Digital Economy Bill

Debate between Lord Maxton and Lord Stevenson of Balmacara

Report: 1st sitting: House of Lords
Wednesday 22nd February 2017 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, we return to an issue which we discussed in Committee. At that time my proposed amendment received support from the noble Lord, Lord Fox, for which I was grateful, and I know that he again supports the amendment today. The reason for returning to this is that I sense that we did not prosecute the amendment to the full extent possible at the time—that may have been our fault, but it was quite late in the evening—and, on reflection, there may be an issue here that needs a little more care and concern from Ministers before we leave it.

To go back over the issue, we are talking about the development of spectrum, which is a valuable national resource that—although there always seems to be more of it—is finite. Therefore, as a national resource, it is important that the Government have a firm grasp on how it should be distributed and the prices that should be paid for it. Currently, it is for Ofcom to introduce the necessary regulatory framework, which it does by considering how and on what basis additional spectrum can be made available and on what basis it can be released to operators who wish to use it. That has taken the form of auctions, which have been of varying types over the years—some have been spectacularly successful and some less so—and have been done under different rules.

The nature of the Government’s engagement with this is through Ofcom, and the amendment in no way aims to make a change to that basic structure. However, there is a question about whether we have reached the point where the Government should pay more attention to the issues concerned in this area than they have in the past. Why is this? It is because we have gone from a situation of having reasonably equitable spectrum holdings to having quite a significant imbalance in spectrum. This is partly because of the growth in one or two of the companies concerned. Some of that has been organic, but one of the main reasons has been the allowing of the merger between BT and EE, which has created a group that has been described as a,

“behemoth in the communications market”.

Therefore, we are not now in a situation where there are four companies competing for customers using broadly the same rates and amounts of spectrum; we are talking about only three companies—and possibly a fourth—and the problem is that two of those are very large indeed compared to the others. For example, BT/EE, the combined behemoth, has the largest proportion of all available spectrum, with 39%, while Vodafone has a significant but smaller 27%, Three has just 14% and O2 has only 13% of available mobile spectrum. In responding to this amendment, could the Minister reflect on whether this situation represents an optimum position for the market and, if it does not, whether the powers that he has are appropriate for how it goes forward?

However, it gets more complicated. There are, as one might expect, different sizes of companies and the individual spectrum bands are also of different value. It is therefore important not to look only at the overall figures but to be concerned with how the bandwidths that have the highest capacity—and therefore the best ability to offer innovative services to consumers—are going to be dealt with.

We have the prospect of a further auction this autumn, for which Ofcom is currently consulting on what will be the rules for auctioning off a total of 190 megahertz of high-capacity spectrum in the 2.3 gigahertz and the 3.4 gigahertz bands, which are particularly suited to higher-speed mobile broadband services—a topic that we have just been discussing. Clearly, for the future of UK plc and for the future of businesses and individuals in this country, how the spectrum is made available, how much of it is made available and on which bandwidths will be a crucial issue that we must get a handle on.

In this amendment we are proposing that more attention should be paid than in the past through a cap of, say, 30% on the individual holdings that any one company may have of the usable mobile phone spectrum. This is a figure which has been broadly discussed, and which Ofcom has been using in some of its discussions and debates around this issue, so it would not represent a very different approach.

However, before we go to the auction for this high-value additional spectrum, which will be crucial for 5G and further services going forward, there must be an evaluation carried out by the Government, not by Ofcom. This should look at: the impact on competition in the mobile telephony market of the current distribution of spectrum; the impact on consumers, who are often neglected, both in financial and coverage terms; the efficiency of the current spectrum usage; and the impact of preventing any one licence holder from owning more than 30% as a broad-brush approach. If this review is to be effective, it must be done quickly and brought to the House. I beg to move.

[Lord Maxton]

My Lords, I shall be brief. I have in my pocket a mobile phone owned by Virgin Media. Virgin Media uses the EE spectrum. As far as I know, there is no financial connection between Virgin Media and EE, but Virgin uses the EE network. Could the Minister explain that to me?

--- Later in debate ---

[Lord Maxton]

My Lords, I too welcome the amendment; it is well worth while, but it is worth making a point I made earlier. Of course, there are now books that are written entirely as e-books and not published at all in printed form; they are published for the Kindle or similar devices. Does this amendment cover these as well? Does it give the author of such books exactly the same rights as the author of a book published in printed form?

Of course, e-books are now lent not just by public libraries. Amazon has its own public service—well, a service anyway; it is not public; you pay for it—whereby it can lend you a book that you can read on your Kindle for a limited time and that is available only as an e-book and not in printed or any other form. Do the same rights extend to authors whose books are lent in this form? Are these the same rights you would get through a public library?

My last point is also one I have asked about before. Public libraries in Scotland, of course, come under the local authorities, and local authorities in Scotland come under the Scottish Parliament. Is this a devolved matter or will it now be covered by the UK as a whole?

[Lord Stevenson of Balmacara]

My Lords, we welcome the Government’s tabling their amendment on this issue, as promised. In Committee, the Minister said she wanted to work with the sector groups involved to support a strong book sector that helps to promote opportunities for the public to read and learn, and she intended to table her own proposals for the necessary legislative changes as soon as possible. We sometimes hear that and then have to wait ages, but this time she has been able to get the Whitehall system to work to her agenda, and I congratulate her on that.