Digital Economy Bill Debate

Full Debate: Read Full Debate

Lord Mendelsohn

Main Page: Lord Mendelsohn (Labour - Life peer)
1st reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017

(7 years, 9 months ago)

Lords Chamber
Read Full debate Digital Economy Act 2017 View all Digital Economy Act 2017 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 28 November 2016 - (28 Nov 2016)
Moved by
1: Clause 1, page 1, leave out lines 11 and 12 and insert—
“(2B) The universal service order shall say that broadband connections and services must be provided—(a) with speeds of 2 gigabits or more;(b) with fibre to the premises (FTTP) as a minimum standard; (c) with appropriate measures to ensure that internet speed levels are not affected by high contention ratios;(d) with appropriate measures to ensure service providers run low latency networks.”
Lord Mendelsohn Portrait Lord Mendelsohn (Lab)
- Hansard - -

My Lords, as well as moving Amendment 1, I shall speak to Amendments 9, 10 and 11. These amendments cover the nature of the universal service obligation and the setting of standards—issues relating to market structure and how best to roll it out are dealt with in group 5—so these focus particularly on those aspects. These are probing amendments that address whether, in passing such an important Bill that makes a further step in developing our digital economy, the measures contained are sufficient, and whether this legislation will provide leadership and adequately address our future needs. It is important that we remain ambitious and have a flexible policy and, now that we have an industrial strategy, have the mechanisms to meet it.

There is of course a strong case for a universal service obligation. A “universal service” is an economic, legal and business term used in regulated industries to provide a baseline of services to every resident. It establishes the availability of a quality service at just, reasonable and affordable rates, which should be available to all consumers. Universal services were widely adopted across Europe in the 1980s and 1990s, and there is a case to say not just why we should have one but why we have not had it. It is therefore welcome that the Bill establishes it. Across the EU, only Finland, Malta and Spain have provided for a minimum broadband speed in national law—Germany is on the way to it—but this Bill is an important step. That reflects the fact that communications, such as broadband and the like, have become a fourth utility that is crucial to modern life. Citizens face more and more encouragement to be online to access public services, commercial services or other things, and there are now penalties for those who cannot access, or are not adequately served by, broadband or who find it difficult to use.

The universal service obligation is a critical part of the Government’s strategy to ensure that the current model of broadband delivery does not risk ending up in a two-tier service, dividing the digital haves and have-nots and exacerbating the potential for holding back Britain’s regional economies. The Government are providing funding to support the rollout of fast broadband to those areas of the UK where commercial rollout has not been sufficiently attractive or where the market structure has not developed to incentivise it adequately. This is mostly, but not entirely, in rural areas. The broadband universal service obligation will act as a safety net, allowing those with poor connections the legal right to request a fast connection.

The Bill contains enabling powers for the USO to be specified in secondary legislation. The download speed will be specified in secondary legislation, and is expected to be 10 megabits per second. Amendment 1 would write that ambition on the face of the Bill, and it sets out the speed and nature of the delivery—fibre to the premises—and covers contention and latency issues.

Prior to getting into the meat of the amendments, I think that it is important to see broadband in the context of mobile. The universal service obligation should be on mobile as well, and we will come to that in later debates, but it is important to take note of it at this stage, because we are here following the market, not consumer behaviour. We are addressing much, although too little, of what is happening.

Ninety per cent of the UK adult population is online, which is about 48 million people. The share of adult users has held steady, suggesting that stubborn challenges remain to reach 100% use rates. Most room for growth lies in take-up and deeper usage of online services among the over-55s. With the growth of mobile, focus has shifted away from broadband, but the fixed broadband market is still slowly growing. Seventy-seven per cent of UK adult users connect to the internet via broadband at home, and this number has held steady. Regarding devices, laptops and smartphones, each of those boasted 38 million users; tablet ownership has been declining. Use of a desktop PC has been on a steady decline since March 2011, and this is forecast to continue over the next few years.

Mobile connectivity has become such an important part of our life that one of the central findings of the National Infrastructure Commission’s report was that,

“mobile connectivity has become a necessity. The market has driven great advances since the advent of the mobile phone but government must now play an active role to ensure that basic services are available wherever we live, work and travel, and our roads, railways and city centres must be made 5G ready as quickly as possible”.

Many in this Chamber will have digital services: many will connect via broadband; some will connect through 5G services; they are interrelated.

I turn to the issue of speed. The Government argued in the universal service obligation consultation early last year that 10 megabits per second was sufficient to enable,

“full participation in a digital society”.

Later, Ofcom was charged in its technical specification to model around that definition. It modelled 10 megabits per second—10+1 being the upload speed and 30+6 being a speed frequently mentioned by others.

Is 10 megabits per second really a sensible target? I would suggest that we look at the evidence supplied by Sean Williams, the chief strategy officer at BT Group, to the Committee in the other place. He stated that BT has,

“made clear our willingness to deliver 10 megabits to every premises in the country by the end of 2020 without any further public funding and without even really progressing the USO regulations”.—[Official Report, Commons, Digital Economy Bill Committee, 11/10/16; col. 5]

If it is that easy, is it a sensible target?

In its assessment on the technical specification, Ofcom made a very important point. Ofcom has published evidence showing,

“that a speed of 10Mbit/s is sufficient now to allow multiple users to simultaneously use the internet, including web browsing, video streaming, video calling and gaming”.

That would not be the opinion of my children, but that is another matter. It goes on to acknowledge that this minimum,

“may need to increase over time”.

Even if we took the argument that 10 megabits per second was sufficient at this stage, which I do not think is the case, it would not be a very sensible approach to start with.

What are our anticipated needs? Many representations have been made. I think the National Farmers’ Union made a very cogent argument as to the speeds it was looking at. It would need to establish, as a minimum, both upload and download of 30 megabits per second. Is that sufficient? European Union Governments are committed to providing this speed universally by 2020, and EU targets are now of 100 megabits per second by 2025. If the broadband USO is intended to be only a safety net, this means that there is currently nothing offered for the 5%, and they will have limited access to anything that is defined as superfast.

New York announced a plan that, by the end of 2018, there should be 100 megabits per second, and by the end of 2019 this should rise to 300 megabits per second. Included in the package to deliver this was an affordable broadband service to unserved, underserved and low-income residents. It is no accident that the list of top 10 countries does not include the UK but does include such luminaries as South Korea, Norway, Sweden, Hong Kong and the like. When it comes to an international comparison, looking at download speeds for fixed internet services, the UK currently resides in 23rd place. We may feel that we have achieved a huge amount, but we are only in 23rd place. If we aggregate download and upload speeds, looking for the average between the two, we drop another 15 places. That is hardly encouraging. I have to say that it is better than our mobile internet access, on which we are currently placed at 39.

A further point to make is about the nature of the digital economy. E-commerce underpins the UK digital economy. Much growth has come from online sales. Moving forward, we expect a lot of the drivers of e-commerce to be the additional interactive mechanisms —AI and other forms of activity—that require much greater speeds in order to encourage uptake. British brands enjoy great cross-border appeal among European and Asian shoppers. An important part of what we need to do, to give ourselves the infrastructure to be able to compete effectively, is to have the right broadband level.

However, this is not just about speed, and we do not just specify speed here. We go for a speed of 2 gigabits to be established by 2020. That is not an unrealistic objective. There are parts of the world servicing 10 gigabits already, so 2 gigabits is not an overly ambitious target, but it is not just about speed. There is the important issue of reliability and consistency. The noble Baroness, Lady Harding, made a good point in the Committee in the other place, when she said that,

“consumers and businesses would say that reliability and consistency are every bit as important as speed”.—[Official Report, Commons, Digital Economy Bill Committee, 11/10/16; col. 8.]

Indeed, for many people there has been a huge issue about the underinvestment in routers, which translate broadband speeds at a very low speed across the house, and among many international comparisons we have some of the worst performing routers.

Upload speed is also an important issue. We have no real specification for it, although it is as crucial as download speed.

--- Later in debate ---
With that rather detailed explanation—I apologise—I hope that noble Lords will feel able not to press their amendments.
Lord Mendelsohn Portrait Lord Mendelsohn
- Hansard - -

My Lords, I have a confession: I did not expect the Minister to concede on all these points. I have another confession. One has to see the universal service obligation in context. It is a mechanism that addresses a market failure—the inability to get broadband extended across the country and to deal with the problems that are so replete in its delivery. I understand the Minister’s point, although we might disagree about how to use the USO. The Government are using it to nudge towards something that is otherwise not possible, but in the discussion on these amendments we have raised broader issues about what that means. I do not agree with the Minister when he says that we have to follow the market rather than define it. Everything that the Government have done has defined it. If you define it with such a low base, it is a major problem.

The noble Lord, Lord Fox, said that this was a minimum, not a target. Our target is a minimum, so we agree on that. I take the point made by the noble Lord, Lord Mitchell, that we are talking about gigabits because they are the future, whereas megabits are the past. We have to address that material failure.

We are disappointed at what the Minister said about the BDUK report. It established goals that it said were dynamic; it said that it was pegging itself in comparison with other countries in the achievement of its goals for the UK. If you do not measure against a changing goal, you do not believe in the goals. That is the problem. It is not a value-for-money exercise. It is about whether you believe in the goals that you have set for that organisation. If you are not prepared to report on it, it means that you do not believe in it.

In the new clause proposed by Amendment 11, we accept that the Government are looking at what is in paragraph (b), but I would be grateful if the Minister would write and say how the Government are trying to achieve what is in paragraphs (a), (c) and (d).

To finish, let me say quickly that 10 megabits is totally inadequate. If you are trying to establish a small business using 10 megabits and have a variety of people using it, it does not work. That is a huge failure for our country. You have to establish a reasonable target. As one noble Lord said, 30 megabits is certainly affordable.

Even if you get 30 megabits into a house, most people are reliant on using wi-fi to distribute it; they do not use a cable connection. I defy anyone to establish that most of the population is using anything near a definition of superfast in this country. We have a massive problem with routers and where they go. The Government talk about numbers as if they are giving us a proper and defined future. When we sell a USO, we have to have some sense that what is delivered to the public is really worth while. As a mechanism to nudge it forward, it is probably insufficient. Having said that, I beg leave to withdraw my amendment.

Amendment 1 withdrawn.
--- Later in debate ---
Baroness Janke Portrait Baroness Janke (LD)
- Hansard - - - Excerpts

My Lords, Amendment 4 deals with the introduction of a social tariff. At Second Reading, Members felt very strongly about exclusion, particularly digital exclusion, and the amendment seeks to address the issue of affordability.

Many people at the moment do not have access to broadband, particularly in some of the more deprived communities of the country. I come from a city and I know that it is easier there to access broadband than it is in rural areas. However, even where there is physical access, large sections of the population will not have broadband because the costs are unaffordable. I speak particularly of families on low incomes, children who need access to broadband for schoolwork and learning opportunities, unemployed people who are seeking jobs, people with limited mobility who have great needs and older people who may find the levels they are being asked to pay unaffordable.

It will become increasingly impossible to live in the modern world without having access to broadband, whether it is for the purposes of banking, claiming benefits, applying for a passport or any of the other things that we expect to do online. It is therefore important for the Government to consider during the passage of the Bill how they will address the issue of affordability.

The amendment seeks to introduce a social tariff. BT has a social tariff for telephones and the Government may wish to look at that. I hope that we can address this issue because, whatever the universal service obligation in regard to quality, accessibility and the extension of broadband to some of our less wealthy communities and vulnerable people is important. There is an opportunity to address this in the Bill and I beg to move.

Lord Mendelsohn Portrait Lord Mendelsohn
- Hansard - -

Very briefly, we on these Benches wish to associate ourselves with Amendment 4. It is an extremely good amendment which raises the important issue of ensuring that broadband is accessible to the unserved and underserved, and others.

The noble Baroness, Lady Janke, made a good point about online access for schoolchildren, particularly in communities where there are great challenges in teaching. You can already hear the reports from many schools about the divide between those who can and those who cannot afford access, with the expanding level of online teaching and resources. Schools are also administering other things online.

We have an amendment to remove the reasonable cost threshold because any extra cost associated with delivery of the USO should not be borne by the users of CSPs. It is important to make sure that the cost of ensuring delivery has been adequately taken care of in the Government’s considerations and that the companies provided to do this do not seek to transfer the costs to consumers. We must make sure that it as affordable as it can be and that it extends to the widest possible number.

--- Later in debate ---
Lord Foster of Bath Portrait Lord Foster of Bath (LD)
- Hansard - - - Excerpts

My Lords, as my noble friend Lord Fox has said, I will very briefly address one element of the report, though I support the principle and all other aspects of the proposed list of things to be covered in that report. However, I draw the House’s attention to subsections (2)(g) and (h). Paragraph (g) talks about the take-up of superfast broadband as a proportion of connected premises and (h) about the measures taken by various bodies to improve that take-up.

I fully share the Government’s desire to create a digital Britain, with all the benefits that it can bring, including the online delivery of our public services. However, all the discussions I have had about broadband since joining the House have predominantly been about its speed and making it available. We know the figures—they are fairly clear: about 89% of households can currently access high-speed broadband, but we also know that only 31% of households have actually taken up the offer and 22% remain entirely offline. Furthermore, last year’s Ofcom study revealed that some 10% of households make it clear that they have no intention whatever of getting on to the internet at any speed. We also know that it is those with limited means—perhaps older and less well-off people—who make up the bulk of the 30% of the population who currently have either very limited or no access to the internet.

Bearing those figures in mind, and while I welcome all the energy, enthusiasm, debate and deliberation going on in the House—and by the Government, Ofcom and others—to improve the availability of high-speed broadband, at the same time as addressing the supply side we need to do far more work to address the demand side as well. If we are to reap the full benefits of digital Britain—to bridge the digital divide and reduce the unit cost of the installation of high-speed broadband—we need a concentrated and co-ordinated demand-side management programme. I have argued before that such a programme would address issues such as: skills training, which we will come on to later in the Bill; marketing the benefits of broadband; addressing the cost barriers—we have already had a brief debate on that with the amendment of my noble friend Lady Janke in relation to social tariffs; and of course developing quality, technology and content.

I readily acknowledge, as I have in the past, that there is good work going on in this regard by BT itself, the BBC, Barclays and many others. Local councils deserve a great deal of credit for the work they are doing, and the Do It Digital campaign is trying to help businesses get online. The Government have played their part with changes to the IT curriculum and aspired improvements, at least, to digital skills.

However, given that the take-up rate is so low, far more needs to be done, from the skills agenda to having a digital TV switchover-style campaign, advertising the benefits of getting online. It needs co-ordination. I believe that BDUK would be best placed to do that—its business voucher scheme was a good demand-driver—and the Minister might comment on where we are with the next iteration of that in his response. I toyed with tabling an amendment adding to the purposes of BDUK to cover responsibility for that but, for the time being, so that we have an opportunity to hear the Minister’s reaction and find out a bit more about what the Government plan in demand-management measures, I thought it more sensible to leave it included as one of the issues to be reported under the excellent proposal of my noble friend.

Lord Mendelsohn Portrait Lord Mendelsohn
- Hansard - -

My Lords, I express our support for the amendment so ably produced by the noble Lord, Lord Fox. It is entirely consistent with Amendment 21, to which we shall come in the next group, and it provides a useful window on performance. In considering what the full report should look at, I just suggest that it would be useful if it considered upload speeds, outages and user experience. We talk far too often about what speeds are delivered to the home and not enough about the user experience; it would be very useful to include that in such a report.

Lord Ashton of Hyde Portrait Lord Ashton of Hyde
- Hansard - - - Excerpts

My Lords, Amendment 8 also relates to reviewing the delivery of broadband policy. We have spent some time discussing broadband policy and I do not wish to repeat myself by setting out the Government’s digital agenda again. We do not disagree with the urgency, and the noble Lord is right to mention it.

The amendment would require Ofcom to produce an annual report on progress in implementing the universal service obligation. We should remind ourselves that that is the point of this part. The amendment lists a number of areas that the report should cover, not all of which relate to the broadband USO. As noted previously, I agree that it will be crucial to monitor progress of this important consumer measure, but I think that it is reasonable that the reporting requirements should be decided once the design of the USO has been finalised, not before. This will be done following the consultation on the detailed design of the USO.

Some of the areas listed are already reported on by Ofcom. For example Ofcom’s Connected Nations report, which is published annually, already provides details of superfast broadband coverage and take-up, including the percentage of premises nationally connected via fibre. The length of time taken to repair lines is also monitored and reported on by Ofcom under its market review process. Ofcom also conducts mystery shopping exercises to check compliance with the broadband speed code of practice. Under Ofcom’s voluntary code of practice on broadband speeds, broadband providers agree to give clear information on broadband speeds to consumers when they consider or buy a home broadband service and provide redress when speed performance is low. Earlier, I mentioned the Advertising Standards Authority’s review.

The noble Lord, Lord Foster, mentioned take-up, as he did on Second Reading. We agree that that is an important issue. It is interesting that Ofcom’s report assumes an 80% take-up, which we will have to think about. We agree that it is important for the per-unit cost to reduce as it is rolled out. This will be one thing we can take into consideration in the consultation. He also mentioned the broadband voucher scheme. As I said earlier, the full fibre rollout consultation included the option of a further full fibre business voucher scheme alongside other options. We will publish the findings of the consultation and the next steps alongside the findings of the business broadband review.

Therefore, although we sympathise with the spirit of the amendment, we do not think it is the correct thing to do at the moment, before the decisions have been made, and I hope that the noble Lord will feel able to withdraw it.

--- Later in debate ---
Moved by
12: After Clause 1, insert the following new Clause—
“Universal service broadband obligation: fair and competitive market
The Secretary of State must ensure that rollout of universal service broadband obligations is delivered on a fair and competitive basis.”
Lord Mendelsohn Portrait Lord Mendelsohn
- Hansard - -

My Lords, I shall speak also to Amendments 13, 20 and 21. These are probing amendments: three are “why nots?” and one is a rather extended “why?”. Amendment 12 follows on nicely from the final contribution of the noble, Lord Fox, to the previous debate. It attempts to address the competitive dynamic of the market—what it is there to achieve—and whether competition works in the broadest interest. We contend that the structure of the market has impeded private investment.

In 2005, responsibility for the broadband network was given to BT, which already owned the copper landline network—that seemed like a good idea to achieve a certain series of goals. Those goals were achieved but, unfortunately, time has moved on and there are other requirements.

In those terms, BT has done a good job—there are limits to what it can do—and we have much to thank it for. I should declare an interest here: I am a very small shareholder in BT—since last week, an even smaller one—and I do not believe in BT bashing. We create frameworks and incentives, and it is not a company’s fault for following them. Markets have changed. BT receives a lot of criticism for its move into content, but that is adjustment to the market. Frankly, it can find people who are prepared to buy a service to watch the Bundesliga, and I have used it to watch Borussia Mönchengladbach, but the Government are finding it difficult to balance the needs of a national broadband infrastructure with BT’s corporate requirements. The market just does not work well and there are few incentives for new entrants and little scope for small players. Bluntly, the Government’s reliance on BT’s free cash flow moves it from having a real policy to being reliant on prayer.

The communications market revenue growth has accelerated from about 5% to about 5.5%, and this is driven by two particular factors. The main one is price rises which have been unsurprisingly in that 5% to 5.5% range, and there has been a movement to try to compete on the basis of ever-faster connections, or the marketing of ever-faster connections, even if they are not met.

--- Later in debate ---
Lord Ashton of Hyde Portrait Lord Ashton of Hyde
- Hansard - - - Excerpts

I am grateful to all noble Lords who have contributed. Amendment 12 would introduce a new clause to require that the rollout of the broadband USO be delivered on a fair and competitive basis. Under the EU universal service directive, the USO is delivered by one or more designated universal service providers. Designation of the provider or providers is a matter for Ofcom under Section 66 of the Communications Act 2003. The Act enables Ofcom to set out the procedure for designation in regulations, and Section 66(7) requires that this procedure must be efficient, objective and transparent, and not involve or give rise to undue discrimination against any person. Existing legislation therefore already provides for a fair and open process for the designation of a universal service provider, which meets the concerns of this amendment.

As noble Lords may be aware, in April last year Ofcom published a call for inputs, seeking views from industry and consumers on the design of the broadband USO. The majority of respondents shared Ofcom’s preference for a transparent and competitive designation process for the universal service provider. At the same time, however, few industry stakeholders expressed a desire to be designated as the provider of the broadband USO. In light of this, Ofcom’s USO technical advice, published on 16 December, explained that it considered that a more restricted process, whereby all providers are considered and an appropriate provider chosen, subject to a consultation process, was more likely than a competitive process which was unlikely to bring forward any interested providers. It also indicated that the most efficient outcome may be for BT and KCOM to be designated as universal service providers. This will be a matter for Ofcom to consider fully, once decisions are made on the detailed design of the broadband USO. I should, however, stress that the universal service provider is only able to recover from a USO fund in respect of an unfair net cost burden, as calculated by Ofcom, so the method of designation has no bearing on whether the designated provider is incentivised to deliver the USO in the most efficient way.

Amendment 13 would require the designated universal service providers to roll out in rural areas before deploying their networks in urban ones. I do not think this would be appropriate. There are, I know, more rural consumers struggling with slow broadband speeds, but I do not think that the needs of urban consumers are any different from those of rural ones in the same position. As such, they should be treated the same. The USO is being introduced specifically to target those areas where commercial providers have not provided, and are unlikely to provide, connectivity, be they rural or urban areas, and to confront social exclusion wherever it is located.

The noble Lord, Lord Mendelsohn, talked about the role of smaller suppliers in the BDUK superfast programme. Of course, smaller suppliers can successfully deliver infrastructure into communities in the hardest-to-reach parts of the UK. There are now 11 smaller suppliers contracted to deliver superfast broadband projects through BDUK’s programme. The noble Lord also asked why we do not introduce an outside-in rollout, like Germany. We agree that has been very successful but unfortunately it is not comparable to what is proposed under the USO. In Germany there is no USO, but a publicly funded rollout programme. It worked by giving the commercial sector the opportunity to roll out in more commercially viable urban areas. The USO is intended to target areas that are not commercially viable.

Amendment 20—I pay tribute to the noble Lord, Lord Mendelsohn, for his measured remarks about BT, which is a bit of a whipping boy here—would give the Secretary of State a power to direct Ofcom to begin the process of legally separating the Openreach division of BT. We do not think this power is necessary, since on 29 November last year Ofcom announced its intention to do that very thing, as the noble Lord, Lord Fox, mentioned. In answer to the question from my noble friend Lord Arbuthnot, I am afraid I do not know the details about the way it has been operating. I will check that and get back to him in writing. According to Ofcom, the only thing that can stop the process is if BT agrees a voluntary arrangement that meets all of the regulator’s requirements.

Furthermore, through its comprehensive digital communications review, which reported in February 2016, Ofcom examined closely the whole of the UK telecommunications market. It concluded that changes to the governance of Openreach could benefit competition and consumers, and consulted last summer on the form that these changes should take. Last November it announced its decision that legal separation was the way to go. Therefore, Ofcom has already carried out most of the actions set out in paragraph (2) of this amendment. If the Secretary of State were to use the power granted by this amendment to direct Ofcom in the manner described, the result would be repetition and delay due to the requirements of the clause.

Because Ofcom is an independent regulator—I can say to my noble friend Lady Byford that it is Ofcom that holds it to account—the Government do not wish to take a power to direct how it should carry out its duties. However, I can assure noble Lords that the Government are listening to Ofcom in case there is anything we can legitimately do to ensure that the changes the regulator has proposed can be carried out expeditiously. I will leave that there for the time being.

Amendment 21 would require local authorities to take steps to ensure that alternative suppliers are in place to meet the requirements of the broadband USO where they identify areas which do not receive this. It would also give local authorities the option of publishing data on broadband speeds in their area and the extent to which the broadband USO is being met.

If I have understood the intention, the first part of this new clause seems unnecessary, as the process for designating the universal service provider is intended to ensure that no operator would be excluded from being designated. It would be for operators themselves, either on a national or regional basis, to put themselves forward to be considered for designation by Ofcom. This is not something that local authorities would have a role in. If, on the other hand, the intention of the new clause is that local authorities should take a role in procuring alternative suppliers to deliver broadband to the same standard required by the USO, this would fall outside the USO measures in the Bill. Local authorities can, of course, carry out procurements to provide areas with superfast broadband through the UK’s national broadband scheme, and areas covered in this way will not need intervention under the USO.

The second part of the new clause is also unnecessary as local authorities already have the option to publish data about broadband speeds in their area without the need for this legislative provision. They would, in any case, rely on Ofcom data. Ofcom has extensive data-gathering powers and reports to the Government on the availability, take-up and use of broadband in its annual Connected Nations reports. The reports include data at local authority level. In future, once the USO has been introduced, the Connected Nations report will also provide a means of reporting on the broadband USO and whether it is effectively meeting the needs of consumers and businesses. Given those explanations, I hope the noble Lord will withdraw his amendment.

Lord Mendelsohn Portrait Lord Mendelsohn
- Hansard - -

I thank the Minister for his very full answer in relation to Amendment 12, but it was to a completely different question from the one I had posed, which was about having an objective, efficient and transparent process in establishing providers. His answer concerned delivering on obligations. He should take from the Committee the important message that there is great concern about the nature of the competitive market.

Turning to Amendment 13 and the outside-in approach taken in Germany, I was under the impression that, given the amount of money we have put behind this, we have a similar publicly funded rollout programme. Germany has gone for a different approach—its USO occurs later in the process—and will meet a much higher standard over time. This is one of our big competitive pressures in Europe. Such an approach still has merit because it is the one occasion when you can get the private sector to factor in reasonable infrastructure spend, which it is not doing at the moment.

I thank the Minister for saying that I have been fair-minded concerning Openreach. However, I am sorely tempted to lose that tag. He made the crucial point that if there is a voluntary agreement to meet the requirement, it can stave it off. As he will have seen in the extensive commentary on this issue over the past two weeks, there is great concern that that is exactly its intention and it will delay the process. That is why we have suggested that much swifter action be taken.

I confess that with Amendment 21, we shoehorned in something completely different that does not and cannot really fit within the USO. However, it does provide for effective support for the local and regional economies. We should look at this issue. This is a broader policy arrangement to try to solve some of the problems that we are running headlong into, because the structure of the market just will not service them in the long term and will not maintain our competitiveness. Frankly, when Chattanooga is choo-chooing along at such an incredible pace and we are falling behind, something needs to be done, and that is a bigger policy. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.