Broadband Universal Service Obligation

Drew Hendry Excerpts

Thursday 15th December 2016 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I congratulate the hon. Member for Boston and Skegness (Matt Warman) on securing this important and timely debate. I was struck by the speech made by the hon. Member for The Cotswolds (Geoffrey Clifton-Brown), who underlined some of the points that I want to make quite firmly about the position in Scotland, particularly rural Scotland. I think that some of the words of the right hon. Member for Wantage (Mr Vaizey)—he is no longer in his place—about connectivity, and particularly mobile connectivity, will ring somewhat hollow with a number of our constituents.

It is Christmas, or just about, so in the spirit of Christmas I would like to welcome the moves by the UK Government to provide improved digital infrastructure, but it is important to state that we do not believe that this goes nearly far enough. The USO and the Digital Economy Bill could and should do much more to provide the background for economic growth amid this time of deep Brexit uncertainty.

Our ambition in Scotland is for Scotland’s economy and our public services to have a digitally skilled and empowered workforce. The SNP Government are purposely ambitious in this area. The hon. Member for Ynys Môn (Albert Owen) talked about having a 100% commitment, and that is exactly what is happening in Scotland. Our 100% superfast broadband commitment far outstrips the UK Government’s plans, which are limited to the universal service obligation of just 10 megabits per second. Incidentally, the Government risk repeating a key mistake of the past, which is to deliver the minimum required for today’s needs when they should be delivering what will be needed tomorrow.

The SNP tabled innovative amendments to the Digital Economy Bill. We were concerned, as we continue to be, that the UK Government’s unwillingness to engage indicates a lack of genuine commitment to extending broadband coverage. Our ambition for Scotland’s economy and our public services requires a digitally skilled and empowered workforce. Digital connectivity is critical to opening up economic opportunity in every part of Scotland, and I know that that will be reflected in the other nations of the UK. A report by Deloitte for the Scottish Futures Trust in July made it clear that if Scotland became a world leader in digitalisation, GDP could increase by over £13 billion by 2030 and generate an additional 175,000 jobs in Scotland, while also improving health outcomes and helping to end the digital divide, particularly in rural communities.

To achieve that, we need to address the shortage in specialist digital skills that risks becoming a growth bottleneck. There is an immediate demand for women and men with strong specialist skills, and that sits side by side with the need to develop a broader pipeline over time. The Scottish Government are working with partners to meet the challenges set out in the 2014 digital skills investment plan. They are raising awareness, especially among girls and young women, with a curriculum that is relevant and responsive from school through to university, and continuing to create and highlight new pathways into these new and changing jobs.

As I have mentioned, the SNP tabled innovative amendments to the Digital Economy Bill, and we are concerned that they were not taken up. The Secretary of State could have introduced a broadband connection voucher scheme to allow the end user to access a broadband service other than that supplied by the provider of the universal service obligation under part 2 of the Communications Act 2003. That would have gone some way to addressing the issues raised by the hon. Member for Boston and Skegness. I think that that should still be considered, so I hope the Minister will look, even at this late stage, at how to accommodate it. Such a scheme would provide a replacement for the previous UK Government broadband connection voucher scheme, which ran from 2013 to 2015, that encouraged small and medium-sized enterprises to take up superfast broadband. It was a good idea, and it helped over 40,000 SMEs. The Minister could also have committed, as his predecessor did, to extending the rights of consumers with mobile coverage so that they have the same rights of service in contracts as those with fixed broadband, yet he did not do so.

Rural Scotland’s poor mobile coverage stems from Westminster having treated it as an afterthought for decades. Although I give a guarded welcome to the support for 5G and the trials of it, there is a lack of ambition on that as well. The widespread uptake of smartphones and tablets has led to a very large growth in the demand for mobile data services. For example, between 2011 and 2015, mobile data traffic in the UK increased by 710%. Analysys Mason forecasts that by 2030 levels of mobile data traffic before wi-fi offload could be more than 45 times greater than in 2014.

Rural Scotland’s mobile connectivity is still suffering and struggling because the licensing of the mobile spectrum has been used by the UK Government as a cash cow and a way of making money, rather than as critical infrastructure development that is essential for our country. In the UK, the 3G and 4G spectrum auctions raised billions for the Treasury, but other countries have sought to prioritise greater coverage as a first port of call. The 4G licence auction required 95% coverage for each nation within the UK, which contrasts poorly with Germany’s “outside in” approach to licence obligations. Like the UK, Germany required an overall 98% coverage as an EU member state, but it also needed 97% coverage in each of the federal states. The consumer magazine Which? has found that Scots have access to a 4G signal only 50.4% of the time. Scotland, Wales and south-west England are the regions with the lowest access to mobile data in general, with access less than 80% of the time, which is a shocking figure. As of December 2015, nearly half—48%—of Scotland’s landmass had no data coverage whatsoever.

Reliable and high-quality fixed and mobile broadband connections support growth in productivity, efficiency and labour force participation across the whole economy. That is why the SNP Scottish Government have made progressive pledges on expanding fixed-line broadband. Action taken by the Scottish Government means that we are on track to delivering fibre access to at least 95% of premises in Scotland by end of 2017. We are working with mobile operators to improve and increase 4G coverage across Scotland, and using the dualling of the A9 to put in 4G is helping us to move that on. By the end of 2017, all four mobile operators—EE, O2, Virgin and Three—will provide 95% of premises in Scotland with indoor 4G coverage. The Scottish Government have less control over mobile connectivity than fixed-line broadband, as the spectrum policy and other important levers remain reserved to Westminster.

To conclude, rural Scotland must not be an afterthought again. As we move on to 5G, the UK Government must prioritise rural areas as part of the 5G licence spectrum auction.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

We have two speakers to get in before half-past 4. If they could split the time, it would be very helpful.