Digital Economy Bill

Lord Aberdare Excerpts

1st reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Lords Chamber

[Lord Aberdare (CB)]

My Lords, as I indicated at Second Reading, I very much support the proposal for a broadband universal service obligation. The amendments in this group raise a number of questions in my mind about how the USO will work. Like several other noble Lords who have spoken, I am not convinced that all of these can or should be left to Ofcom, or to enabling powers, to resolve. For example, is the USO intended by government to be a safety net for users for whom no other service is available? Or is it seen as part of a more ambitious and aspirational strategy aimed at ensuring that the UK is, and remains, a global leader in the quality of its broadband availability? If the latter, Amendment 1 would look attractive, setting the sorts of targets that I believe we should really be aiming for. But even if the Government are leaning more towards a safety net approach, as seems to be the case, I would be inclined to support Amendment 2, which includes not just superfast download speeds but provisions for such other key features as upload speeds, response times, information rates and data caps. As the Local Government Association points out in its briefing, and as other noble Lords have mentioned, upload speeds are at least as important to businesses, especially smaller businesses, not least in rural areas.

Ofcom itself, in its technical advice to the Government, looks at three possible USO scenarios, as laid out by the noble Lord, Lord Mendelsohn. I share the view that the USO should offer more than the basic, standard service. While Amendment 1 might be seen as representing an ideal—a very worthy ideal—Amendment 2 sets out a perhaps more realistically achievable target, which I would support. I also fully support the proposition at the end of Amendment 2 that whatever initial specifications are set should be reviewed annually and increased in line with growing need, as well as the requirement in Amendment 8, tabled by the noble Lord, Lord Fox, for an annual report on the implementation of the USO. Indeed, I would also support the review of Broadband Delivery UK, proposed in Amendment 9, and the duty proposed in Amendment 11 to ensure that the USO is, in fact, achieving its aims.

Who will the USO fall upon, and who will be designated as universal service providers? Will it be just BT and KCOM in Hull—at least initially, as envisaged by Ofcom—or is it expected that others will be designated; and if so, who might these be, how will they obtain USP status and on what terms?

Finally in this group, I also welcome Amendment 10, which is designed to ensure that the needs of SMEs are addressed as a priority under the USO. I look forward to hearing from the Minister how the proposed USO will help to take the UK further up the global league table from the position described by the noble Lord, Lord Mendelsohn, which I think was 23rd going on 38th.

[Lord Gordon of Strathblane (Lab)]

My Lords, I support Amendment 1, and indeed the other amendments in this group, without in any way taking away from the credit due to the Government for introducing the USO. I think we are universally in approval of what the Government have done, and they deserve great credit for it. However, as I mentioned at Second Reading, this is a rather unambitious target. That of itself is not worrying—after all, it can be left to Ofcom to increase the target—except that it will alter the way that we go about things. We need a step change in how we go about things. Ten megabits can be achieved by wringing more miracles out of copper wire, and we would change nothing. This is not even in tune with the Government’s own thinking. Again, the Government deserve great credit for what they announced in the Financial Statement about new funding to look at what we can do with 5G. 5G could revolutionise our industries and the Government have put money behind that. The department would find itself pushing at an open door if it asked the Treasury for more funding at this point.

My last point in this brief intervention is simply to say that, having looked at the broadband advice to the Government and the three scenarios, I was, frankly, pleasantly surprised by how little option 3 costs. If that is all it costs, why not go for it and get the Treasury to cough up?

--- Later in debate ---

[Lord Aberdare (CB)]

My Lords, I support Amendments 12 and 13. I have no mobile coverage at all at my home in Wales and would have no broadband worthy of the name if it were not for a small local supplier offering a line of sight wireless service and willing to do so in competition with BT, although “competition” is hardly the word I would use to describe it.

I believe that a more competitive marketplace is essential to increase the speed and quality of broadband rollout, including, or especially for the final few per cent which I hope means household rather than geographic coverage, and who of course tend to be in rural areas. Similarly, my experience in Wales leads me to believe that to achieve a genuinely competitive and open market, it may well be necessary to bring about some sort of separation of Openreach from BT. I hope that the Minister will be able to tell us how the Government plan to promote a more competitive marketplace as a driver of better services across the nation.

[Lord Arbuthnot of Edrom]

My Lords, these are very important amendments. There is a concern that BT has tended to invest just enough in a particular area to make it uneconomic for competitors to come in and provide services there. This may just be a natural complaint by people who have been beaten fair and square in the marketplace, because BT is a very large and effective company which is, in many respects, a national champion. However, if it is a canard, it is a persistent one. I hope the Minister will be able to say something to reassure the Committee, either that it is untrue or that something is going to be done about it.

--- Later in debate ---

[Baroness Byford]

My Lords, I have two amendments in this group. Amendment 25 suggests leaving out paragraph 3(h) of Schedule 1:

“to interfere with or obstruct a means of access to or from the land (whether or not any electronic communications apparatus is on, under or over the land)”.

As I declared earlier, at the moment we have no such masts on any of our land.

This is a probing amendment intended to ascertain what is meant here. How can it be reasonable, necessary or practicable to interfere with or obstruct access to land—any land as it currently stands, as is stated in the preamble—even when there is no apparatus on, under or over that land? Will this, as the noble Lord suggested, include children’s play areas? Will private citizens return home to find they cannot access their property because there is an unmoving Openreach van across their drive? Will farm animals be denied welfare services because they cannot be removed from their fields? Will emergency services, including air ambulances, be barred from using land where access has been obstructed? Will any obstruction be time limited to, for example, not more than half an hour? Indeed, have the Government given thought to this particular issue?

Amendment 39 deals with the height and clearance requirements of overhead lines. I am not sure why Amendment 40 has been removed from this group but I will speak to it at the same time, if I may. These are probing amendments, though the alternative heights they suggest are not to be regarded as frivolous. Three metres is only 10 feet. Modern agricultural machinery is large and growing larger. Three metres above the ground is likely to mean that combining a cereal crop will be difficult, more costly than strictly necessary and probably more dangerous. Have the Government consulted, for example, the NFU, the Health and Safety Executive and the CLA; and if so, what were their comments?

Two metres is only 6.5 feet. Wires hung in mid-air tend to stretch over time. It is likely that 2 metres will become, in places, 1.6 or 1.7 metres—less than the height of the average man. How will roof repairs, chimney repointing and the installation of solar panels be carried out safely with a wire at head height? Ladders and other apparatus will have to be positioned and lifted over the roof ridge. Who will carry the can and bear the cost if a wire set at 2 metres has lengthened and is damaged? Who will be held responsible if a wire moves suddenly and sharply in a gust of wind and hurts or kills somebody working on the roof? I believe that the height envisaged in this section of the code is from a time when agricultural machinery was much smaller and we did not, of course, have the whole question of electronic communications as we do now. As I said, this is a probing amendment. However, if we are not careful, this section of the code has the possibility to cause difficulty in the future.

[Lord Aberdare]

My Lords, the issues relating to valuation seem to span this and the next group. In a sense, we have not yet examined the horse to which Amendment 23 is the cart. However, I will follow the noble Lord, Lord Grantchester, and the noble Baroness, Lady Byford, in covering the area as a whole.

The no-scheme valuation methodology proposed in the Bill is designed to promote greater investment in the development of much-needed communications infrastructure. In doing so, it needs to maintain a fair and workable balance between the range of different interests involved, including that of landowners, infrastructure providers, network operators and, of course, users. Briefings from the CLA, representing landowners, and from APWireless, a land aggregator, argue that this is a market that already works well and has done so for 30 years. They express serious concern that the proposed change could in fact reduce the availability of land for wireless infrastructure development, thereby slowing the rollout of extra capacity. They point out that the Law Commission report on the ECC some years ago, which the noble Lord mentioned, warned that changes along the lines proposed in the Bill would,

“generate an extremely difficult transition, and a consequent overload of litigation; more importantly, the market in sites benefits the economy—not only small businesses in the countryside but also some larger concerns”.

A subsequent report by Nordicity made similar statements.

I am not aware of any evidence that so-called ransom rents are a significant issue under the existing regime. Independent infrastructure providers, such as VVIG and Arqiva, see it as essential that these new powers are used responsibly and only as a measure of last resort. They stress the importance of seeking voluntary agreements first, to retain the support of the landowner community. The undertakings given in the Minister’s helpful letter to Peers after Second Reading, relating to wholesale infrastructure providers and to the treatment of alternative structures such as water towers and pylons, are encouraging in this respect.

A possible effect of the proposed change to a no-scheme valuation may be to generate windfall savings for large mobile network operators whose costs of acquiring access to land will fall. For that reason I support Amendment 23, which seeks to ensure that such savings are at least reinvested in increasing coverage, rather than just disappearing into the coffers of the MNOs. However, I remain concerned that the change, particularly if applied to existing agreements or their renewal, could introduce uncertainty, risk and tension between ECC beneficiaries and landlords—and of course landlord co-operation and good will is key to a sustainable, efficient and well-maintained network. It also seems to represent a fundamental change in the rules surrounding private ownership in this country.

I hope the Minister will be able to explain why this proposed new valuation methodology was introduced into the Bill so apparently unexpectedly, as the noble Lord, Lord Grantchester, said, and contrary to what had previously seemed to be the Government’s intention. What provisions does the Minister have in mind to ensure that any savings made on rents are indeed reinvested in communications infrastructure? I apologise if I have jumped the gun in talking about some of the amendments in the next group.

Digital Economy Bill

Lord Aberdare Excerpts

2nd reading (Hansard): House of Lords
Tuesday 13th December 2016 Lords Chamber

[Lord Aberdare (CB)]

My Lords, this Christmas-tree Bill offers some appealing packages and I hope that when the Minister comes to unwrap them for us they do not prove disappointing, and that some of those that are missing may have been restored by then. I strongly support many of the aims of the Bill, notably wider access to broadband, at increased speeds; better and faster mobile network coverage; expansion of digital public services; and improvement of digital skills. I also applaud the Government’s intention to tackle online pornography and to clarify the regulatory role of Ofcom.

I have several questions and concerns about the specifics of how these issues are addressed in the Bill. In its report of February last year, the Digital Skills Committee, of which I was a member, highlighted two main requirements for enhancing the UK’s productivity and competitiveness in the increasingly digital world economy. The first was having the right physical infrastructure in place in terms of both broadband and mobile capability, and the Bill represents a welcome step forward in addressing both these areas. The second was the need to enhance the digital skills of people across the UK, from basic users to advanced creators of digital systems. I share the disappointment of other noble Lords that the Bill gives not much more than a nod in this direction through the new Clause 87.

Part 1 of the Bill seeks to improve access to digital services through the proposed 10 megabit universal service obligation, with a provision for compensation when performance standards are not met. Of course 10 megabytes would be a great deal better, but I think we are talking about 10 megabits. This should provide a useful safety net or floor to ensure that no one is deprived of a minimum level of broadband access, but its focus should be quite specifically on those areas—increasingly few nowadays but none the less significant—where broadband services even of this low speed are not currently available and on the final few per cent of households which lack any broadband connectivity. The longer-term goal should be to provide significantly higher capacity, so there should be regular reviews of the USO, and the minimum speed will need to be increased over time and should cover upload speeds as well as download speeds, as the noble Lord, Lord Fox, suggested.

To keep ahead of our competitors we need to be thinking in terms of ultrafast and even gigabit broadband services, at 100 megabit-plus speeds. The announcements in the Autumn Statement of £1 billion of funding for improved broadband services, rightly based on fibre to the premises, and for piloting mobile networks capable of meeting 5G standards, may be as or more significant in achieving the levels of connectivity and speed we need than the USO provisions in this Bill. I was shocked to discover that only something like 2% of premises in the UK are served by fibre, which is way behind most of the rest of western Europe. The noble Lord, Lord Grade, who mentioned poor mobile phone coverage, may be disappointed to hear that the RAC apparently thinks that we have 4,400 miles of road without mobile phone coverage.

Part 1 also includes a provision to make it easier for users to switch providers. The greatest difficulties in achieving this, as I know from personal experience at my home in London, arise from the fact that broadband and telephony services are often sold as part of a package or bundle of services also including television. I understand that fewer users currently switch from pay TV suppliers, such as Sky, than from telecoms suppliers, such as BT: only 2% against an overall average of 6%, which is itself half the rate for electricity or gas consumers, although the bundled services they receive are similar. Switching should be equally straightforward for everyone, whether moving from a provider licensed as a telecoms or a pay TV operator, and I would expect to see this principle firmly embodied in the Bill. I also point out that from the perspective of my other home in Wales, which was mentioned by the noble Lord, Lord Wigley, the ability to switch providers at all is something of an irrelevance, since I count myself extremely lucky that I have one supplier of decent broadband services.

Part 2 has the key aim of promoting greater investment in digital infrastructure. The challenge is to provide the right environment to promote investment in new digital infrastructure, particularly for mobile network connectivity, while treating fairly all the different interests involved: landowners, on whose property equipment is sited; mobile network operators with extensive existing hard infrastructure, notably BT; alternative network providers, often smaller-scale companies offering local connectivity services such as the one that provides my broadband service in Wales; and wholesale infrastructure providers—WIPs—which provide electronic infrastructure on a shared commercial basis. These last, notably Arqiva and Wireless Infrastructure Group, provide about a third of the UK’s digital infrastructure, considerably less than the equivalent in the USA, where the figure is more than 80%, and in most other countries. None the less, they provide more than half of all rural infrastructure sites. Typically their facilities are shared by three or four separate networks, providing higher capacity and greater efficiency than structures belonging to individual mobile network operators, so perhaps the Minister will indicate how the Bill will promote this kind of shared approach.

The overall approach of the Bill, it seems to me, should be to promote competition to drive investment in better, faster, higher-capacity digital infrastructure, and to do this by recognising the provision of digital connectivity as equivalent to a utility service. The proposed new Electronic Communications Code takes some important steps towards realising this concept. It makes clear that the definition of land should exclude electronic communications apparatus that may be installed on it and seeks to give infrastructure suppliers easier access to land in order to install their equipment. During later stages of the Bill, I shall be looking to see whether the balance seems right between the interests of established suppliers—notably BT, with its already large portfolio of wayleaves for its own equipment—and those of other providers of digital infrastructure, particularly those offering shared facilities with higher specifications.

All I will say about Part 5 on digital government is to welcome the aim of making government services digital by default and to emphasise the importance of building and maintaining public trust in this process, so as to avoid any repeat of the NHS care.data debacle. There are many potential benefits of sharing government data, and the noble Lord, Lord Storey, mentioned one in the form of auto-registration for school meals. But there are evident concerns about the disclosure of civil registration information in Clause 39, the possible disclosure of identifiable healthcare information, the need for appropriate controls on government data sharing and compliance with the EU’s general data protection regulation, which comes into effect next year.

In Part 6, I am worried about the proposed new approach for appeals against Ofcom decisions in Clause 75. This involves moving from a standard of review based on the merits of such decisions to a judicial review standard, which is likely to significantly limit the grounds on which decisions can be challenged. In a field as technically complex and fast-moving as this, it seems to make little sense to restrict the scope of appeals in this way, and I am struck by the range of organisations that have expressed concern about this move, including not just BT and Virgin but Sky, Vodafone, industry associations such as techUK and the CBI, and other more specialist players in the digital arena such as CityFibre. I find their arguments that the proposed change would not in fact benefit consumers, nor even be likely to reduce the time and cost involved in appeals—which seems to be the Government’s main reason for introducing this clause—persuasive. This is an area that the Government should look at carefully again before moving to put Ofcom in a privileged position of immunity from merits-based appeals, which I understand would be effectively unique among regulatory bodies.

Finally, I am pleased that Clause 87 has been added to the Bill to address the issue of basic digital skills training. I hope the Government will explain how the extra funding needed for the adult education budget to deliver this will be provided—as the noble Baroness, Lady Janke, mentioned—and will ensure that the training is available right across the UK. This training should be clearly linked to the technical education digital pathway recommended by the Sainsbury skills review and thereby overseen by the proposed new Institute for Apprenticeships and Technical Education. I also agree strongly with the noble Lord, Lord Foster, and others that there is a need to promote demand and take-up for digital services, not just the supply side. I would like to see a lot more in this area of skills training.

I look forward to hearing more from the Minister about how the laudable aims of the Bill will be delivered and some of the gaps highlighted today filled. The Bill should be a key element in enhancing UK competitiveness in the post-Brexit global marketplace, building on the many strengths we already have in the digital sphere but which will need to be constantly improved and developed if we are not to be overtaken by others. I trust it will emerge from the process of scrutiny in this House even better attuned to that aim.

Digital Economy Bill

Lord Aberdare Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Lord Aberdare (CB)]

My Lords, as I indicated at Second Reading, I am extremely uncomfortable with the proposed shift from a merits-based to a judicial review standard of appeal from Ofcom decisions, and I very much support these amendments moved by the noble Lord, Lord Clement-Jones. Indeed, he has made the case so thoroughly and strongly that I can be extremely brief.

It is inappropriate that in a market as innovative and fast moving—indeed, fast changing—as telecommunications, it should not be possible to test decisions made by the regulator not just on their legality but on their correctness and fairness in terms of the merits of the issues raised. As the noble Lord mentioned, I have received briefings both from Ofcom and from a group representing the bulk of the telecoms industry and industry more widely, through the CBI, as well as from the technological sector through techUK.

I remain slightly baffled at the apparent contradictions between the arguments cited by the two sides. I would encourage the Minister to look very carefully at these arguments to establish as clearly as possible where the evidence points—perhaps one could describe it as the merits of the case—before proceeding towards allowing only judicial review-based appeals.

I will not go through the detailed arguments because there is not a single one on my list that the noble Lord did not cover better that I could hope to do. However, from what I have heard, I am far from convinced that the proposed narrowing of the appeals standard will benefit either consumers or investors—and we need a great deal of investment in this sector—let alone the wider national interest in fostering a fair, competitive and vigorous telecommunications marketplace. I am therefore happy to support either or both of the proposed amendments. I hope the Minister will have another careful look at this issue and consider introducing amendments of his own, designed to ensure that important issues relating to the merits of Ofcom reviews can be properly challenged.

[Lord Lester of Herne Hill (LD)]

My Lords, I support these amendments, which seem a very good compromise. They ensure fairness and balance and avoid the very narrow approach of judicial review regardless of merit in any circumstances, without going into the substance of matters in a way that would turn the review into a whole general appeal. For those reasons, I am glad that the noble and learned Lord, Lord Keen, is taking part in this debate. He will know a great deal about the subject from his private practice as well as his public practice. This is a good compromise. It may be that the Government can come up with something better, but this is certainly better than Clause 75 as it stands.

Digital Economy Bill

Lord Aberdare Excerpts

Report: 2nd sitting (Hansard - continued): House of Lords
Monday 20th March 2017 Lords Chamber

[Lord Aberdare (CB)]

My Lords, I should like to speak briefly in support of Amendment 29A. Removing merit-based appeals, as Clause 80 would do, seems both unfair to appellants in cases where Ofcom may make decisions that are materially wrong even if they reflect due process, as will inevitably occur on occasion, and undesirable, potentially harming consumers and deterring investment. This seems precisely the opposite of what is needed in such an important, strategic, high-value, fast-changing, innovative and growth-oriented sector.

I will not try to restate the arguments made in Committee, or those made by the noble Lord, Lord Foster. I just make two points in response to the helpful letter from the noble Lord, Lord Ashton, on 14 March. The letter describes the merits appeal as,

“akin to a retaking of the whole decision”,

but an appeal will normally be made only on specific grounds where an appellant believes there is a clear error. So the amendment would not require whole decisions to be re-examined, only those aspects specified in the notice of appeal.

Secondly, I accept that the judicial review process is,

“perfectly able to meet the current EU law requirement that the merits of the case are duly taken into account”

if the judges so decide in a given case. Rather than leaving it to judicial discretion, however, why not spell out in the Bill that they should be taken into account even after they are no longer banned by the EU framework directive, thereby future-proofing it for the post-Brexit world?

Ofcom decisions are of crucial importance for both consumers and telecom providers, and indeed for investors. As we have heard, the change to a judicial review standard is strongly opposed by the great majority of industry participants, from the major incumbents such as BT and Virgin to much smaller, newer market entrants, such as CityFibre, along with the CBI and techUK, the latter representing 900 tech sector companies, the majority of them SMEs.

I claim no specific expertise on judicial review, and I am no great fan of BT, but it is important that the relatively modest requirement set out in Amendment 29A should be incorporated into the Bill.

[Lord Stevenson of Balmacara (Lab)]

Briefly, the ground has been well covered by the noble Lords, Lord Foster and Lord Aberdare, and I have little to add. Three things strike me. I recalled in Committee that this was one of the areas where we had received the most external notifications and correspondence. It is still something that we need to take carefully. As has just been said, it is surprising that almost the entirety of the industry affected by the judgments of Ofcom have joined up to make the case.

Following on from both speeches, what is required is a statement from the noble and learned Lord. I am sure he is straining at the leash to give us all another compromise solution that will do the trick. He is shaking his head; maybe there are other things he has to cover as well. However, the situation seems to hinge on whether Article 4 of the EU directive applies sufficiently well after this Bill goes through, as before. Yet, as has been mentioned, there will be an opportunity, presumably in the great repeal Bill, to cover exactly this point. So what is the hurry?