and, for example, respond on an incident-based approach, rather than expect them to carry out the same level of detailed work and interaction with Ofcom. In all of that, we would want to be proportionate in the costs imposed on operators, as we are in all our responsibilities, bearing in mind that these are really important responsibilities, as we have been discussing.

[Chi Onwurah]

Q Could you therefore confirm that the costs will be in line with the size of the operator, so small start-ups will not be expected to pay the same as Vodafone, for example? We have not talked at all about the diversification strategy, yet there is agreement that we cannot have secure networks without effective diversification of the supply chain. Are you in a position to monitor the diversification of operator supply chains, and is that something you would expect to be doing?

Lindsey Fussell: If I may, I will bring Simon in on the question of diversification. In relation to costs, the bulk of Ofcom’s own costs are paid by larger operators rather than smaller ones, and we have talked about proportionality in the way we operate that. Again, although I understand the tiering of the system will be set out in the code of practice, that will also be based on size and scale. Simon, may I turn to you on diversification?

Simon Saunders: The diversification strategy that the Government have published has set out a desire to attract new suppliers to the UK and further expand suppliers through open solutions, among other means, and to ensure that that is supported by an appropriate regulatory framework. We are ready to do what comes from that, in terms of any objectives the Government set on the level of diversification and to support measures to enable that. There are clearly synergies between the security aspects and the diversification aspects: in determining how diverse the supply base is, having a fully populated and up-to-date asset register from the operators for the security needs will also support the requirement to assess the diversity, if that is what we are required to do.

[Chi Onwurah]

Q But currently your duties are all to do with the stick, in terms of the enforcement of security requirements, and nothing to do with diversification or the incentives for that?

Simon Saunders: Our existing duties around ensuring the health of the communications market for consumers and citizens point in the same direction in many ways, even if diversity is not spelled out explicitly. We see that a functioning, competitive market for network equipment supports the operators’ ability to provide cost-effective networks that perform well, and that supports the needs of citizens to get great services wherever they are and for those services to be reliable and so on. I do not view this as an entirely separate area from our existing duties; whether specific duties around this are needed is part of the work we are doing to support the taskforce and the plans that come from that.

[The Chair]

This will have to be a very quick answer, because we have to stop at 11.25 am.

Telecommunications (Security) Bill (Fourth sitting)

Chi Onwurah Excerpts

Committee Debate: 4th sitting: House of Commons
Tuesday 19th January 2021 Public Bill Committees

[The Chair]

Thank you for clearing that up. Chi Onwurah.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Q It is a pleasure to serve under your chairmanship, Mr McCabe.

I will be brief, as we are running out of time, but thank you for your expertise. My question to Andy Sellars and Heba Bevan is about the diversification strategy. In what areas do you think the UK has the capability to exploit the opportunities of this diversification strategy, particularly in hardware versus software? We have been told that hardware is beyond our manufacturing capabilities, yet you seem to be making a success out of it, Heba. What barriers are new entrants and smaller companies likely to experience and what kind of interventions should the Government make that are not fully addressed by the diversification strategy in order to ensure a UK capability in this area?

My question to Dr Johnson: we heard from Mavenir earlier, which said that open RAN could provide 2G, 3G, 4G and 5G networks now. We have also heard of the operational challenges associated with that. What is your view on the maturity of open RAN technology? We will start with Andy.

Dr Sellars: The first question was about UK capabilities to exploit the opportunity. Specifically, the UK has a cluster of small-cell base station manufacturers around the Bath and Bristol area. We have satellite communications clusters around the north-east, central Scotland and Surrey. We have a compound semiconductor cluster around south Wales, employing 1,600 highly skilled engineers generating something like £180 million per annum to the Welsh and UK economy. We have quantum encryption expertise funded through Innovate UK’s programmes, we have world-leading providers of optical transceivers for fibre communications, and we have backhaul capability.

[Chi Onwurah]

Q What interventions would support them?

Dr Sellars: For interventions, I would suggest that the Advanced Propulsion Centre is a really good model to look at. It is in a different sector. It is funded through the Department for Business, Energy and Industrial Strategy, and its remit is to help to transition the automotive industry from petrol and diesel engines to electric drivetrains using batteries. Have a look at that as a model. It is an incredibly good model for transitioning an entire industry from one technology to another. It brings together supply chains and is very effective. That is one of the interventions I would suggest. Other interventions could be cyber-certification and just helping UK companies to access some of the standards bodies. That would be very effective. We have a lot of SMEs.

Heba Bevan: Thank you for your question. On hardware, as a company—and to be honest in the UK as a nation —we do not have the essential foundries. We can design and prototype the silicon, and we can work on, from the beginning, how actually it would work, but the actual manufacturing of the chip—not the hardware: that one chip which is like the CPU or a piece of DSP—those actually require very high-intensity foundries. If we want to build them in the UK it will cost around £10 billion today—probably over that number. Andy can correct me on that.

In the far east, they have unlimited resources with the state aid rule; and Europe, in the last few years, passed something, for the state aid rule, called IPCEI, which is important projects of common European interest. Germany was able to fund €1.2 billion from its money to support these foundries. France put in €0.8 billion, and Holland put in €0.4 billion. In the UK in the last few years, in terms of building these foundries, the UK has not supported that type of manufacturing. In chip manufacturing, we do not. However, on the hardware scale we are able. The way we see it, we build the hardware; we build the software—but the actual components and the chips, today we do not have the capabilities in the UK to manufacture that.

[The Chair]

I am really sorry to do this to you, but I think I had better interrupt and go to the Minister or we will run out of time completely.

--- Later in debate ---

[The Chair]

Chi, I think you had something outstanding, and you have got just about a minute and a bit to do it.

[Chi Onwurah]

Q It was a question to Dr Johnson with regard to open RAN maturity as an IP.

Dr Johnson: So, the 45-second answer: Mavenir is using IP access GSM 3G technology in its open RAN development. Pardeep, I think, said that it would be ready within 12 months, and I agree that that is a true statement.

[The Chair]

Did you have anything else, Minister?

--- Later in debate ---

[Mr Jones]

Q Not to cut across you, but, while I accept all that, if from the operator’s point of view they have just invested a lot of capital in ripping out equipment and putting new equipment in up until 2027, what will the incentive then be for those operators necessarily to look at new technologies?

Helen Duncan: I do not think it is necessarily the case that they will just use Ericsson and Nokia equipment. Vodafone, for instance, has committed to equipping something like 2,500 cell sites with open RAN equipment, so they are taking a forward-looking view and trying to stimulate that themselves.

Dr Cleevely: If I may intervene here as well, it is curious, is it not? The economists will tell you that sunk costs are sunk costs and you should always move forward, and that is something to hold on to. Human nature says, “Well, we’ve invested in this—let’s see if we can sweat that asset to make the most of it.” A constructive dialogue with your finance director or chief financial officer is always an essential part of all this, and, for example, it is important to understand what is driving the risk that a company is running, its weighted average cost of capital and its cost of borrowing on the market.

Essentially the point is this: if you can get more business and improve your service, and get more customers and make more money, as a result of doing investment, then that is what you will do. The key point here is whether we can find a way of making it clear and straightforward to the most truculent of finance directors or chief financial officers that this is a good investment for the future. In there lies the key, because you need to get the incentives right.

[Chi Onwurah]

Q Welcome to all of you, and thank you so much for joining us. May I say, particularly to Helen Duncan—I should also have mentioned this earlier when we had Heba Bevan—that it is great to have two other female electrical engineers giving evidence to the Committee. I hope we have many more such qualified representatives of the technology sector in Committees in the future.

We have talked a little about how we got here; Helen, you worked for Marconi, and I worked for Northern Telecom, which bought STC, one of our last UK companies providing telecoms equipment. Without putting words into your mouth, I think the situation could be characterised by a lack of investment in innovation and in British sovereign capability. Now that we are seeking to reverse that, or to jump ahead of that, what interventions could best guarantee the long-term security and resilience of the UK telecoms network, with UK sovereign capability supporting it? Is the £250 million diversification strategy set to achieve that? Can you give examples—I am looking for quite concrete examples—of what you might add or change? David, you talked about needing to give the right incentives to the mobile operators. The telecoms supply chain review was quite clear that there is not an incentive right now in the supply chain to deliver security in mobile networks. What interventions and what incentives should there be?

Helen Duncan: Starting from how we got into this situation, in the 1990s we had three incumbent base station manufacturing companies in the UK, which were Orbitel in Nottinghamshire, and Motorola and Lucent Technologies, both in Swindon. They survived for different lengths of time: Orbitel closed down in 1996 when Ericsson took over, Motorola ceased base station manufacturing in 2002, but stayed open and was then sold to Nokia, and Lucent became Alcatel-Lucent and was closed down. Mergers and acquisitions have clearly played a huge part, as did the dotcom bubble and, as I mentioned, the removal of funding from the defence sector.

Heba made the point that to support semiconductor manufacture in the UK, the £250 million would not even start to scratch the surface. We need to concentrate a little bit further up the food chain. We have some very good capability in this country in component and subsystem manufacture based around the chips. We have some good design capability for chips that are then manufactured in the larger foundries elsewhere in the world. Supporting those activities, the design and the manufacture of components and subsystems, would give us a good basis and improve resilience.

I also want to mention that we have some capability in this country in the test and measurement sector with Spirent and VIAVI Solutions—although VIAVI is an American-owned company, it manufactures RF and wireless test equipment in the UK. By definition, test is ahead of the curve on development. If you can make equipment to test something, you can actually make that equipment, because it is much more complicated to make the test equipment than it is to make the base station or the handset itself. Those companies deserve our support as well. That was a very long question, Chi; I am not sure I covered every aspect you were asking about.

[Chi Onwurah]

Q That’s great. David?

Dr Cleevely: Thanks, Chi—nice to see you. One of the things that was mentioned in the session a little bit earlier was standards, and I think one of the things that changed telecommunications between the 1970s and the dotcom revolution was the emergence of some of these more open standards, such as TCP/IP for running the internet and so on, and HTML for doing the web browsers. I think we could be putting a lot more money and effort into defining some of those standards, because if you define the interfaces for pieces of equipment correctly, you can allow people to come in and provide bits of equipment that can conform to those interfaces. That is one very concrete thing.

You are right to say that, until relatively recently, the penalties on security and so on—the consequences—have been very small, but in terms of behaviour, you need both carrot and stick on things like this. You need to have something that will give the telecom operators a real reason to do something, which might be as simple as a kitemark that says, “The telecoms network you are using has been certified as secure.” That may or may not be the kind of thing that would engender the behaviour change, but it is noticeable that with a number of things like Telegram and WhatsApp, that is seen to be quite an important thing.

Finally, the networks of people are important in all of this. I noticed that the Government have spent some money on the 5G networking across the UK, which is being run by Cambridge Wireless, which I am very proud to have helped set up. We talked in the previous session about the cluster of people down in Bristol working on semiconductors and so on, and I think the Government should be putting some money into networking people together across the UK, and between regions in particular, to have ways in which we can be exchanging ideas and getting to understand what each other is doing. We complain about silos in Government and siloes in corporate, but we have siloes across every single component of this industry, and it is no good to sit in a part of the west midlands, Cambridge or Belfast and not talk to other people about the issues, the standards and the technology. While we seem to think that that gets delivered by the free market, in reality that is not happening, and I think the Government in particular need to intervene to connect up all these people.

Today, I launched the Northern Ireland Engineering Hub for the Royal Academy of Engineering—I am chair of the enterprise committee—and that was specifically picking Northern Ireland because of its deep engineering history in order to start to connect it with a lot of the other things that are happening in the rest of the United Kingdom. I think we need more of that, and I think that out of it will come the same blossoming of innovation and engineering that we have seen previously when people have been connected up together. I am a great optimist on that.

[Chi Onwurah]

Great. Thank you very much.

--- Later in debate ---

[The Chair]

Thank you for that. Chi Onwurah.

[Chi Onwurah]

Q Helen, you were absolutely right to emphasise, in terms of how we got here, with no UK telecommunications network capability, that as well as being about under-investment, which I mentioned, it was about acquisitions—many acquisitions of UK capability and capacity. We have the National Security and Investment Bill going through the House; in fact, that is coming back for Report tomorrow. It will make national security—although not economic security—a ground for intervening in acquisitions and investments, but it will not make investment in companies any easier. We are talking about concrete measures—what measures could Government take, or could be taken, to make significant additional investment available or easier?

Helen Duncan: That is an interesting question.

[Chi Onwurah]

We could perhaps have a telecoms business bank?

Helen Duncan: You cannot stop mergers and acquisitions happening, but if you can put in some sort of criteria that companies that buy British companies need to give a commitment to continue to invest in this country for a set period of time—whether or not that is practicable—that would help.

The most important thing is to make the companies themselves strong enough so they are not targets for asset stripping, as has happened in the past. All the measures that we are talking about to oil the wheels, as David says, will make our companies stronger and able to compete in what is still a global market. I think making our companies competitive is the key to this.

Dr Cleevely: There was a thing called the Macmillan gap, which led to the emergence of the Industrial and Commercial Finance Corporation in the late 1940s. Translated into modern terms, that gap is investments required of around about half a million to £5 million or £10 million. We are still living with that, and that gap was identified in the 1920s. We have a structural problem in the United Kingdom about the way in which we invest in some of what would in Germany be called Mittelstand—those smaller companies. I think you are quite right, Chi, to draw attention to that as a particular risk profile. People do not want to put money necessarily past the seed stage into what I would call late series A and into series B.

The other point is procurement. As I have mentioned before, if you have a client or two who is prepared to buy kit from you, you not only get money but you get experience and expertise and you develop your company. We need more incentives for procuring from those kind of middle-sized companies, because out of those will come the giants of tomorrow.

My experience in Cambridge and elsewhere is that quite often, many of those companies say they are entirely private sector driven, but actually they have been the subject of lots of Government procurement and interventions along the way. That is particularly true in the United States where the SBIR scheme is very important.

[The Chair]

Do you have anything you want to add to that?

Mike Fake: I do not have anything to add to that. I support what has been said.

--- Later in debate ---

[James Sunderland]

Q Thank you for coming in. A quick question: can you put in layman’s terms what the roll-out of 5G anywhere means in broadband terms? Can you also place that in terms of rural areas?

Doug Brake: I worry that sometimes 5G is conceptualised as a singular technology or a singular thing. It is not a monolith; there are a number of different component technologies and a number of different flavours. Depending on whether you are doing a fully 5G network, a stand-alone network or a non-stand-alone network, it is a very different sort of system. There are also a lot of differences between what spectrum is used to deploy the network—if you are using low-band, mid-band or high-band spectrum or a combination of all three. It is hard to answer that question in generalities.

A number of different component technologies and architectures will be rolled out over time. At a high level, the real advantage of 5G compared with 4G is in its flexibility. It is able to tailor its connectivity to a number of different applications’ needs. It can offer extremely high throughput and much faster speeds. It is very reliable, with very low latency. For example, if you want to stream a football match while travelling on a train, it can do that quite well, or quite a bit better than LTE and 4G today. At the same time, you can also change very obscure technical parameters to make for simple communications that require very little battery on the device side to be able to communicate. If you want to have massive deployments of sensors for smart agriculture, or something like that, that have battery life in the order of decades, it can do that. The hallmark is its flexibility.

Given that flexibility, it is anticipated that 5G is going to be much more deeply integrated within the economy and trade sectors, and will be a key tool to boost productivity. There is an important hope that we see a broad deployment, not just in urban areas but in rural areas. Again, I go back to that note on differences depending on the spectrum that is used to deploy—unless it is of interest, I do not want to get too bogged down in the details, but there are real differences in what we would expect to see deployed in urban versus rural areas. But, again, we would also expect to see very different use cases in those areas. Admittedly, there will likely be a performance difference between urban areas and more rural areas. But at the same time, like I said, the use cases look very different—you are not likely to have massive crowds of people all looking to share video from a stadium or something like that in rural areas. There will be a real difference in the roll-out, but I worry that sometimes the challenges with that have been overstated.

[Chi Onwurah]

Q Thank you very much for joining us, Doug. It is particularly interesting to have your American perspective. As you may have heard, my first job as a hardware engineer was with Nortel, a Canadian-American company that had just bought one of the last UK companies in this area. Nortel ended up seeking chapter 11 and having most of its IP bought by Huawei. What are your views on how we got ourselves into this position of not having a single UK or US supplier that can supply to our UK networks? How do you think we can work together to rebuild our telecoms sectors? You talked about pursuing transformational change and an industrial strategy to do that. What might you say to the Minister about how the UK Government should be working with the US, and about what sorts of vehicles there might be to work together and with other allies to achieve that?

Doug Brake: That is a great question. We talk now about needing diversification and seeking entry of a US-UK equipment supplier, but the question and lessons from history are about why we need this in the first place. In the past, we had quite successful telecommunications supply companies, especially in the US. The president of our organisation, Rob Atkinson, set out to answer that question. You may have seen an article in the American Affairs journal, titled, “Who Lost Lucent?” It is a long and interesting article—I will not go into all the details of history. I would say that it is fair to characterise the failures and decline of Lucent as a complicated story, but it stems from a combination of unique challenges imposed by the Anglo-American economic system, systemic failures of US Government policy—particularly with regards to anti-trust and some of the regulatory policy throughout the 1990s—and very strong and aggressive foreign industrial policies, particularly with regards to China, to acquire market share.

I am happy to go through that in some detail, but feel free to cut me off if I go on too long. You are absolutely right to say that we had Lucent and Nortel. Lucent was absolutely massive—it was three times larger than Nortel—and originally spun off from AT&T’s equipment arm, Western Electric. It had the famous Bell Labs. Throughout the ’90s, it was the largest telecoms equipment company and was still growing dramatically overseas, but due to a number of strategic decisions within the company and decisions within the US Government, it ended up really suffering as a result of the dot.com bubble.

Setting aside all the competitiveness questions, particularly with regards to Chinese companies, a hands-off, free market globalised system reigned in the US and UK throughout the ’90s. It was finance-focused capitalism that saw Lucent and Nortel cut their R&D budgets and staff dramatically, particularly as a result of the 2001 crash—much more so than some of their international competitors. With that financial system, it was harder for those companies, which were designed to be growth companies—much more so than a valued company. They were focused on growing quarter after quarter and meeting their financial targets, which made it very difficult to focus on long-term growth. You can contrast that with Ericsson in Sweden, where the Wallenberg family control a lot of the voting shares. Ericsson was able to focus on much longer-term value creation, and they did not cut staff or R&D by nearly as much as Lucent did.

Before that, I think there are a lot of lessons to be learned from the aggressive anti-trust action that broke up Bell Labs and restructured the entire industry. Up until the restructuring of the US telecom market in 1984, Bell Labs had a fantastic situation in order to generate innovation. It had the commercial drive, focus and flexibility that is often lacking in a Government research lab. It also had a long-term focus and an interest in broad technological change, which many R&D efforts in industry do not see. It had steady revenue from telecom rates. There is a complicated story there. It is hard to tell what concentration is good for innovation and where competition is really the order of the day, but it seems clear that the decline of Bell Labs was a real loss.

[Chi Onwurah]

Q Perhaps you could contribute the article you mentioned and the key points made as written evidence.

Doug Brake: Absolutely. We would be happy to do that.

[Chi Onwurah]

Q The second part of my question was about how we can work together.

Doug Brake: Absolutely. I think the diversification strategy is a very strong document. I would say, when it comes to open RAN generally, there are clear benefits that you have heard a lot about, I am sure, including diversification and faster innovation when software is decoupled from hardware. Generally, lower margins on generic components eliminate the risk of the entire sector tipping to a single vendor or a gradual narrowing of trusted suppliers, but there are real challenges with this process. Again, this is going to be a gradual effort. There is not a need to transition immediately.

First, there is a real risk of bandwagoning, where this is seen as a silver bullet and even companies that might not be interested in pursuing this area, such as Nokia and Ericsson, are willing to join in these efforts, even if it is just for the sake of defence. So, there is a real risk of bandwagoning. There is real complexity with transitioning to this sort of system. It is not immediately clear how well open RAN will scale. Actual implementation at scale in urban areas is adding a tremendous amount of complexity. There is a much larger attack surface. It is worth keeping in mind SolarWinds, a US company trusted by many within the Government, which saw this massive damaging breach.

I think there is a real challenge that remains to be addressed in the manufacturing of stand-alone radios. I think that is a potential opportunity for real co-operation: identifying companies that are interested in focusing purely on radio. There is still hardware that needs to be provided that historically was integrated with the broader system, when you only have relatively small providers that are interested in scaling up manufacturing.

[The Chair]

I am just going to interrupt you there. I am sorry, but I am conscious of time and I want to give the Minister a fair opportunity.

Telecommunications (Security) Bill (First sitting)

Chi Onwurah Excerpts

Committee stage & Committee Debate: 1st sitting: House of Commons
Thursday 14th January 2021 Public Bill Committees

[The Chair]

Thank you. We have three superb witnesses from Three, O2 and Vodafone. I am now in the hands of Members.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Q It is a pleasure to serve under your chairship, Mr Hollobone. I want to start by thanking, as well as the witnesses, the members of the Committee, the officials and the staff of the House, who in coming into Parliament during a pandemic are also taking risks, which we very much regret.

I should have mentioned, as an interest, that I spent 20 years working in the telecoms industry within four network operators and vendors, as well as Ofcom, the regulator. I also may know personally some of the witnesses.

[The Chair]

It sounds like you might be dangerously over-qualified to take part in this Committee.

[Chi Onwurah]

You make a very good point, Mr Hollobone. I am going to try to keep my engineering and technical interest as much to the back as possible.

I am the shadow Minister for digital, and I am leading for Labour on this Bill. I will focus on the costs of removing Huawei and the diversification strategy, and Opposition colleagues will be focusing on different areas. I thank you for your presence and expertise. I want to ask two somewhat related questions.

First, some have given estimates of the costs of removing Huawei from your networks, and I want to verify whether those are the most up-to-date estimates. I also want to know whether they include opportunity costs, and the time and resources from your boards and others in your organisations. Are they the full costs, if you like, of the removal of Huawei? How can we minimise the economic impact, in your view? Are there other significant costs associated with the Bill and the implementation of a new security framework?

Secondly, your mobile network procurement is currently made through what I will call full-service providers, such as Huawei, Ericsson and Nokia. They basically design and make a network, and provide it to you—I know it is not quite as simple as that. Do you think the removal of Huawei or the develop of open RAN will change that? Critically, is the Government’s diversification strategy likely to lead to the emergence of significant full-service suppliers that will compete head on with the remaining suppliers, Ericsson and Nokia? If not, what other measures should the Government consider taking? How best can the Government work with partners around the world to achieve their goals? That is quite a lot in two questions.

Patrick Binchy: There was quite a lot in those questions. I guess the first thing is that the costs are obviously commercially sensitive, and we cannot disclose them in a public environment, but we would be very happy to respond to any of the Members or the Committee in private to give the detail behind that. At a more generic level, there will, of course, be cost to the industry and to Three. We had selected Huawei to build our 5G network, and we have now selected a second vendor, Ericsson. We have to go through the process of mobilising Ericsson and removing the Huawei equipment, which has a cost to it and will have an impact.

In terms of the diversification of the market, there are really only two players in the UK market now. As you rightly point out, there are service as well as equipment capabilities within those suppliers. As we look for diversification, we need to diversify across all those aspects of the market. We are working with the Government, NCSC and DCMS in terms of how to approach that and how to build that. We will continue to support that as we go forward.

Derek McManus: We have similar commercial sensitivities on cost. You may or may not be aware that we are not indebted to Huawei. For our network, the cost of removing from the radio network is relatively small compared to some of our competitors. So, I will focus more on your second question, if that is okay.

You are absolutely right that we tend to buy end-to-end service in the current mobile environment. ORAN today is set up with a quite separate and different supply chain, with different companies specialising in software, different companies specialising in hardware and specialists doing the integration. It is likely to change the nature and relationship that we will have with supplies. ORAN is relatively immature in its development. As it is technically and commercially ready for scale deployment, that may well change. But we see today that the leaders in ORAN tend to be smaller companies specialising in the hardware or, more specifically, the software.

Andrea Donà: Very much like my colleagues, I am more than happy to write to the Committee in the future, once we have completed our procurement process, with the details on the cost for replacing our high-risk vendor. More specifically, when it comes to the diversification strategy and the role that open RAN has, we at Vodafone believe that the UK should seek to be a leader in open RAN. We are, indeed, leading the way, and have committed to swapping out 2,600 of our base stations to an open RAN technology.

In order to fulfil that ambition, the current timescales for removing the high-risk vendor equipment must remain unchanged. We need the stability and the time, as Derek rightly points out, to allow industry and Government to develop a diverse supply chain and allow the technology to mature, both in its functionality and its capability, as well as the possibility of scaling industrially. The legacy vendors have had a lot of time in the market to develop their competence. We need to support any new entrants in the open RAN space with appropriate investment incentives and a policy framework that attracts and supports new entrants in the open RAN space.

[The Chair]

Three Members have indicated that they would like to ask questions. We will take them in the following order: James Sunderland, Miriam Cates and Kevan Jones.

--- Later in debate ---

[The Chair]

Superb—textbook answers.

[Chi Onwurah]

Q I ask these questions on behalf of Catherine West. Vodafone runs networks across Europe, and so does Three, whose owner is headquartered in Hong Kong, and O2, which is owned by Telefónica. Does the Bill duplicate or reflect legislation that you have seen elsewhere in your operations? What international comparisons are you aware of? Also, we have talked about standards being a key part of international collaboration. How many people, or what presence, do you have on international standards bodies?

Derek McManus: Basically, we have not seen anything directly like the UK legislation, although various forms of it can be seen internationally. The second question was on standards. We operate in 23 countries, and as you can imagine, their standards are key to us. We hold a lot of expertise, from a Telefónica group point of view, that the UK team is able to rely on and work with to ensure that we are at the very edge of developing the right standard.

Andrea Donà: As the Government plan to take a lead in enhancing the minimum security requirements, and in diversifying their telecoms strategy, we as a global company are happy to support the standard setting, and to advise on the practical implementation of the additional security requirements.

Patrick Binchy: I refer to Derek’s answer. We have a very similar position with regard to the UK legislation: we have not seen quite the same in the other countries. On standards, we play an active role, and we have a number of UK staff who act actively in standards setting.

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Matt Warman)]

Q Thank you to all of you for your engagement today and with the Government up to this point. Given the time, I have one, simple question. The Bill is setting up a new telecoms security framework to enhance network security. How confident are you that you will be able to comply with that in full, and what else would you like to see from the Government to enable you to do that?

Andrea Donà: We need the clarification that I mentioned of what is, and what is not, in scope, so that we have absolute clarity from the word go. We all work together to understand the profile of that implementation. It cannot be a big bang—everything complying from day one. We obviously need to do a detailed risk assessment of the areas that we need to work on immediately on the Bill’s coming into force, and of what can afford to be done at a secondary stage, based on the risk assessment and the risk management analysis of the various assets in our network.

Derek McManus: As I said in my opening remarks, collaboration to date on getting the Bill to this stage has been positive. We should continue that. My request is for flexibility to help us execute effectively, while balancing the other demands on the industry.

--- Later in debate ---

[Mr Jones]

Q The debate to date has mainly been around hardware, but you raised the issue—the bigger threat, certainly that I see, is from hacking and the vulnerability there. In terms of diversification, to be honest, we will have two vendors for the next considerable time, so when we talk about the diversification strategy and getting new vendors into the market, what timescales are we looking at? Are we actually putting all our eggs into the open RAN basket? I agree that there is the possibility of advancing that sector in the UK. Realistically, we will have those two, one of which, we know, is financially vulnerable. What difference would having just one vendor make to you?

Howard Watson: Let me work through that. First, from our perspective, given that we do have quite a large amount of BT in our mobile network, which is with the high-risk vendor, we have a large swap-out programme already under way. Effectively, we already use Nokia to extend their reach, but also to introduce Ericsson. That essentially means that I will be replacing a significant amount of my network over the next seven years.

It is quite difficult for me to start introducing new opportunities and new options into that, certainly in the early part of that. For my network, I see the opportunities in the latter part of this decade, not the early part. That does not mean that there will not be opportunities to try open RAN in some of the rural areas or to conduct some trials with the other vendors that we have talked about. It is very much an industry approach that we are taking here. Some of my colleagues may be able to move a bit earlier. It is important that we collaborate and work as a UK set of operators with the Government to make sure that we have the right rich set of solutions.

We would not want to come down to just one vendor. That would certainly be a worry for many reasons, so we need to continue to ensure that, in the short term, we absolutely have the choice of two.

Alex Towers: Given the timeframes that Howard has described, it is a five to seven-year cycle of replacement for the vendor. That is why it makes sense, we think, to go big now on large-scale trials of things like open RAN. The important investment in R&D and the £250 million is a good step towards that, but we will probably need some more, because we need to be ready for the next cycle if it is going to be a workable solution in future.

[Chi Onwurah]

Q Thanks very much for joining us. We have heard that open RAN will not be mature for another eight years. Do you agree with that assessment? In that case, as you have outlined, we have two vendors and potential financial concerns about one. Can you say categorically whether it is possible to have network security with only one full-scale vendor to choose from and whether it is possible to have that with two?

Secondly, we heard from Sir Richard Dearlove, the previous head of MI5, that when Huawei was first used as a vendor or equipment supplier by BT, it was not considered worth informing Ministers of that fact, despite what he considered to be evident security concerns. Can you say what in the Bill changes that so that the Government of the day will be better aware of ongoing and future security concerns?

Thirdly, on behalf of Catherine West, on international collaboration, what presence do you have on standards bodies? Can you say what your budget is for research and development so that we can see how that compares with the £250 million on offer?



Alex Towers: I will defer to Howard on the questions about standards and technical details. On your point about the relationship with Government, I do not think that any of us were around in 2005, but I know that there is some sort of contested story about exactly who was told what about the introduction of Huawei. You would—[Inaudible.] We have moved a long way on that. We have a very close working relationship with the NCSC and with other parts of Government, and we would be very confident that we are constantly in contact with them about exactly the mix of suppliers that we are using. The introduction through the Bill of TSRs will take that even further, so we would be very confident that we have got a good enough structure there to ensure that any concerns that any part of Government had would be captured and dealt with, and Ofcom is also now in a position to regulate.

The question about relying on just the one supplier is less a concern about security and more one about the commercial resilience of that position. Howard can probably say a little bit more about the standards and the technical questions around that.

[Chi Onwurah]

Q Do you not think resilience is part of security? Is a network secure if it is not resilient?

Alex Towers: I think they overlap and that is one of our questions about the drafting of the Bill. There is clearly a relationship between those two things, and the concern about the timeframes for the removal of Huawei, for example, has been partly about ensuring that we have operational resilience during what is going to be a very complicated engineering programme to take out all its kit without losing resilience, in the sense of outages and blackouts for customers. Some of the Bill’s provisions talk about outages, but there is a difference between outages for operational maintenance and updating of kit and outages because of a security issue or attack. It is going to be quite important to pull those threads apart a little bit.

Howard Watson: On the vendor point, to summarise the approach that we are taking, we stopped purchase at the end of December, we will stop deployment in September of this year, we get down to 35% by two years hence from the end of next week, and then we have it removed from the mobile network by December 2027. I think that timeframe works well for us with introducing effectively a third supplier into our mobile network in terms of that 2027 point. It certainly helps mitigate any future steps in terms of a two-to-one.

I would not bank on it taking a full eight years to have an open RAN opportunity. As we heard from Andrea, colleagues at Vodafone have already started deployment . The real challenge there is about being able to use open RAN in dense urban areas where the technology works at its hardest, shall we say.

On your final question about research, we are in the top five investors in R&D in the UK—we invest in excess of £500 million a year across both research and development. In fact, the only companies that research more than us in the UK are the pharmaceuticals. I have 280 researchers based in the BT labs at Adastral Park near Ipswich and they, plus a standards organisation —we also draw in from engineers across my organisation—remain really actively involved in the standards bodies. I welcome what colleagues from the other operators say and think it is really important that we maintain that as a UK presence and as a European presence to ensure that we are not lost in the middle of any risk of divergence between the US and eastern and Asian countries and China. I would implore us all to work hard to ensure that that does not happen.

[Matt Warman]

Q Thank you to BT for your engagement thus far. I have two questions. The first is the same question I asked the other operators and is about the telecoms security framework. How confident are you that you will be able to comply with all the strictures in that? Secondly, to develop one of the questions that you have just answered, 2027 is very much a deadline and not a target. It is important that we hear more about your ability to meet that target. How taxing is that? How do you plan to make sure that everything you do can encourage the presence of a third—or more—vendor over the time we have between now and then?

Howard Watson: Let me take the final part of that question first, Minister. We are very much aware that that is a deadline, not a target, but we welcome the fact that the deadline is 2027. I have given evidence previously and have talked with Government significantly about the real risks to the availability of service if we pull that date forward.

We have a lot of infrastructure. That deadline allows us to plan carefully how we can switch off a site, if we have to, to replace it and swap it out, so that the spike has overlapping coverage from adjacent sites. Were we to be required to bring those timescales forward, we would be talking about mobile blackouts in the UK, which clearly we all want to avoid, given the increasing dependence of UK citizens on networks. We have a plan that gets us to that. The 35% by 28 January 2023, just two years away, is a little bit more challenging, but we have a plan to get us there. The pandemic is making that challenging, but right now we are on track for that too. I think that answers the second question.

In answer to your first question, the ambition that we have, and what will become requirements across the TSRs, will put the UK ahead of the pack, in being a safe place for people to work and run businesses, secure in the knowledge that we have a high level of protection against cyber-threats. We welcome that, particularly in the environment in which we are now operating.

We have remaining questions—we raised some of those in our written evidence—about the sequence by which the requirements will be applied. We think it is critically important that there is a strong baseline level of compliance that applies to everybody who operates a network in the UK. We do not want to have entry points through weak links across our environment.

Alex Towers: A large majority of what is in the TSRs reflects current best practice and we are already complying with it. There are some places where there is a stretch for us to do more, which is good. The key point, I suppose, concerns Howard’s point about making sure that the baseline for all operators is higher and strong enough, given that these are inter-connected network, as you have already heard this morning. The whole edifice is only as strong as its weakest point. We are concerned about the idea that the code of practice might not apply to some operators, for example. That is the sort of detail that we will begin to see debated further as the Bill goes through.

--- Later in debate ---

[Chi Onwurah]

Q I was interested in what you said about the weakest link for networks. I agree wholeheartedly with that. What are your thoughts on fixed networks? While the Government are consulting on fixed networks, apparently they are not minded to require the removal of high-risk vendors from existing fixed networks. You have Huawei in your fibre-to-the-cabinet network. Do you agree with that? Do you think that there is a reduced risk in the existing fixed network? Do you intend to remove high-risk vendors—that is, Huawei—from existing full-fibre build? Do you think that presents a security risk?

Howard Watson: We do believe that fixed networks, whether full-fibre or fibre-to-the-cabinet, have a different risk profile—a lower risk profile—from mobile networks. Please remember that it is only in the access part of the network, so the fibre—the device in the exchange that connects to that. In the core of the fixed network, we have no presence of high-risk vendors. So we do believe that is manageable. We worked really closely with DCMS and NCSC to arrive at the 35% threshold that was published a year ago, and we think maintaining that in the fixed network is proportionate and sufficient to ensure security there, combined with the oversight that, again, we continue to support from the HCSEC and NCSC to ensure that we are inspecting everything that goes into the network.

I will also say that it is essential that we do take that approach because, as you know, we have large ambitions to increase full-fibre coverage in the UK. Ofcom reported in December that that was now at 18%. We at BT have now built for 3.5 million homes. We have a plan, which we have talked about—this is with the right conditions—to get to 20 million. We do need that 35% to be part of that plan because, again, introducing alternative vendors is challenging.

[Chi Onwurah]

Q Can you say why the risk profile is different for fixed as opposed to mobile?

Howard Watson: Fundamentally, you are dealing with a customer that is a fixed end point, so you are not having to provide handover between different sites as you do in mobile. Essentially, we are taking an electrical signal, modulating it into optical and converting it back to electrical at the other end, in very standard ethernet-based protocols. It is therefore really easy to see if there is a problem, so if something was infiltrating the network, we would spot it very quickly. Also, it is a very segmented network. The FTTC network has a granularity of over 85,000 cabinets in the UK, and the FTTP network has splitters for every 32 homes. Any issues are very easy to spot and so it is much easier to keep secure.

[Chi Onwurah]

Q Finally, with regard to having only two vendors for the mobile network for a number of years, can I ask two questions? I think that there has been a little discussion about resilience versus security, but if you are dependent on two vendors, one goes down and you are dependent on the other, would you say that that network was still secure? And is an increase in prices for equipment likely to accompany the reduction in the number of vendors available?

[The Chair]

I am afraid you have only about a minute to respond. Which of you gentlemen would like to answer?

Howard Watson: I will take that. You are right. We want two vendors to be consistently in the market, so that we can continue to deploy. If one of them were to fail—well, we insist on commercial and physical measures being in place such that we could step in and run the equipment that was already in the network, so it would not be switched off in the short term or anything like that; there would be no immediate threat to the existing network. It is the ability to build forward that is important.

As I think Alex mentioned earlier, the primary reason, which relates to the second part of your question, is that we want competition on pricing. As we have looked to have the two remaining vendors compete with each other for replacement of our Huawei estate, that has actually worked quite well as we have put in place contracts for that replacement.

Telecommunications (Security) Bill (Second sitting)

Chi Onwurah Excerpts

Committee stage & Committee Debate: 2nd sitting: House of Commons
Thursday 14th January 2021 Public Bill Committees

[The Chair]

Chi Onwurah, did I detect that you were going to ask questions on behalf of Catherine West?

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Q Thank you, Mr McCabe. I was going to ask on behalf of my colleague, Catherine West, who cannot be here because we have chosen to sit physically rather than remotely. [Interruption.] It has been decided that we will sit physically. Her question is about international comparisons. Are you aware of what is happening with other countries’ security frameworks in addressing Huawei and high-risk vendors? Are you aware of any international comparisons?

Matthew Evans: From techUK’s point of view, obviously our members—you heard from some of them this morning, and you have more this afternoon—operate across a number of different territories. We seem to be the furthest, or the most advanced, in bringing into place quite a holistic security regime. That is in the first half of the Bill. Obviously, the conversation about high-risk vendors is prevalent in other areas, but I would say that in terms of bringing in a regime that covers the entire telecoms sector, this seems to be a world-leading initiative.

Hamish MacLeod: Chi, I am certainly aware of what other countries are doing as regards high-risk vendors. The operators absolutely accept the Government’s policy and the 2027 timeline. The important thing now is to stick to that timeline, because it allows not only for an orderly removal of the HRV equipment, but for alternatives to develop and emerge as viable competitors to the remaining companies.

[Chi Onwurah]

Q So, what are other countries doing that you are aware of?

Hamish MacLeod: The States, New Zealand and Australia have all excluded Huawei, among others. We could supply you with a full list if that is needed.

[Miriam Cates (Penistone and Stocksbridge) (Con)]

Q The Government’s diversification strategy goes alongside the Bill. Obviously, the principle driver of the diversification is security reasons, but it will also open up the networks to smaller operators—I imagine, Matthew, many of your members are much smaller companies. Do you think that it will have a positive effect on the sector, in that sense, and are there any other barriers to entry for the smaller tech companies that you can identify and that could be addressed in the Bill?

Matthew Evans: Thank you for that question. As I said at the start, we welcome the Government’s diversification strategy. It looks to tackle four issues, really, which are supporting incumbent suppliers to the UK market; attracting other global-scale suppliers; accelerating open interfaces and interoperability; and then the fourth area, which we could probably do with more detail on, which is really building on that domestic capability. I know that the taskforce that helped Government to frame the strategy is working on that aspect of it. As I say, I think we could do with some more detail.

However, we welcome the funding that has come alongside that strategy, and I think that we have a real opportunity in the UK in some of the areas where we have traditional strengths, in the software side in particular, to build some world-leading capability. As for the Bill itself, I do not think that it necessarily presents a barrier to that domestic capability; it is more in how we develop the strategy that sits alongside the Bill.

Hamish MacLeod: Just to add to what Matt said, yes, we very much welcome the diversification strategy. It is an absolutely necessary step to mitigate the risks of having to rely on two incumbents. It gives the UK an opportunity to have a leadership role in the development of exciting new technologies, such as open RAN, and, as Matt said, to grow the supplier base in the UK in the mobile sector.

--- Later in debate ---

[The Chair]

Thank you. I am going to switch to the Minister and shadow Minister. If there is time left, I will come back to other Members, but I want to be sure that we do this fairly. I call Chi Onwurah.

[Chi Onwurah]

Q Thank you, Mr McCabe, and I thank our witnesses for joining us. I started out in telecoms in 1987, as a hardware engineer. Since then, as you have indicated, our hardware sector in telecoms has disappeared. Hamish, you have talked about the equivalence with the computer sector, which has experienced a similar demise over the past 40 years. I am interested in whether it is possible to have a secure telecoms supply chain without having secure hardware. What are your views on that? The draft vendor designation talks a lot about the geopolitical influence of China rather than about the technical requirements, and that would be as true for hardware as it is for software. Do you think it is possible to have secure supply chains without having sovereign or friendly hardware capability?

I am also really interested in what you said, Mr Evans, with regard to research and development. I absolutely agree with you that we clearly need investment in research and development if we are to lead in hardware and in open RAN and software. You said that the £250 million was focused on R&D, but it is actually focused on testing. It does not really do much for research at all, as far as I can see. You also referred to the diversification strategy as a strategy and not a plan, so do we need investment in research and development? Is the £250 million, which I think—I am looking at the Minister now—is over five years, a significant amount of investment in research and development for the mobile sector and tech sector generally?

Finally, the Bill gives the Secretary the State a huge amount of powers to set out requirements to remove vendors and for Ofcom to inspect what operators are doing. Do you think that might have an impact on international foreign investment in the UK telecoms sector, and are you confident that the right sort of technical, security and democratic scrutiny is in place? That is three things: hardware, research and development, and scrutiny.

[The Chair]

Shall we start with you, Mr MacLeod?

Hamish MacLeod: I think the question that was directed at me was whether it is possible to have a secure supply chain. I will not try to gainsay Chi’s knowledge on this, but my understanding is that that is the role that the proposed National Telecoms Lab will perform, to validate that security aspect.

Matthew Evans: I agree with Hamish on that first point, to answer Chi’s questions on R&D. We do not yet know how the £250 million is going to be spent. We believe that we will need to accelerate the maturity of technologies such as open RAN, to make them deployable and commercially viable. Yes, we do need to see more, but as I said, that has to be alongside testing, because accelerating the maturity of it does not really matter if the operators do not get that confidence in either the hardware or the software.

In terms of the Secretary of State’s powers, we are broadly comfortable. We would like to see some thresholds on what amounts to a security compromise, particularly in terms of Ofcom’s powers of oversight. From our point of view, and this is also relevant to the foreign direct investment question, if it is evidence-based, as transparent as possible—we know that we will not see all that evidence, particularly that element in the security services—and the actions are proportionate, that is also important. We believe that that builds into the best practice that we see in other areas of national security.

In terms of the technical expertise, we know that NCSC is going to work closely with Ofcom, in terms of providing that oversight. We are comfortable with the experience that we have had over the past couple of years, as the telecoms supply chain has gone through, in terms of the expertise and the overall regime that this Bill seeks to put in place.

[Chi Onwurah]

Q To clarify that point, you are happy with the existing level of scrutiny and involvement of the security services in the development of the framework and the review of the telecoms supply chain, and so on, and you would like to see that continued. When it comes to investment, could you say a little bit about the £250 million over five years, which is, say, £50 million a year? Is that a significant amount of research and development investment in the tech sector in this country?

Matthew Evans: I think it sends quite a strong signal to the market of the Government’s intent. If we published the strategy without the funding, it would not have sent the same signal. We have seen NEC, for instance, commit to opening an open RAN test centre in the UK. I think that is a signal of how the market is starting to react. This needs to work with the grain of industry, so it is important that industry is able to participate in this funding. I think it sent a strong signal.

[The Chair]

Do you have anything you want to add, Mr MacLeod?

Hamish MacLeod: No.

--- Later in debate ---

[The Chair]

Chi?

[Chi Onwurah]

Q I did not think I would get a chance to ask further questions.

I respect your reluctance, if you like, to voice criticisms at this stage, but can I just get a further idea on the level of R&D spend in the sector? We heard from British Telecom this morning that it spends £500 million a year. I imagine it is not the only company to spend. Do you have a view of the level of R&D spend? You talk about the £250 million being a signal. Am I right in thinking that a lot more investment needs to be attracted into the UK telecoms sector in order to really move the dial? That is what we are talking about, is it not—really moving the dial on UK telecoms capability?

Hamish MacLeod: Absolutely. The £250 million was very much described as an initial £250 million, because you are right that moving the dial will take significant investment. With R&D, there is pure R&D—what you do in labs—but there is also the testbed activity, which is a very important aspect, and trials at scale and all those things. Working with the operators, bringing in international partners and leveraging what is going on elsewhere in the world will all be important.

Matthew Evans: The important word there is “leveraging”. Telecom spend on R&D, both traditional and in open RAN, runs into billions and billions of pounds each year, but we can use that £250 million to leverage greater investment. It has to be with the grain of what the industry is delivering, so we can attract more of that investment. If we can be world leaders in the adoption of open RAN, that is key, and we will attract that investment. That is why I think the supply has to match up with the demand side fully.

--- Later in debate ---

[The Chair]

Do we have any Catherine West questions in this round?

[Chi Onwurah]

Catherine is always interested to understand what international comparisons there are, but I think that that has already been addressed, so thank you; she will be grateful to you.

[The Chair]

In that case, let us go to Miriam Cates, please.

--- Later in debate ---

[The Chair]

Who is next? If there are no pressing answers, I will go to the shadow Minister.

[Chi Onwurah]

Q Thank you for joining us today. Having read your bios, I am impressed by the breadth, geographic as well as technical and operational, of your experience. To make this concrete for me and others, let us say we had a new mobile network operator in the UK tomorrow. Could you—I will ask someone to answer on behalf of Mavenir and someone on behalf of NEC—provide a 2G, 3G, 4G, 5G network tomorrow, or in 12 months? As a software network, what physical boxes or hardware would it be running on? As part of that, what UK or other providers would be in your supply chain?

Pardeep Kohli: Maybe I can take that. To answer your question, if there is a greenfield operator in the UK that is similar to Dish, which we are working with in the US, we can definitely provide that. Dish, for example, is doing only 5G, but we obviously look at requirements all over the world and we appreciate that, in certain parts of the world, there is still a lot of 2G and 3G presence, and, of course, 4G will be there for a long time. We have a solution that can handle 2G, 3G, 4G, 5G, and if you are talking about a 12-month window, we can definitely provide a complete greenfield solution for those four technologies.

Regarding the hardware aspect, everything other than the real radio that goes on the tower and does the transmitting and receiving is largely general computing open silicon—

[Chi Onwurah]

Sorry—say that again. I could not hear that. What is the rest of it?

Pardeep Kohli: It is general-purpose open compute; it is already available hardware.

[Chi Onwurah]

It is computing—it is processors.

Pardeep Kohli: That is correct. You get processors for CPU or general-purpose computing, or even if there are some accelerators, which we use for some specific algorithms, even though they are openly available from companies like Xilinx and Nvidia. They make those chips and we can use them to do some of the functions; but they are openly available, and you can buy that today. That is what carriers are doing. They are building the new networks.

Regarding the hardware that goes on the tower, that depends on the frequency band you allocate, so if there is an operator coming in that is on a frequency band that the existing operators do not have, whoever the vendor is would have to build those radios anyway, and it takes about nine to 12 months to build those.

[Chi Onwurah]

Q Who builds the radios?

Pardeep Kohli: Today, because it has always been proprietary solutions, that is where the challenge comes for companies like us, because it is demand and supply. Until open RAN came in, you really could not build this channel on radio, because there was no demand for it. So today the radios get built only by companies like Huawei, Ericsson, Nokia—I know NEC is building a few of them; but now, with open RAN, there are new players coming up. NEC, for example, is building radios outside of the Japan market. Fujitsu has now started building radios. We are actually building some radios ourselves for the frequency bands that are not available from our partners, so if NEC has a radio we use the NEC radio, but if it does not have a radio and Fujitsu does not have a radio and if you want to get into that market, we start building some of those radios ourselves. So we actually have, now, opened a centre in the UK, to build some of those radios, and we are working with Facebook and together we are building some of the radios for a frequency band not currently open.

[Chi Onwurah]

Q So you couldn’t provide a network tomorrow, but you could provide a network in how long—a 2, 3, 4 or 5G network?

Pardeep Kohli: So if the frequency band radios are available today, which are right, then we can actually build it in 12 months—the complete network; but if the bands are not available and we have to build those radios then, maybe, by the end of next year.

[Chi Onwurah]

Q And NEC?

Chris Jackson: Just to add to what Pardeep has been saying, I think open RAN is not about, necessarily, any one company providing an all-encompassing solution. So at the moment, for NEC, we would provide 4G and 5G radios, but in terms of 2G and 3G we will work with our partners to provide that solution, so we would leverage third parties in order to provide that all-encompassing solution. I think that is the way that open RAN will work moving forward. As I say, you will not see any one company dominating one particular area. It is about bringing best of breed together. In terms of the actual hardware platform, in terms of 4G and 5G, NEC will provide that radio, but as I mentioned for 2G and 3G we would look to other vendors to provide.

[Chi Onwurah]

Q And who are those other vendors? Are they UK, Europe or US-based?

Chris Jackson: The majority would be US-based now, but again, we are not restricted to that. As a systems integrator, which is what you will basically need, moving forward, we would work with whichever vendors were the best of breed for that particular scenario.

[Chi Onwurah]

Q You seem to be saying, then, that you are in a position to compete with Nokia and Ericsson as of today. Is that what you are saying?

Chris Jackson: We would not compete with Nokia and Ericsson in terms of standard RAN, but the whole idea is that we would look to bring open RAN technology. That is the direction that NEC is supporting. If you ask me whether we could step in today and provide that capability, we believe yes, we could.

[Matt Warman]

Q Again, I thank both NEC and Mavenir for the productive conversations that we have had already about getting involved in UK networks. Obviously, one of the things that was in the diversification strategy is the project with NEC—the NeutrORAN project that we have talked about a little bit today already; and I hope we could do, if possible, something similar in the future with Mavenir. What is striking about the NEC project—it is genuinely significant for UK networks —is that it is a £1.6 million initial jolt of funding. First, Chris—but I am very interested in Mavenir’s perspective as well—will you say a little about how Government can best target the funding? One of the things that we learnt in our previous discussions with you was that this is not solely about the scale of the funding but about the targeting, the way in which we do it and how we get the best value for taxpayers. Chris, will you say a little about that, then we can hear from Mavenir about what the equivalent sort of things might be?

Chris Jackson: First of all, thank you very much indeed, Minister, for support in that particular trial. We believe that this is very important, because it has given us the opportunity to showcase 4G and 5G open RAN capability with multi vendors, and we are doing it in supporting the share of your network, which we know is an important KPI for the UK Government, in terms of increasing that capability across the UK. They want to ensure that the investment is targeted at areas within the UK—where the UK will receive the most benefit—and, more importantly, or as importantly, an opportunity for a trial that brings multiple companies together. So, although NEC is leading this particular trial, we are working with a number of other companies to bring this overall solution together. That is exactly what open RAN is trying to embrace, and that is the way forward. We would be delighted to work with Mavenir; we are already involved with Mavenir as well. That is not a hurdle or obstacle for us.

Stefano Cantarelli: There are several angles. The first one is the neutral hosting. I would like to draw attention to the fact that we have already done work with British Telecom, two years back, on neutral hosting, so that has now been talked about for a long time. Also, you might have noticed in the market that companies—the one that comes to mind is Vilicom—have been doing this type of thing, where they deploy Mavenir infrastructure to provide neutral hosting capabilities. So, we are fully supportive and believe that this kind of funding is particularly important.

We understand that that there is some interesting funding. We are in discussion with DCMS. We are discussing some projects that we believe will boost a lot of the innovation in this space. For example, we are trying to get funding for our R&D activities for open source software that could boost the availability of radio units. We say that the radio unit is hardware, but in reality there is of course a bit of software on top. This type of software, which is mainly interfaced towards the rest of the software and the control of the operation and maintenance activities, is not differentiated for each radio unit; it is just standard. By having an open source like that, you can fundamentally get the radio vendors to focus on their IPR for analogue development and being able to produce a radio unit with different frequencies, as Pardeep said before, which we believe could boost the market. That type of funding is particularly useful, because it is aimed at boosting the market and giving availability in the open RAN of these radio units.

I would also like to add that most of the frequencies that are used today in the UK are available in our view for open RAN, so I do not see that as a problem. But that type of investment is particularly important—in R&D—so the trial that you have funded in the first round of the 5G Create programmes is particularly useful to get learning and experience. As I said, in the SONIC, we are particularly active, although that is not a 5G Create programme but a different one. We believe that in the second round, you can focus on funding some R&D specifically to boost the ecosystem of the open RAN.

[Matt Warman]

Thank you.

[Chi Onwurah]

Q I wholeheartedly agree with that last comment about the importance of competition, particularly in the supply chain. That is my experience as well, in terms of building out networks. I am just struggling to understand why Vodafone, Three and O2 said earlier that there were only two full-service suppliers in the UK, when Mavenir is saying to me that you could supply a 2G, 3G, 4G or 5G network within a year. I am struggling to understand how that works. Is it a question of the network operators not being prepared to commission you? Is it an issue of price, complexity or management? Why are you not considered a full supplier by the existing network operators in the UK?

Stefano Cantarelli: Let me just address that initially before anyone else. We are a supplier in other places in the network, so they consider us a reliable supplier. We supply voice services, messaging services and everything else. You mentioned the initial deployment of open RAN by Vodafone this morning. That relates to us, because we are the supplier that it has deployed and is continuing to deploy. We are actually deploying sites for it.

I think that you have to look at two aspects when you are on an operator’s side. I am speaking from experience. It is not just about the technology; it is also about your processes and how you are able to move forward and change your mindset. I think that operators have a lot of complexity. We sympathise with them, of course—it is not an easy environment—but there are a couple of mindsets that they need to over-pass, if you let me use that word.

First, the world is changing. It is not hardware and software together; it is software and hardware disaggregated, and that of course requires some different capabilities. It is the same as when we passed from circuit voice to packet voice. Some people here may not get the example completely, but it is just a different point of view. That does not mean that it is more complex or whatever; it is just a different point of view, and you need to change. We know that change is not an easy thing. That is the first aspect that we need to take into consideration.

The second aspect is that, despite the technology that is available, you still need to consider the in-life service that you need to swap over. You have to consider that you did some planning or design based on certain principles that were available before, and you need to rethink how you are going to do that. For example, most of the 5G deployed today just uses additional frequencies on the existing sites that they have deployed with 4G, 3G and 2G. This is not what I consider full 5G, with all the characteristics of low latencies and so on. You need to start to think about the densification of sites. The Government can help a lot—with policies, by helping to define new capabilities, and by allowing the operators to change their architecture by enabling them to get more sites, and get permits more easily to build new sites.

These sites will not be like sites today; on these sites, there will be lot of carriers, a lot of technologies, and a lot of frequencies. As Pardeep said, a site today is probably just a radio unit that connects, through an internet connection—not necessarily just fibre—to a software data centre. These things are more important, and they are the reason why, although operators are in the middle of that transformation, it is taking a bit of time.

[Chi Onwurah]

Q That is very helpful. I think you said that a site would connect not with fibre, but with something else.

Stefano Cantarelli: Not only with fibre. The open RAN interface is such that you are not forced to use fibre only. You can also use internet connectivity. The internet is what you use when you are in a building.

[Chi Onwurah]

Q That is really helpful. What you are saying is that although you could deliver a full-service 2G, 3G, 4G or 5G network tomorrow, that is not what our mobile operators want. They want an incremental improvement from what they have to what they need to provide services. The cost is a real issue. The transition from 4G to 5G/open RAN is part of the challenge, and we need to understand better how the Government can support that. You talked about making it easier to roll out new open RAN sites. I am interested to know whether there are other ways in which the Government could support that.

Stefano Cantarelli: I add that this transformation in the core infrastructure has already almost happened. Already, most of the core infrastructure of the MNOs is running on general-purpose hardware, such as Dell servers and so on, with software on top of it. The RAN is really the last one to be transformed, for the reason that I gave, and also because, as I said, the market has been dominated by some suppliers who have been providing hardware and software, because they work with better interfaces between the radio access component.

[Chi Onwurah]

Thank you. That is very helpful. That makes me think that there are security issues arising from, for example, having our cloud infrastructure dominated by one vendor, such as Amazon Web Services. Those are perhaps future security issues that we need to look at. I now understand much better what you need to support your transition, so thank you very much for that.

[The Chair]

Q Do any of the witnesses have any final points that they want to make?

Pardeep Kohli: I would just add that I understand the operators’ point of view as well. They are familiar with these vendors; they have been using them and they understand their processes. The vendors know each other. Obviously, we have to gain their trust. We spend over $300 million on research and development every year on open RAN, so we are fully committed, and we will seek any help that you can provide on engaging with operators in the UK market.

Chris Jackson: Can I come in on the NEC side of things?  Frankly speaking, we are re-entering this market, and one of the reasons why is because we believe that open RAN, and particularly the Bill, now provides the framework and conditions to enable us to compete. It is probably similar for the operators; it is a change for them to actively work with companies such as NEC, as opposed to the companies they have previously been working with, but we are starting that process. We are actively engaged with the operators, and more support from the Government, through the Bill, is the way to move this forward.

John Baker: One last comment. Open RAN is all-inclusive, so this is not excluding the incumbents of the network. As soon as Nokia and Ericsson add open RAN interfaces to their products, we will be very happy to work with those guys. That will speed up the ability to deliver open RAN solutions in the marketplace.

--- Later in debate ---

[James Sunderland]

No. Thank you for the answers.

[Chi Onwurah]

Q I am the shadow Minister for the Bill. Let me start by welcoming you and thanking you very much for your expert input. I particularly welcome you, Dr Bennett, for your expertise and the fact that you are the only female witness we have today—it is clear to me, as someone who worked in engineering for 20 years, that the sector’s gender balance has not improved. I hope that Parliament can do more to ensure more balance in witnesses in future.

I have questions for both of you, but let me start with Dr Bennett. I was impressed by your structured list of things that are missing from the Bill, because we are here to scrutinise the Bill and see how we can improve it. I think you talked about the breadth of the security challenge and how this Bill, as it stands, might not meet the full breadth of it. You had four areas, and I think you have run through two of them in more detail. Could I ask you to summarise again the areas that you think are missing? In particular, could you talk a little bit more about the need for improved scrutiny? Could you just summarise that and then go into more detail on the ones where you have not yet?

Dr Bennett: I said that the areas that needed to be covered were network architecture, which is the Bill’s focus, the security of the asset databases that make up the network, how to ensure security of the data passing over the network, the maintenance of security over time, and the operational costs and other impacts of compliance. I have touched on all of them, but perhaps not very much on the operational costs and impacts of compliance.

The more diversified your network, and the more small vendors there are, the harder it will be for them to maintain the level of scrutiny, record-keeping and general security that is required as their bits of the network develop and the interfaces they have with other bits of the network change over time. That is an area where the Government should consider giving help to people to cover those costs. I have said that audit is needed of the assets in the network. The costs of being audited and of dealing with audits are very high, and they are costs that small companies may not have the resources to meet.

If the Government suddenly say, “All components from supplier X must now be removed from the network because of x, y and z,” it is incumbent on the Government to have some funding to help people to do that and to ensure that that really does happen, because it could be a step too far if you have a lot of very small suppliers that do not have the resources of skills, time or money to do it. You need to think about that and about how you can ensure that they are not squeezed out of the network—this diverse network that we want—by those costs.

[Chi Onwurah]

Q To follow up briefly on that, I think what you are saying is that there might be a contradiction between the desire to have a more diverse supply chain, with more smaller players, and increased regulatory and other costs in this. With regard to network architecture and data flows, you make a very good point: we have been concerned about high-risk vendors, designated vendors and so on, but that will not address the issue of securing data flows. Do you have any thoughts, and are you suggesting that more thought needs to be put into that aspect of network security?

Dr Bennett: I think most people would agree that the diversity of end points, of interfaces and of applications running over complex networks all pose security problem areas. The more of those you have, the more resilient your network might be on the one hand, because there are multiple parts, but on the other hand, the harder it is to maintain them adequately.

We see some of these problems today in the decision to move the copper out of the network. Applications that are very important to many users, notably alarm signals, are ones that often assume they have an underlying network of a particular type, and if it is not there those applications do not work and they do not work suddenly. These types of things are very complicated but are actually very important for the end users. It may be an alarm that says an elderly person has fallen in their home; it may be an alarm that says your bank has been attacked by a criminal gang. Who knows what it may be? But those types of things are the types of applications that run over these very complex networks, and unintended consequences can happen as you change the network architecture. If those tier 3 suppliers and the people providing key applications over the network are not involved in this conversation at the CNI level with the top-level suppliers, all sorts of unintended things can happen.

It is a question of how you make sure that you minimise the number of these unintended consequences and support people to realise what they need to do early on, so that they are not caught out by them.

[Chi Onwurah]

A very good point.

[The Chair]

Q I just want to check if Mr Robson has got anything he wants to add at this stage.

Julius Robson: We are discussing the use of the mobile network for new and innovative services, such as worker alarms or falling-over alarms. Actually, there are some smaller players working in specialised industries that understand those customer requirements probably better than mobile operators, and that are very used to dealing with them. In fact, many of the applications for mobile are those that already exist in proprietary and bespoke wireless systems today and that we would want to move on to mobile. Some of the newcomers probably understand these things better than others and the diversification policy is about bringing in that expertise—those industry specialists who understand these requirements.

I would also say that, yes, the network is complicated—radio wireless networks, with lots of endpoints—but intrinsically the wireless medium is insecure. Anyone can listen in to it; it is possible to modify the signal. It has been designed so that everything going over it is secure and protected, and those security paradigms are locked up in the core, so that there are parts of the network that you do not have to worry about, because the information has been secured at a higher level.

I think this was mentioned by Andrea from Vodafone this morning: it is really important for us to understand which parts of the network are in scope of the security rules and which bits we do not need to worry about. The air—anything in the airwaves—is intrinsically already easy to eavesdrop on or modify. So obviously that is out of scope. I think we do not have to get too worried about certain parts of the network.

--- Later in debate ---

[The Chair]

Chi, we have time for another quick question. I think you had a point that you wanted to come back to.

[Chi Onwurah]

Q I did have a question. I also wanted to say that I think Dr Bennett’s point is about transparency, but also about anticipation, responsiveness and a fast response regime. My question is to Mr Robson. You are the Small Cell Forum and you have put a big emphasis on diversity in the supply chain. I think you said—I do not want to put words in your mouth—that security requires diversity in the supply chain. You represent potential small providers. Is there anything that the diversification strategy needs to do that it does not do to better support the entry of smaller players?

Julius Robson: Thank you for that question. I have mentioned chipsets, which are important, and lots of people have talked about software and open RAN. The specialist base station chipsets are an important component, and if we can make them available at scale, which is something that we work on with our FAPI—our functional application programming interface—I think that will really help to fuel the diversity of equipment providers. That is one aspect.

Another aspect—I am not sure how well it is coped with in the consideration of the supply chain—is diversification at service provider level. As I have mentioned, mobile operators are the main service providers for mobile services, but they partner with other providers, particularly ones that work in specialist environments. There is a particular type called neutral hosts that can offer multi-operator services. If you wanted to connect to a hospital, it would not be any good to have just one operator service and have only a quarter of the people served. You need all of them served, and that needs to be done affordably. We want to make sure that the partners of mobile operators, such as neutral hosts, are supported in legislation.

It is also about recognising, as has been mentioned, the challenges of getting the hardware out. You can scale software just by selling it to more people, but hardware needs more feet on the streets and more deployers. We have to look at how we go about enabling more people to deploy mobile infrastructure into communities and industry, so that more people are aware of how it works, which means making the system simpler. From a security perspective, we need to recognise that there are parts of the network that need to be kept secure, and there are parts of the network that are out of scope of that.

[Chi Onwurah]

Q I would be interested to hear more about what is out of scope, because my understanding was that the Bill covered all aspects of telecoms security.

Julius Robson: Just to make the point that you do not have to worry about every last resistor—components were mentioned—and every piece of equipment you have. As I pointed out, the radio airwaves themselves are also not secure. The whole system is designed to securely operate over an untrusted environment. In standards, we have the concepts of trusted and untrusted networks. Typically, you can operate your mobile network over the internet, which is considered untrusted. It is important that we recognise that paradigm.

I would say that all service providers are well accustomed to working with the level of security that the mobile operators and the regulatory regime demand, so we are happy with that. I just hope that we do not introduce new burdens with this legislation that stand in a way of diversification.

[The Chair]

Looking around the room, I think that is it. In that case, I thank Dr Bennett and Mr Robson for their evidence. We are extremely grateful to you. Thank you both very much indeed. That brings this session to a close.

Examination of Witnesses

Dr Scott Steedman and Charles Parton gave evidence.

--- Later in debate ---

[The Chair]

Thank you. I see Dr Steedman nodding assent.

[Chi Onwurah]

Q Can I just say that I had been a fan of the British Standards Institute for decades and am a more recent convert to RUSI?

I start with a question to Mr Parton on behalf of Catherine West, which relates to the last point you made. As we know, the Government were moved to ban Huawei entirely from the network following US sanctions instigated by President Trump. What changes do you see the Biden Administration having on the US’s outlook on China, if any? Can you also squeeze in a reference to Chinese influence on academic research and development in this country? Then I have another question for Dr Steedman, which I will ask afterwards, if I may.

Charles Parton: A very quick response to that. I am more an expert on China than America, but nothing in the last couple of years has suggested to me that the Democrats will take a very much different position from the Republicans on the question of technology. I think they see it as a very great threat, as the Chinese have said. I think nothing will change there.

On the question of academic influence, I really do not think we should underestimate that. I wrote a paper on it about two years ago and much of what I sketched out there exists. For that reason, if I may repeat the point I made earlier, a great deal of effort has to be made, particularly in the STEM subjects. We could talk about the arts subjects and the clampdown, or the influences, on the freedom of speech and the self-censorship there, but in the STEM subjects it is really very urgent that we give our universities good guidance on what subjects, what organisations and what people they can co-operate with in the China context. As some of the research has shown, in terms of what is going on in our universities, there are subjects that we perhaps should not be helping on. GAIT technology with Huawei is an example. What can GAIT technology be used for? Surveillance. Not always, but it is very important in surveillance when you cannot see someone’s face because they are wearing a mask or it is bad weather. We have to be very much more on the ball in that area.

[Chi Onwurah]

As I said, I am a massive fan of standards development. I have worked in the area, with the ITU. I agree that it is essential to enable open RAN and diversification. The Government have said that standards are driven by vendors. We heard this morning from the network operators that their standards presence was driven by their headquarters—their owners. We do not have a UK vendor. When you say that we need to improve our presence in standards bodies, who is going to do that and how is it going to be funded?

Dr Steedman: Actually, we have excellent people in the UK who participate in international standards work. The challenge is that there is a huge breadth of organisations, fora, consortia and formal bodies that generate, develop and maintain the standards that are then used in the evolution of the equipment—hardware, software and so on. We need to pick those organisations that are doing the critical work, particularly perhaps the ones around security, and ensure that we have British voices in there. It is true that if you look at a consortia model, you will find that the consortia that develop standards are what we call pay to play: companies pay to join a consortium, and together they sit and write a standard. But actually there are other organisations that have more governance and more formal mechanisms for national representation, national voice and consumer voice, as well as industry voices. This spectrum is the piece that is often not well understood.

Our ambition, on the diversification taskforce, is to look to co-ordinate UK voices, which are currently fragmented in these multiple organisations, and to see what we can do to target, to focus, on the areas of standards development that we know are going to support the ambition of security, resilience and diversification in the UK—and, frankly, to allow other areas of standards development to carry on as they will. People write standards to suit themselves. But where we need formal standards to support a market structure in the UK, we must be absolutely sure that those standards have had UK stakeholder voices in the process, and that is part of the formal process.

You mentioned the ITU-T. That is where the DCMS, of course, is representing the Government. And the BSI represents the UK in ISO/IEC JTC 1 and in and the European regional organisations, including ETSI. So there is a big opportunity for us to take those lessons that we have learned in influencing these great international organisations and extend that policy of influence through co-ordination of the UK voice in other spaces. The ORAN-ALLIANCE is one example of where we need to improve our co-ordination. Who is going to pay for it?

[The Chair]

I am going to interrupt you. I am sorry, but I want to let the Minister get a last question in. My apologies.

Online Anonymity

Chi Onwurah Excerpts

Wednesday 13th January 2021 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairship for the first time, Ms McVey. I look forward to doing so on many further occasions. I thank the right hon. Member for East Hampshire (Damian Hinds) for securing this exceptionally important debate. I also thank the hon. Member for Stroud (Siobhan Baillie) for her opening remarks, which were more than those of a stand-in. They set out the concerns and the personal experience really well and illustrated why this is such an exceptionally important topic to debate. I am sure that many more Members would be here had it not been for the confusion about whether this debate would be taking place. I know that this is an issue of personal, professional and constituency concern to many Members on both sides of the House; it is not a party-political issue.

I want to start by citing the right hon. Member for East Hampshire, who is aware of the challenge of online anonymity for bullying and negative self-perception among young people. He has spoken often about that, and he noted that in 2018 the OECD found that English schools have the highest reported rates of cyber-bullying out of 48 countries. As we debate online anonymity today, we have to keep in mind the deeply troubling human impact that anonymous presence online can have, not least on our young people.

The Government ought to know about the challenge of online anonymity, because their own Commission for Countering Extremism published academic work in 2019 that noted:

“Increased anonymity is associated with increased extremist …language”

on Twitter and YouTube. Tackling abuse and extremism online must mean tackling the worst parts of anonymity online.

We do not have to rely on academic work or the OECD to know the pain and harm that online anonymity can cause. The hon. Member for Stroud set out some of her experiences, and I would just like to say how sorry I was to hear of them. My hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) set out some of his experiences with Twitter, and it is highly regrettable—it is not the first time I have heard it—that Twitter does not take complaints from Members of Parliament or members of the public seriously enough.

Just last month, we heard the strong testimony of my right hon. Friend the Member for Barking (Dame Margaret Hodge), who highlighted over 90,000 posts aimed at her. Many were antisemitic, misogynistic and ageist, and many were posted by people hidden behind anonymous screens. We know from several colleagues, from the valuable testimony of groups such as the Antisemitism Policy Trust, and from painful personal experience that online anonymity too often accompanies online abuse. Like almost all Members of Parliament, I have experienced abuse online, particularly when I dare to say something that some people might consider to be controversial. I have never been able to find out who was behind the most violent instances of such abuse.

As the Government note, there can be trade-offs in regulating online anonymity. Anonymity can be a shield for brave whistleblowers, for victims finding online refuge, or for children and minorities finding courageous self-expression. We must not forget that the internet and social media applications have many positive consequences for people who can use them. They are free and widely available, and they allow communication across generations, geography, countries and all kinds of barriers. Simply banning online anonymity is unlikely to be workable or desirable. We have to be sensitive to the trade-offs here. Protecting privacy is as much a priority in those cases as protecting against harm is in abuse cases.

However, I would say to the Minister that inaction is the worst trade-off of them all. The Secretary of State said:

“It is a challenging area, this point about anonymity,”

and that the Government will do nothing on it in the proposed online safety Bill,

“But of course we will continue to keep it under review.”—[Official Report, 15 December 2020; Vol. 686, c. 157.]

The Government are evading tough trade-offs altogether. That inaction means turning a blind eye to misinformation online. It means a failure to look at victims of abuse online—young people, minority communities and our fellow Members of Parliament—and a failure to assure them that we will do better by them. It is a failure to stand by the victims in these horrendous examples.

It does not have to be this way. Protecting whistleblowers does not need to come at the cost of protecting people who perpetrate abuse. We could do things differently. Indeed, there are already legal provisions that seek to balance anonymity and online responsibility. Norwich Pharmacal orders, or NPOs, can help obtain the identity of a party in court cases where there is alleged wrongdoing. The regulations in the Investigatory Powers Act 2016 give public authorities the ability to access communications data for potential criminal investigations. As we know, however, the sheer scale of online abuse and extremism means that there is more that we could and should do.

This is not a new issue. As I may have said in the past, my background before coming into Parliament was working in technology, particularly on the networks that now form the internet, for 20 years. The rights and wrongs of anonymity on the internet is a question that is as old as the internet itself, which we should remember is now decades old—it is no longer a rebellious teenager.

Three years ago, I attended a conference held by Ditchley on our rights and responsibilities on the internet, and the right to identity was a particular issue. One of the things that I want to emphasise to the Minister is that, as well as considering the right to anonymity on the internet, we must also consider the right to identity. For example, people should be able to prove who they are when they need to. Companies, services and Governments have a right to ask for identity in certain circumstances, as we do in the physical world. Anonymity should not be treated as a zero-sum concept, but should be qualified by the question, “Anonymous to whom and for how long?”

In real life, we can walk through a crowd without the people around us knowing who we are, but we accept that we are not permanently anonymous. If, for example, a police officer has a reason to review CCTV footage of the area, or we go into a bar and look young enough that we are asked about our age, we may be asked to prove our identity. We would not expect to be able to take out a loan or mortgage without proving our identity. Different degrees of anonymity apply to different situations in the real world. Why should we not reveal on the internet as much of our identity as is appropriate to the situation?

In some ways, as well as a question of principle, this is a question of design, on the way in which permissions and information are required and set out for applications on the internet. It is up to the Government to support a debate about how a spectrum of identity and anonymity should be implemented. A key aim should be to increase the friction that cyber-criminals face when pursuing crime. I do not think anyone is arguing that putting in place identity requirements and appropriate measures to support identification will end cyber-crime or cyber-abuse, but it would increase the friction associated with the crime, and that would help to reduce it.

We should consider a number of areas to address that, some of which have already been raised by the hon. Member for Stroud and my hon. Friend the Member for Ellesmere Port and Neston. We should consider a requirement for companies to know their customers’ identities. Contrary to the Government’s position, requiring users to selectively share their identities with online platforms does not mean that users share their identities with the world at large. Platforms can still protect users’ anonymity on the public platform while having direct access to their identities in the event of harmful behaviour.

[Justin Madders]

We know that the business model of a lot of online tech giants is based on sharing and utilising user information commercially. Does that not show that there must be a way of getting enough information on individuals? The information does not need to be circulated, but that shows that it can be found.

[Chi Onwurah]

My hon. Friend makes an excellent point, and one that I was just about to make by citing the “know your customer” verification requirements in financial institutions, which are part of efforts to prevent money laundering, for example.

Financial institutions, although they have improved immensely in technology over the past few years, are nowhere near as knowledgeable as the great tech giants such as Facebook, Twitter and Google in scooping up and managing data, although they tell us that they manage the data in privacy-conscious ways. As my hon. Friend the Member for Ellesmere Port and Neston said, their business models are driven by access to data. There are real concerns about the consolidation and monopoly control of data, which are not within the remit of this debate, but, as he suggests, the idea that these organisations cannot obtain and protect effectively the identity of their users is clearly ridiculous.

Such checks would not even require platform companies to hold user identity data themselves. Instead, as in financial services, secure, expert identity verification services could allow users to share only aspects of their identity—the minimum required to access online platforms. Again, anonymity would be guaranteed relative to other users. The fact that my bank did a “know your customer” check would not mean that my bank data was suddenly accessible to other customers. I think we accept that principle. At the same time, identity would be available to relevant law enforcement authorities in the event of suspected wrongdoing. The very act of requiring a “know your customer” check would also deter malicious agents from using the cloak of anonymity and would therefore increase the friction in the system.

As a complement to those ideas, we could require platform companies to put up deterrents against abuse and harm, ensuring that customers know that their identity could be shared with law enforcement agencies in the event of wrongdoing. I know that the Minister’s online safety legislation, which is in development, will put a duty of care on the large platforms. Perhaps she will tell us why she does not feel a more proactive duty to prevent and deter harm and abuse would not be appropriate, as it would require platforms to know their customers.

It is important to recognise that people are always customers. Even if those who use Twitter and Facebook are not paying for the service, they are still customers and are effectively paying in an exchange of data, so I feel that the model of “know your customer” is particularly appropriate. We could also consider imposing appropriate forms of liability on companies in the event that they are unable to provide identity information where courts and law enforcement require it.

None of those policies would obstruct the privacy of whistleblowers, children expressing themselves or victims finding solace and solidarity online. None of them would require companies to identify customers on their platforms to other customers. Some of them would not even require companies to have the identity data themselves, allowing the possibility of secure identity solutions held outside of these companies. Some of them are likely to be practices that already happen, but voluntarily and not systematically.

The point is not to pursue one specific policy. The point is for the Government to have a consultation and a debate that sets out policies that achieve those objectives, with a robust set of sophisticated digital identity options that can be statutorily enforced. Inaction, which is the Government’s current default of delaying action in this area, is a choice that evades trade-offs, avoids actions and lets victims down, so I ask the Minister to use this moment to tackle online anonymity head-on. We must grasp this opportunity, and to do so we must answer three questions.

First, what is the right identity verification required to place on online platforms with user-generated content? Can we ensure that those cover what might be needed for effective action against illegal and, in some instances, harmful behaviour? How can those requirements on platform companies have impact, with the right mix of incentives and sanctions for companies?

Secondly, how can we ensure that those online platforms are best co-ordinated with law enforcement authorities, where needed? Should Ofcom’s oversight of platforms’ duty-of-care performance cover how effectively companies work with law enforcement authorities? I understand, for example, that Twitter charges law enforcement officials to provide information on the identity of its users. Will the Minister verify that?

Thirdly, what confidence do we have in the jurisdictional coverage of existing and potential identity verification requirements? Do those apply to the range of internationally headquartered and popular platforms, or are Facebook, YouTube, Instagram and Twitter able to evade coverage as a result of country-of-origin principles?

I hope that the Minister will answer those questions, as the right answers could materially improve our public sphere and address the examples of online harm and abuse that have been raised in this debate. Platforms would be able to verify users easily, law enforcement authorities could pursue justice appropriately, those hiding online abuse behind anonymity would be deterred and, most of all, users would navigate online platforms with far greater assurance of no abuse or extremism.

With that final point, I will close, because the pandemic has demonstrated that our lives are lived online to an extent never before seen. Even when we return to social contact—we all hope soon—as opposed to social distance, the internet, the web and social media platforms will continue to play a greater part in our lives. The hon. Member for Stroud set out the enormous increase in online activity that we have seen as a consequence of the pandemic. I want my constituents to be able to have trust and confidence online, and in those they meet and engage with online. I want them to feel secure in their online and digital lives, because without that they will be handicapped and prevented from engaging as full citizens in what is increasingly a digital world. I ask the Minister to ensure that that digital world is as safe for everyone as the real world is.

--- Later in debate ---

[Chi Onwurah]

Will the Minister give way?

[Caroline Dinenage]

I will get to the end of my sentence, then I will absolutely give way. We want all parliamentarians to feed into this significant and important piece of work, so this is a starting point. We will continue to work with Members of both Houses to listen to their concerns as we move forward, and as hon. Members will be aware, the Secretary of State is minded to undertake legislative scrutiny on this. We want that to start quite shortly.

[Chi Onwurah]

I did not mean to interrupt the Minister in full flow; indeed, I am grateful for the way in which she is responding to the many issues that have been raised. There was an exchange today about whether or not exceptions to the online harms legislation would be enabled through trade deals with the US, for example, and there seemed to be some confusion over that. I wondered whether the Minister would like to take the opportunity to clarify that point.

[Caroline Dinenage]

I am grateful to the hon. Lady for giving me the opportunity to do so. We absolutely stand by our commitment on online harms, and are completely dedicated to it, so nothing in any trade deal—particularly the US trade deal, given that so many of these big social media companies originate there—will impact that. We will continue to promote appropriate protections for consumers online and ensure that internet users, particularly children, are safeguarded from harms. We are keen to maintain very high standards of protection for personal data, including when it is transferred across borders, and those data protection standards would never be lowered as a result of any deal with the US. I hope that that reassures the hon. Lady about our position, and I am grateful that she has given me the opportunity to put that on record.

The other thing I want to put on record is that we are very passionate about our belief, and our willingness to put out there, that companies should not wait for legislation to be in place before they start taking action to tackle online harms. I have said many times that this legislation is coming down the track, and we are not the only country in the world that is bringing forward such legislation. A vast range of measures are already available for platforms to use that could keep their users much safer online, if they want to. To help them with that, alongside the full Government response, we have published interim codes of practice on things such as preventing terrorists’ use of the internet and child sexual exploitation and abuse. Those codes of practice are voluntary, but are designed to bridge the gap until the regulator is operational, fully up and running, and able to produce its own statutory codes. My strong message to online providers is that they should start getting their house in order now, rather than wait for the legislation to bring that about.

Of course, being anonymous online does not give anybody the right to abuse others. The police have a range of legal powers to identify individuals who attempt to use anonymity to escape sanctions for online abuse where the activity is illegal; I have not heard before that Twitter charges for supporting that work, but I will certainly look into it. The Investigatory Powers Act allows police to acquire communications data such as an email address and the location of the device from which the illegal anonymous abuse was sent, and they can use that data as evidence in court. In fact, in 2017-18, the majority of communications data requests from public authorities were for subscriber information. Subscriber information requests seek to identify the user of a telephone, an email address or a social media account, for example. In 96% of cases, the applicant identified the subject of the request as the suspect in the investigation.

The Government are undertaking a review with law enforcement to ensure that the current powers that it has are sufficient to tackle illegal anonymous abuse online. Because the online world is so fast-moving, we want to ensure that our law enforcement agencies are fully equipped to be able to do that. The outcome of that work will inform the Government’s position in relation to illegal anonymous abuse online and, of course, the online harms regulatory framework.

In addition, to ensure that the criminal law is fit for purpose to deal with online abuse, we have instructed the Law Commission to review existing legislation on abusive and harmful communications. The commission has highlighted in its consultation the fact that it acknowledges that anonymity online often facilitates and encourages abusive behaviours. It combines with—the hon. Member for Ellesmere Port and Neston pointed this out—the lack of restraint that an individual feels when they are communicating online, compared with communicating in person.

I have had experience of that myself. People have posted on Facebook, “I’m going to go and see that Ms Dinenage and give her a piece of my mind. I’m turning up here, at this time, on this date. I’m going to be there.” That has never materialised in real life, for which I am very thankful, but you can imagine how frightening it is. People have a lot of bravado when hidden behind a screen or keyboard, and it is very difficult to know whether that bravado could tip over into real life. There is a lack of restraint online, compared with in person, and abusive behaviours such as pile-on harassment and cyber-flashing are much easier to engage in, at a practical level, via the anonymity of these platforms.

As part of the review, the Government have asked the Law Commission to examine how the criminal law will address the encouragement or assistance of self-harm as well. That is something that is incredibly distressing. As the Minister who took over this role, I have found that one of the hardest conversations that I have had to have is with young people who have been incited to self-harm or, indeed, to take their own life online.

The Law Commission has consulted on its proposed reforms, and a final report is expected early this year. We are going to consider very carefully using the online harms legislation to bring its final recommendations into law where it is appropriate to do so. We are really committed to tackling all harms online, including anonymous abuse. The hon. Member for Newcastle upon Tyne Central talked about sanctions. We want to ensure that Ofcom has the ability to use sanctions. They are tough—up to 10% of global turnover. We will not shy away from that—it is more than is being proposed by the equivalent European legislation, for example—because we know that anonymous abuse can have such a significant impact on victims. We have all seen a little bit of it ourselves, but we know that there are people outside the House who are much more broadly affected than we are. Whether someone is a member of the public, a high-profile public figure or a child subject to the most awful abuse outside the school gates, where they just cannot escape it, it is really important that we have a regulatory framework that adequately addresses this issue, while also protecting the value of freedom of expression. We have always to keep that in our minds as well. It is vital that we tread that line very carefully. It is vital that we get the legislation right.

We want all parliamentarians to be able to feed into this really significant and important piece of work. As the hon. Member for Newcastle upon Tyne Central said, there would have been a lot more people here today in normal circumstances. My door is always open, because I want to continue to work with Members of both Houses to listen to their concerns as we move forward.

[Chi Onwurah]

I thank the Minister for giving way again, and thank her again for the tone in which she is responding to issues. May I summarise the position—without putting words in the Minister’s mouth—by saying that online anonymity is not currently directly addressed in the proposed legislation, but it could be if there was thought to be sufficient reason to do so? Is that a fair summary?

[Caroline Dinenage]

That will be addressed in a number of the broader protections. I was very taken with what the hon. Member said—I wrote down the words she used—about the importance of the right to identity, as well as the right to anonymity.

We really want to get this piece of legislation right. The other day, somebody raised with me the analogy of the invention of the motorcar. The internet is such a big invention that it is almost like that. With the advent of the motor car, we did not put in place seatbelts, airbags, the highway code or even the driving test—my grandfather did not take one—from the outset. Some of those innovations had to come down the track, but I really want to put in place as many protections for the internet from the outset as we can. I want to make this piece of legislation as robust, powerful, far-reaching and successful as possible. That is why I am not taking anything off the table. I want genuinely to put this legislation through pre-legislative scrutiny, take the comments of both Houses and ensure that, when we move forward, we do so in the best possible way. That is why we will continue to keep the area of anonymity under review as we progress with the online safety legislation.

Oral Answers to Questions

Chi Onwurah Excerpts

Thursday 10th December 2020 Commons Chamber

[Caroline Dinenage]

My hon. Friend is a great champion for local media and newspapers in his area. We recognise the vital role publications like his own Warrington Guardian play in supporting communities but also in providing reliable information. We strongly welcome the recommendations in the Competition and Markets Authority report and the setting up of a digital markets unit within the CMA to ensure fairness in regulating digital platforms. The Minister for Media and Data meets very regularly with the sector to discuss all its ongoing concerns about this.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I do not know who your secret Santa is, Mr Speaker, but I do know the Minister’s: Google and Facebook. Only, they are not buying presents—just using our data, behaviour and social contacts to tell us what to buy through their domination of online advertising, while our local retailers, who pay significant taxes and employ so many people, lose out. Can the Minister confirm that the digital markets unit’s powers have yet to be defined and that powers in the long-delayed online harms Bill are being watered down? Will she promise now to stop tech companies selling on our data, and put us back in control of our digital lives and Santa back in charge of Christmas?

[Caroline Dinenage]

I sincerely hope they are not my secret Santa. Online advertising is clearly an important driver of the UK economy. The Government are really committed to supporting the continued growth of the industry, but it needs to be fairer and better regulated. So we will launch a public consultation next year on measures to enhance how online advertising is regulated in the UK. That will build on the call for evidence we launched this year, and we will consider options to enhance the regulation of advertising content and placement online. The hon. Member asks about the online harms response. It will be published very shortly and it will not be watered down—there is my secret Santa gift for her, Mr Speaker.

Digital Infrastructure, Connectivity and Accessibility

Chi Onwurah Excerpts

Thursday 3rd December 2020 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I would like to start by thanking the right hon. Member for Tatton (Esther McVey) and my hon. Friend the Member for Sunderland Central (Julie Elliott) for securing this important and excellent debate. When I first entered Parliament 10 years ago after 20 years as a telecoms engineer, I was somewhat disappointed by the lack of discussion on digital connectivity and digital opportunity. That has really changed in the past few months, although not significantly in Government time. Members have shown real knowledge, passion and understanding, and I hope that the Minister has been listening.

As several Members—most eloquently, I thought, my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh)—pointed out, the covid-19 pandemic has highlighted the significant role that online services play in supporting people’s social lives, education, workplaces and communities. We have seen a huge shift in people’s dependence on digital. The Office for National Statistics estimates that almost 50% of people are currently working from home, and 80% of people told it that they feel digital technology has been a vital support to them in lockdown, if they have access to it.

Several Members—in particular the hon. Members for Beaconsfield (Joy Morrissey) and for West Dorset (Chris Loder) and the right hon. Member for Orkney and Shetland (Mr Carmichael)—emphasised the economic importance of digital connectivity, but for it to play that role, we need it to be reliable and fast. The 2020 National Audit Office report “Improving Broadband” found that, at 14%, the UK has one of the lowest full-fibre coverage rates in Europe, as several Members observed.

The fact is that successive Tory Governments have presided over 10 wasted years for our telecoms infrastructure. The last Labour Government made great strides in building a digital economy. Our Communications Act 2003 set the strategy and vision, and our office of the internet was a world leader. We oversaw the roll-out of first-generation broadband to 50% of households by 2009 and were in the top 15% of global broadband speed tables, with competitive infrastructure positions.

[Jane Hunt]

I wonder whether the hon. Member agrees with me that, actually, it was the Labour Government who made telecommunications companies spend billions of pounds buying bandwidth that previously had been only a matter of hundreds of pounds. If they did not have that bandwidth, they did not have that network and they were not in the market.

[Chi Onwurah]

I am afraid that I do not have the time fully to go into the reasons why that intervention is wholly without value. First, we are talking about fixed networks here. Secondly, the huge improvement in the services that could be offered on spectrum meant that that spectrum was valuable, and it is in the public interest that valuable spectrum should have its value recognised.

This Government have flip-flopped and U-turned when it comes to our network infrastructure. As the right hon. Member for Tatton reflected, the Prime Minister initially promised full fibre to all by 2025. In their 2019 manifesto, the Government downgraded that pledge to universal gigabit-capable broadband to every home. Then, only last week, they sneaked out in the spending review plans to water down their broadband promises; instead of keeping to their manifesto promise, the Government are now aiming only to have a minimum of 85% coverage by that date. The budget for that plan remains the same, but now only £1.2 billion of the £5 billion will be made available up until 2024. We were promised roll-out; what we got was roll-back.

BT’s own analysis shows that at the current rate, full-fibre coverage will reach only 70% of UK premises by 2025 without the removal of key barriers, making even the revised target unrealistic. At the current rate, the Government’s 100% target will not be met until 2033, disappointing many Members, including the hon. Member for Stoke-on-Trent North (Jonathan Gullis).

The Local Government Association also has major concerns about the Government’s intention to centrally procure and manage the contracts for the delivery of gigabit-capable broadband infrastructure. I hope that the Minister will take this opportunity to reassure local authorities that they will be involved in the local delivery of both broadband and 5G infrastructure.

For many, access to fibre is but a dream. As the hon. Members for Totnes (Anthony Mangnall), for Devizes (Danny Kruger), for North Devon (Selaine Saxby) and for North Norfolk (Duncan Baker) set out, in the wastelands of Wiltshire and the deserts of Dorset they have no, or very little, broadband access. There are 1.9 million households without access to the internet and 155,000 UK properties are unable to get decent broadband. In rural areas, 50% of rural premises have patchy and unreliable mobile reception. Nearly half a million rural premises cannot get decent broadband. The broadband universal service obligation is no such thing, with rural residents potentially charged tens of thousands of pounds to connect to broadband, as the hon. Member for Loughborough (Jane Hunt) highlighted.

We need to provide network access to protect the most vulnerable in our society. FutureDotNow estimates that between 175,000 and 500,000 of those who received letters instructing them to shield during the pandemic had no internet access, yet because the letters were peppered with references to websites, those individuals would find it incredibly difficult to access the information they need. Yet the Government do not even have a target for digital inclusion. Could the Minister speak to that?

Many Members made the point—I pay tribute to the work of my hon. Friend the Member for Sunderland Central and her all-party group, and the passion of my hon. Friend the Member for Ilford North (Wes Streeting) in this area—that digital infrastructure is not enough. We need digital skills, which are economically key to keeping us safe online and unlocking the potential of digital. A lack of digital skills isolates people. To participate effectively online, individuals need devices on which to access the internet. Without them, individuals are excluded. What is the Minister doing to provide the digital skills and access that are needed?

I am aware that the Minister previously told the Select Committee on Digital, Culture, Media and Sport that although he wanted to do more to help those who are digitally excluded, there were limited resources. I think the Chair of the Select Committee dealt effectively with that point. I urge the Minister to find the political will and set out plans to ensure that nobody in the UK is left behind through a lack of digital literacy in this digital age, and that everyone can be an active participant in our increasingly digital world. Digital should be an enabler, not a divider.