Rural Broadband

Debate between Clive Betts and Neil Parish

Thursday 10th September 2015 Westminster Hall

[Mr Clive Betts (in the Chair)]

I call Neil Parish to move the motion.

[Neil Parish (Tiverton and Honiton) (Con)]

Thank you, Mr Betts. It is a great pleasure to work under your chairmanship. Do I have to move the motion now?

[Mr Clive Betts (in the Chair)]

Yes, move the motion—that is the new format.

[Neil Parish]

I do not have it to hand, which is not a good start.

[Mr Clive Betts (in the Chair)]

It is arriving.

[Neil Parish]

Thank you for passing the motion to me, Minister. Don’t worry, once I get going, it will be fine.

I beg to move,

That this House has considered delivery of rural broadband.

Next time, Mr Betts, I will make sure that I know the new procedure. It is a great pleasure to work under your chairmanship. It is a delight to have the Minister here this afternoon, and I shall put some questions to him at the end, which I am sure he will be more than able to answer. I thank hon. Members for turning up this afternoon. We are all concerned not only about rural broadband but about the delivery of broadband throughout the country, which is very significant.

The internet is increasingly important to everyday lives, whether for online shopping, for staying in touch with friends or for all our rural businesses, such as farming and tourism, which are keen to have broadband. Despite a public subsidy of about £1.7 billion, too many consumers, businesses and individuals cannot access broadband. Theoretically, until we had to change the system, farmers were expected to deliver payments online, and next year they will have to, but if they do not have superfast broadband or a good internet connection that will be impossible.

BT owns a lot, if not all, of the infrastructure and is the largest retail provider using it. Ofcom is considering whether to propose separating the infrastructure division, Openreach, from the rest of BT, which would create more competition and mean that BT no longer had a conflict of interest in delivering the high-quality broadband that everyone deserves. I do not know whether this afternoon the Minister will want to be drawn on the question of what should happen to BT. An independent Openreach would improve the quality of service and increase infrastructure investment.

There are two elements to the delivery of superfast broadband in most constituencies: the publicly funded programme—in my constituency, Connecting Devon and Somerset—and the commercially funded roll-out of superfast broadband in larger towns and cities. We must remember, however, that Government and council money is all taxpayers’ money, and we want to see value for it. In earlier debates in the House, we have been very concerned not only about the pace of broadband roll-out but about whether it is being rolled out with value for money for our taxpayers.

For the Devon and Somerset roll-out, the first delivery contract was let to BT and is believed to be on time; it has been suggested that it is also within budget. The target refers to 90% coverage of the area by 2016, but that is where the problem lies in many respects. If roll-out across a constituency or a country is in percentages, people automatically roll out to the areas that are easiest to get to and, all the time, we will have to put public money in to get to those hardest-to-reach areas. I have yet to be convinced that we are getting the necessary value for money from many of the contracts.

If we let one contract get to 90% of the population and another to 95%, and if it is the same company rolling out the broadband, what stops the company from not delivering what it should have done under the first contract but delivering it under the second contract and saying, “Of course it is all too hard to reach. We need more money to reach the hardest-to-reach areas”? One of our problems in Devon and Somerset is that there has not been enough competition in letting the contracts. A contract was let to BT, then a further one was to be let to it again. There has not been enough competition, so there are not enough people out there with wireless connections or different types of technology to keep BT moving. BT has been slow at bringing in the new technologies.

Many Members present have constituencies with a hilly topography and many farms, villages and hamlets are stretched out and a long way from the cabinets and the fibre cable. In the end, there will have to be a system not only of fibre cables but of wireless and other technologies to deliver broadband.

--- Later in debate ---

[Neil Parish]

I thank my hon. Friend for that intervention and welcome her to Parliament. She is right. I do not know whether Cheshire is the same, but Devon and Somerset signed a confidentiality clause with BT in the first contract, so that has made it doubly hard. The situation has got better and in Devon and Somerset, websites have been set up and people know roughly where they are going to be. The people at BT argue that is a commercial matter, and if they say they are going to be in a certain place at a certain time and they do not arrive, they leave themselves open to a legal challenge. However, it is still very frustrating for people. I am a little concerned that BT is inclined to move faster when it thinks somebody else might move into the area. It is just a feeling of mine, but I think it is probably shared quite a lot in this Chamber. Perhaps we can ask the Minister about that: does he actually like the confidentiality clauses in these contracts, and would it be better if we did not have them? It would be interesting to see what he has to say about that.

In 2010, Ofcom put regulation in place to allow competing broadband providers access to Openreach national infrastructure and access to passive networks, so that their own fibre to the cabinet or fibre to the home superfast networks could be deployed. That has been helpful for non-BT providers such as Sky and TalkTalk. The majority of superfast investment comes from BT and Virgin Media, and both are investing in upgrading their existing networks. We need, all the time, to keep as much open access as we can.

I turn to Britain’s digital future. The UK has one of the most competitive broadband markets in the world, with lower prices than most other European countries. Once people actually get access to the internet and broadband, they get a very good deal, but it is about making sure that we can get people connected in the first place. The UK has an ambitious digital plan, which will help the economy and result in world-class connectivity, so we are going in the right direction—I thought I ought to put something in this speech to make sure that the Minister felt that I have listened to what he has said. This will help to decrease business costs as well as reduce the cost of public services and help our long-term economic growth. Indeed, it might even help our long-term economic plan, might it not? However, the current market structure is letting Britain down.

There are over 500 different telecom companies, the majority of which depend on Openreach. It is worth remembering that when other sectors were privatised, such as the electricity sector or the rail network, they were prevented from simultaneously owning the infrastructure and being a retail provider. Ensuring that Openreach was independent of BT would help to extend internet coverage, which, in turn, would help to support small local businesses. In addition, that would help to cut back on the red tape and ensure that the process of installing broadband across the country is much more transparent.

I have emails in my inbox from businesses that feel like they are being let down by the Government not getting broadband to them fast enough. I know that the Minister is working hard on that, but it is what people are concerned about. Over 200 businesses have been in touch to say that they do not have the internet connectivity that they need to be able to run their business. Indeed, 75% of Federation of Small Businesses members say that the internet is vital to their businesses. One particular business said that as a result of the internet, its sales increased by 40%, and 46% of members would like faster internet provision. It is extremely important that businesses have good internet speed and access so that they can promote themselves online. It is essential for tourism, shopping and market research.

In rural areas, Broadband Delivery UK intends to roll out superfast broadband to 95% of the UK by 2017, with universal access to broadband speeds of up to 2 megabits. The final 5% is primarily made up of rural areas, which is mostly what we have been talking about today. Although that is only 5% nationally, it probably means that in many of our constituencies, up to 50% of our areas will not be covered. Rural areas also have slower superfast broadband coverage. There are also related technical issues, as rural areas tend to be further away from the cabinets. That means that companies and the Government should be looking at more efficient and cost-effective solutions, which we have largely covered this afternoon. We appreciate that the Department for Culture, Media and Sport has announced a £10 million fund to pilot technologies such as satellites to address the problem, but we would like to see more speed due to the negative effect on businesses and constituents. I want to labour this point for a third time. We have not concentrated enough effort and resources, and certainly BT has not, on the different technologies. We will not by 2020, 2021 or 2022 get to the hardest-to-reach areas if we are not using the better and newer technologies to get to them now, because all these things take time. That is what worries us. We are very pleased for all those who have the broadband connection, but we are very worried about our constituents and businesses that do not have it.

Finally, I come to my questions for the Minister. Can he extend competition to keep the pressure on BT to deliver on its contracts more quickly and effectively? Can he persuade BT to use extra technologies, especially in the harder-to-reach areas, to ensure that BT is delivering on its contracts as promised? Will he encourage other companies to bid for contracts to deliver superfast broadband, especially in difficult to reach areas, so that there is local competition in the marketplace? Can businesses and individuals be given vouchers that would go some way towards paying for broadband, which in many cases individuals have to fund privately, out of their own pockets, instead of through the huge taxpayer subsidy that BT is already receiving? Will the Minister keep up the pressure on BT to ensure that it keeps its promises, as already too many people in rural areas do not have broadband and that is only adding to the problems of rural isolation?

[Mr Clive Betts (in the Chair)]

Six hon. Members have applied to speak. I shall restrict the Front Benchers to nine minutes, rather than the usual 10, to allow everyone else five minutes to speak. It is a five-minute time limit, including any interventions, because obviously we are restricted.