Broadband

David Heath Excerpts

Wednesday 4th March 2015 Westminster Hall

[Neil Parish]

I think that the argument has gone even as far as state aid rules and whether Brussels was involving itself in the letting of contracts and whether being able to extend the existing contract with BT and BDUK was the best way forward. Those types of argument have been used. I am not against BT or what BDUK is doing, but I do feel that not enough competition has been brought into the system to keep BT and BDUK up to the mark.

[Mr David Heath (Somerton and Frome) (LD)]

Does the hon. Gentleman agree that the issue in Devon and Somerset now is not so much the delivery of the original contract, which is carrying on at its own pace—we are impatient, but it is happening—but the large areas in our constituencies that will not be covered by that contract and that need to catch up with the rest of the counties? I think that that will not be done through big contracts. It will be done through small, individual contracts, with new technologies such as wi-fi, rather than this approach, which I think will fail many people in rural areas.

[Neil Parish]

I thank the hon. Gentleman for his intervention. He may well be right. One problem that we have with these large contracts—the situation is getting a little better—is that people do not actually know where the broadband will be delivered. If there is an alternative system—satellite, wireless or whatever—people do not necessarily know whether to put private funds into it, because they do not know whether BDUK will actually deliver it to their area. This is the frustrating part of what we are doing. We have all worked hard across the parties to get money. The MPs in Devon and Somerset all signed the letters to get the money and we delivered the money and have the contract, yet individual residents are not getting the broadband. Naturally, they do not like all these figures being bandied about for how much is being delivered if they do not have broadband themselves.

I understand that Connecting Devon and Somerset chose the route that it did because of the lack of bids and the concern over the state aid deadline, but I believe that more could have been done to open the market. At national level, there should have been more work to prevent one company from gaining such a monopoly on publically funded broadband roll-out as BT has achieved. Given the impact of flooding and sea damage on the west country’s transport infrastructure, the provision of high-quality rural broadband has never been more important to the resilience of the south-west and its communities and businesses.

I have a number of questions that I am sure the Minister will be keen to address. Does he believe that BT is providing value for money? I think that that is a very important question for the simple reason that I want to see everyone get broadband. I accept that some areas are very difficult to get to, but surely that is what these contracts are let for. We have to make absolutely sure that we are getting value for money.

Will the Government re-examine the universal service commitment of 2 megabits? What work is the Minister’s Department doing to ensure that survey information is made publically available and that BT is not hamstringing local authorities with spurious confidentiality agreements? What work are the Government doing to pilot new technology to reach the hardest-to-reach areas? Finally, will the Minister examine ways of making BT much more accountable?

--- Later in debate ---

[Tessa Munt]

I thank the Minister for that clarification. If he has information about where that will happen, that leads me to my next question. Every time I have asked where the not spots are, I have been given all kinds of maps showing different colours. Most of my constituency is under consideration, or somebody is looking at the plumbing, or whatever. It seems unlikely that anyone will be able to make any headway in those areas. If the Minister is that sure, however, I am delighted.

I would be very grateful to have that information from him so that people who have no coverage can make alternative arrangements. I have heard reports, from my part of the country and others, of parish councils attempting to find out what is going on, and arranging for their own parishes to go online through some alternative to BT. Just when they have been about to hit the button and go for it, BT has suddenly come back to them and said, “Actually, we are going to do your bit after all.” That is not very competitive. If BT is not going to be up front, it is not fair for it to come back to communities that are trying to make their own arrangements and say, “Don’t do that, because we are coming in anyway.” That is slightly anti-competitive practice, and it does not look good, even if it is the truth.

The Department for Environment, Food and Rural Affairs and various other parts of Government, such as the Rural Payments Agency, have moved to digital. However, according to the figures that we have been given by the Country Land and Business Association, more than 10% of the countryside is without access to any broadband, and 12% has no digital footprint whatsoever. The trouble is that our suppliers expect farm businesses to be fully interactive online. Even though the basic infrastructure is not in place and Government-funded schemes are not delivering to remote and difficult-to-connect communities, they still have to use the various basic internet systems. Farmers find it difficult to innovate and to use new farming technology and software, which has to be downloaded from the internet. They also find it difficult to comply with other Government regulations by, for example, submitting VAT returns, getting vehicles taxed and processing animal tagging.

In my constituency, accessing the internet is also vital for jobseeker’s allowance claimants. Those who are looking for work, for whatever reason, have to show that they have applied for every possible job opportunity online. If they do not have internet access, it is absolutely impossible to meet the criteria, and their benefits may be stopped. Some of my constituents have to travel some distance to use the internet. They have to go to Bridgwater or to Wells, and there is little public transport. For people who are challenged financially and have little money because they have no job, but who are trying to find themselves work, it is incredibly difficult to compete and get the jobs that they need and want.

[Mr Heath]

Is not much of the problem caused by the hugely deceptive nature of percentages? We talk about a large percentage being covered without realising that in Somerset and the surrounding area, that means the fleshpots of Taunton and Exeter, and probably places such as Tiverton and Honiton. That relatively small percentage of people covers a large area of my constituency and that of my hon. Friend, and they are the people who do not get broadband and do not get mobile phone coverage worth having. In fact, they do not get anything, and it is time that they were properly served.

[Tessa Munt]

I tend to agree. Rather than looking at percentages, we should look at people. Back in the 1980s—I can remember all of this—we had British Rail trying to move trains from A to B and forgetting that its job was to move passengers from A to B. Exactly the same lack of focus on people has led us to where we are with broadband.

When my children were in senior school, they found the internet essential because they had to access their homework online. When they were at college, they had to send all their submissions online to their tutors, and they have to do exactly the same thing now that they are at university. It is difficult for someone who has no broadband and who lives some distance from the library, if they cannot drive or do not have a car and there are no buses. How the hell is anybody meant to be able to do these things?

I have a wonderful constituent who is 94 years old, who moved into Cheddar and found herself waiting weeks and weeks for some sort of connection. She used Skype, Twitter and Facebook to keep in contact with members of her family, who were all over the world. We must remember that in order to keep older members of the community living in their own homes, it is absolutely essential they can access services such as having their heavy shopping brought in from the supermarket by ordering online. They can still pop out to the shops every day and do the small items of shopping. Using the internet in such a way will help to keep them in their own homes.

Many of the businesses in my area are tourism-based, and if they do not have a reliable online connection and cannot use broadband at the right speed, they do not have a competitive edge. It is also difficult to buy, sell and communicate if the connection drops out all the time. Without a decent broadband connection, life is so much harder.

I wrote to the Competition and Markets Authority asking it to look into BT’s apparent refusal to join an open bidding process to increase high-speed fibre broadband access in Somerset. There is slight confusion over this, but it looks as though BT has held back information that might have enabled other organisations to join the bidding process. By saying that that information is commercially sensitive, it has prevented anybody from being involved in tendering for the phase 2 superfast extension programme.

--- Later in debate ---

[Mr Vaizey]

I understand the point that my hon. Friend makes. Time is pressing, but I will answer her question now. We were clear about 90% coverage. People can question whether that target was ambitious enough, but when the programme was going well enough, we found more money—the Treasury gave us an additional £250 million—to go to 95%.

I stress that that was not us moving or revising the target. We said, “Phase 1 is going well. We think we can go further. Here is £250 million and we think we can go to 95%, again by 2017.” To answer the question from the hon. Member for Hartlepool, yes, some of those contracts extend beyond 2017. I used to be a lawyer. Thankfully, I am no longer, but, if he has ever met a lawyer, he will know that if they could write into a contract a completion date in 2117, they would do so to give themselves enough wiggle room. However, the end of the contract does not signify when the project is likely to end.

Of course we want to get to 100%, and all the advice we received said that getting to that last 5% could cost £2 billion. Those were, to put it bluntly, back of a fag packet calculations—they were by sophisticated people and on sophisticated fag packets, but that is what they were—so the previous Secretary of State, my Friend the right hon. Member for Basingstoke (Maria Miller), who deserves a lot of credit for the work she did across a range of issues, found £10 million from the Treasury for some pilot schemes, which are now well under way. Some of them are delivering superfast broadband and we are auditing them at the moment.

My hon. Friend the Member for Truro and Falmouth (Sarah Newton) is quite right that satellite is quickly emerging as one of the key solutions for the last 5%. We now want to do an analysis of what that is likely to cost, go to the Treasury with an evaluation, and think how best that can be delivered. That will probably involve some of the smaller providers. That is the plan and hopefully by 2018-19 we can be close to 100% superfast broadband access.

My hon. Friend the Member for Tiverton and Honiton said that he wants the pace to be picked up. We have passed the 2 million homes mark under the programme and we are adding 40,000 homes a week—50,000 a week in some instances. However, this is an engineering project and it cannot be delivered overnight.

I want to talk about competition. We had an open competition: we put in place a state aid approved framework contract and anyone could have bid for the contracts. At the beginning, a consortium led by Fujitsu did indeed bid against BT. However, there are constraints when bidding for such contracts. To take Connecting Devon and Somerset, for example, the aim is to try to connect 360,000 homes, but there are not many players in that space, much as I would wish there to be. If a company takes money from the taxpayer—I think it was the hon. Member for Somerton and Frome who asked who owned the assets—there will be open access, so the TalkTalks of this world will provide their retail services on such networks, built partly by the taxpayer and partly by BT. That is open access. That is why, for example, a player such as Virgin Media, which some might think has the scale to compete against BT, did not want to play in this space, because it does not want to run an open-access network. I again give credit to the last Government for the structural separation of Openreach from BT. Openreach is an open platform to which others are allowed access, at prices that are regulated by Ofcom—

[Mr Heath]

Can I bring the Minister back to his “fag packet”, because one of his problems is that he has raised expectations? In Somerset, we may be a bit rough and ready; we are certainly very rural. However, we do not have big mountains, we are only under water part of the year and it was entirely predictable that the rotten old copper cables that ran three and a half miles from my house to an outhouse in Upton Noble were not going to be sufficient, so I do not understand why that was not factored in originally. Why was the contract not let on the basis of delivering fibre to those communities, rather than on the basis of some notional figure, which has failed to be met?

[Mr Vaizey]

I really fail to understand the point that the hon. Gentleman is trying to make, and I will not invite him to make it again or we could be here all night. In his constituency, 26,000 homes will get coverage under phase 1 of the programme, and nearly 2,500 more homes will get it under phase 2, so we are talking about 28,500 homes in his constituency that will get coverage.

The programme is run by the local authority. To make a blunt point, we are seeking bang for our taxpayer buck. To pluck a figure from the air, if it will cost £50,000 to connect a village of 20 people and one of 200 people, which group will be chosen? That is potentially a political decision as well. One might take a view that connecting those 20 people is better, in the sense that they are at the end of the queue, so let us bring them forward. However, that is something that we also left to local authorities, because we wanted them to partner this programme. It was not for us in the centre of Whitehall to decide between village A and village B.