Digital Economy Bill

Lord Stevenson of Balmacara Excerpts

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

Moved by

[Lord Stevenson of Balmacara]

6: Clause 1, page 2, line 2, after “services” insert “and mobile network coverage”

[Lord Stevenson of Balmacara (Lab)]

My Lords, I start by drawing attention to the National Infrastructure Commission report that came out recently, which I am sure the Minister is well aware of, in particular to its references to the future of communications and mobile networks. This was central to the request by the Government for a review, so that the commission could come back with some recommendations which the Government might build into future plans. The report starts by saying that,

“the UK lacks the level of coverage … to offer … mobile services ubiquitously. In rural areas 3% of the population do not have any coverage outside their homes”,

which it calls “complete not-spots”, and that,

“25% do not have coverage offered by all the main mobile networks (partial not-spots). Coverage on our road networks is poor even for voice coverage … 17% of A and B roads are in complete not-spots and an additional 42% have only partial coverage”.

The Committee will probably have to read Hansard carefully afterwards to get exactly what I am trying to say on the not and have-not spots. However, the picture is pretty poor.

The commission’s report goes on to say:

“The UK performs poorly in comparison to other countries”.


We do not seem to have an overall plan for what to do. It also says that,

“government has agreed with operators that they should deliver 90% geographic coverage for voice and text by 2017”,

but that,

“it is not clear that this will meet consumer service expectations”—

a point which has already been made in earlier debate. It continues:

“As it stands, gaps in current 4G networks mean that around 20% of urban premises and almost 80% of rural premises are in a not-spot for 4G coverage”,


which is surely unacceptable. It then comes to the point that bears on the amendment we have tabled in this group:

“The next generation of mobile connectivity will need to deliver the right type of networks, in the right places, for the services that people and business need. This means that 5G networks cannot be thought of in isolation but must be considered as part of a wider ecosystem of mobile connectivity. Delivering the connectivity we require for the future must start by ensuring that we have the networks we need for today—this will not only provide a basic level of service to consumers … but … the backbone of the network infrastructure we need for the new services of the future”.


These points are relevant to Amendment 6. I think that we are agreed that a USO will have some value although we are not that agreed on what it will be and how much it will bite—we might be able to make some progress on that. If we have a USO, Amendment 6 addresses whether it is just for the provision of wi-fi and wire-to-premises services or will include the additional services that will probably be necessary to achieve full coverage.

Everybody hopes that the USO will deliver 100% coverage. As the report from the National Infrastructure Commission makes clear, we would not be able to reach that coverage without some element of mobile telephony. Therefore, while we shall be regulating for the wires and the fibre to take the signal by a conventional route, we shall be stuck with unmet need. We shall not be covering the last 5% or 10% of people who will probably need supplementary provision. Indeed, the Minister himself said that the only way that he could satisfy his children’s need for proper access to the internet was to provide microwave technology in addition. Therefore if the USO is to be effective, it will need to cover forms of technology other than simply communication down wires or through fibre.

Amendment 6 simply suggests that the Government should take a step forward along the lines set out by the National Infrastructure Commission. They should add in the mobile coverage that would be required to complete what would be the first widely acceptable USO at whatever level it is meant to be. That is necessary if we are to make the progress set out in that report.

Amendment 19 concerns the vexed question of roaming. A number of issues seem to arise whenever anybody picks up a contract for a mobile phone and tries to use it. First, if in the shop you ask whether you will be able to use a phone throughout the United Kingdom, a promise will almost certainly be made that will not be honoured in the detail. It is quite clear to anyone who does any travelling that service from the various network providers varies considerably. I think that the Government will argue that this is a good thing because only by having competition between the mobile network operators will one get the maximum coverage sought. However, since it patently does not achieve that, one has to ask whether this is the right way forward.

From time to time the suggestion is made that even if you could get the coverage that you wanted from the network and contract to which you signed up, it would not be sufficient. This is because there will always be a point at which the income to be generated from additional coverage will be less than the investment in new masts and equipment. Therefore there will always be not-spots, even with mobile and not just internet connections. As the National Infrastructure Commission said, voice coverage will be patchy and not be fully efficient unless we can do something to make it more possible to receive any signal, not just the signal from the contracted operator. It is going to be mixed—if we are to reach 100% we will need to have more than the current incentive for services to include that.

This amendment proposes a national roaming provision at certain points. Without this we will not see the coverage that the National Infrastructure Commission wishes, which common sense dictates and which usage will demand. Consumer pressure may well be the final straw on this point. We will need to make sure that there is a possibility of reaching out to whichever mast is nearer and whichever services are appropriate to needs. Roaming may be the answer. I beg to move.

[Lord Gordon of Strathblane]

My Lords, my Amendment 17 is along similar lines. Perhaps because of my comments at Second Reading, I have had various meetings with mobile phone operators. They take me to task for contrasting their performance with my experience of broadcasting where for 50 years ITV and the BBC have been sharing masts. They correctly point out that broadcasters can differentiate their product by content, whereas they cannot. Their business model is based entirely on one provider owning one mast and providing that signal to its subscribers alone. In fairness, it is not the ideal way to build infrastructure. For water, the equivalent would be three water mains running into the average house and three sewage pipes taking waste away. It is a pretty silly way to organise things, but it is the way they have been organised and—as everyone says nowadays with a degree of resignation about quite a lot of subjects—we are where we are.

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[Lord Ashton of Hyde]

An amendment on that issue may be considered later today. That, however, will be a little taster for later. I have, therefore, come to the end of my explanations and I hope that, with those reassuring words, the noble Lord will withdraw the amendment for the moment.

[Lord Stevenson of Balmacara]

That is not at all the impression the noble Lord has given. Again, we have seen a lack of ambition to solve some of the long-standing problems. The noble Baroness, Lady Byford, was right to draw attention to what happens when you go abroad: you get a completely different experience—you are regularly connected to a service that you have become used to and there are no questions about which mast to point at. Wherever you are you will get service. Why we cannot get that here, I do not understand.

On this issue, however, we will always come up against the fact that if we are to get a 5G service across the whole of the United Kingdom the current system will not work. The directive may provide convenient help in propping up the Government’s arguments at the moment but that will not be available in a couple of years’ time when 5G begins to roll out seriously. We will come back to this issue. If we are to get to more than 92% coverage—the sort of ambition in the Government’s own paper, Connected Future—we cannot stick with the current model, which clearly does not work. In the meantime, I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

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Moved by

[Lord Stevenson of Balmacara]

14: After Clause 2, insert the following new Clause—
“Bill limits for mobile phone contracts
(1) A telecommunications service provider supplying a contract relating to a handheld mobile telephone must, at the time of entering into such a contract, allow the end-user the opportunity to place a financial cap on the monthly bill under that contract.(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—(a) requested the monthly cap be put in place and agreed the amount of that cap, or(b) decided, with the decision recorded on a durable medium, not to put a monthly cap in place.(3) An end-user may, after the start of the contracted service—(a) contact the service provider to require a cap to be put in place and agree the amount of that cap, or (b) require a cap to be removed, with the requirement recorded on a durable medium.(4) The end-user should bear no cost for the supply of any service above the cap if the provider has—(a) failed to impose a cap agreed under subsection (2)(a) or (3)(a); or(b) removed the cap without the end-user’s express consent, provided on a durable medium as required under subsection (2)(b) or (3)(b).”

[Lord Stevenson of Balmacara]

My Lords, as we reach the end of this first part of the Bill we have a bit of a conglomeration of amendments in one group. I think we will need to just go through them slowly to get the sense of them.

Amendment 14 is also in the name of the noble Lord, Lord Foster, and I am grateful to him for his support. It tries to deal with an issue that we probably all agree in this Committee is one of the most complicated areas of domestic expenditure—trying to work out what you owe for your mobile phone. I have never understood the tariffs. I certainly do not understand the various little odds and ends to opt in and opt out of, and I find it hard to get my mind round which bits are prepaid and which are costed at a rate that I do not recognise. Nevertheless, the bill comes in regularly and has to be paid. However, for some people this can be a source of worry and, as with other universal provisions, there may be some danger of vulnerable customers getting into difficulty. We therefore thought it might be interesting to suggest that the mobile operators should be encouraged, either voluntarily or if necessary through some form of statutory provision, to set caps or work on a system under which customers could set caps—more correctly—so that if expenditure was getting out of control on their mobile phone they were not being taken for a ride, even if it was for a relatively short period. Therefore, the idea of a financial cap, which is not uncommon in other areas of consumer expenditure, occurs. The suggestion in the amendment, which I hope the Minister will find of interest, is that it might be a way to make sure that there is a more secure arrangement for this important part of our everyday lives.

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[Baroness Buscombe]

My Lords, I am sorry if the noble Lord finds it extraordinary. However, I think that he has made a reasonable request and I will make sure that we write to him in detail, giving a full reply.

Amendments 16 and 18 seek to make additions to Clause 3 to ensure that compensation is paid within a reasonable timescale and that, for mobile phone services, compensation is payable where the provider fails to meet a specified standard or obligation. Also, one of those standards must be satisfactory mobile coverage.

The drafting of the clause already allows for Ofcom to consider timescales for compensation, as well as what service standards are within scope. In the spring of this year Ofcom plans to publish a full consultation setting out how automatic compensation could work. Thus, we do not see the need for these amendments.

Amendment 22 seeks to establish a code of practice on business broadband speeds. In January 2016, Ofcom published a voluntary code of practice on business broadband speeds, and it came into force in September 2016. The code gives businesses clearer, more accurate and transparent information on broadband speeds before they sign up to a contract. Signatories to the code also commit to manage any problems that businesses have with broadband speed effectivity and to allow customers to exit the contract at any point if speeds fall below a minimum guaranteed level. Ofcom will continue to work with the industry to ensure full transparency. With such a code already in existence, we see no need for there to be a power for the Secretary of State to prepare one.

Amendment 233 would amend the Consumer Rights Act 2015. I am grateful for the response of the noble Lord, Lord Clement-Jones, to this amendment, as I have to hand the transcript of the debate on that legislation—it makes quite enjoyable reading—when he referenced the consequences of an amendment which is the same as the one before us tonight. He said that,

“the consequences of this amendment could be quite unforeseen and extremely contrary to the interests of the strong and vibrant software industry that we have in this country”.—[Official Report, 19/11/14; col. 507.]

We entirely agree with the noble Lord that things have not changed that much, and they certainly have not changed in that regard. The rights set out in the Consumer Rights Act were designed to achieve a workable balance to reflect consumers’ reasonable expectations while not imposing unnecessary and potentially damaging requirements on our vibrant, growing and technically innovative digital content suppliers. We believe that this amendment would undermine those rights.

When formulating the Consumer Rights Act, we concluded that providing for a short-term right to reject was not necessary in the context of digital content. Unlike physical goods, digital content can on the whole be fixed rapidly and with little effort on the part of the consumer. Consumers accept that it is the nature of digital content that it may be released with minor errors and incompatibilities which come to light in use and which will be fixed to ensure that the product is satisfactory. A short-term right to reject digital content and impose strict limits on the number of repairs and replacements would not be practical in this context. In the digital environment, a fault in one copy of digital content may be replicated in all copies, or the fault may not be the result of an action by the trader at all. That is why a repair is a more equitable solution in the first instance than a full refund.

Many digital content producers are micro-businesses and start-ups, and we need to maintain an environment in which they can flourish and provide innovative products, while ensuring appropriate protections. Enabling rejection as an immediate remedy could cause the industry to be more conservative in its product offerings, reducing our competitiveness and chilling innovation, to the detriment of both business and consumers.

As we know, the Act has been in force since October 2015 and the Government have received no evidence or representations to the effect that it is not working as intended. With that further explanation, I hope that the noble Lord will agree to withdraw his amendment.

[Lord Stevenson of Balmacara]

I thank the noble Lord, Lord Foster, for joining me on Amendment 14 and I welcome the contribution from the noble Lord, Lord Clement-Jones, with whom we can agree on one thing and disagree on another. I am sure that that will continue—he is a contrary sort of chap and it is sometimes difficult to work out where he is coming from.

I like the phrase “bill shock”—I had not come across it before. It is an issue that might be dealt with in the forthcoming Green Paper and therefore I accept that at this stage we need not progress further on that amendment. However, I should like to reflect on my experience of trying to deal with accounts from my provider of mobile telephony. It is complicated by the fact that I also, stupidly, pay my children’s bills. I should not do that because, if I can never work out what their bills are, I certainly cannot work out my bills, and the combination is almost impossible.

The only way that you can interrogate your bill from that particular provider, whose name begins with a “V”, is by going on to the website and logging in. That is fair enough, but you cannot access your account until the provider sends you a text message on your mobile phone with a number that you have to enter in. That methodology is now becoming common among the banks. However, it does not work in a not-spot, so I cannot reach my account. I cannot interrogate it, I cannot set caps and I cannot do all the things that the noble Baroness talked about in her full and very interesting response. Therefore, there is an issue there with some of the technology that is still being used. I do not think that it is anti-competitive or anti-consumer but it borders on the “difficult to use”. I think that there is an issue there that we might want to come back to, although a Green Paper may well be the right way forward.

If we could have a letter on gainer provider-led switching, that would be very helpful. This is an area where I do not think there is any doubt about where we are trying to get to, but the pace seems glacial and I do not understand what the barriers are.

On the two points on payment, I accept that a paper offering a consultation on that would be useful. If I am correct about the timescale, it seems a little unfortunate that it will appear later than the completion stage of the Bill. The Minister mentioned the spring, but if she could give us some detail in writing about when it is likely to be available, that will be helpful.

With regard to the voluntary code of practice, we come back to the point that we raised on Amendment 1 regarding what the USO will be if it does not have teeth. In some senses, an aspiration is fine and a floor is also fine, but if the code is to be used to make real progress in this area, we have to try to make sure that the ISPs that try to operate it find that it contains something that they have to deliver on. I will look carefully at the Minister’s response and we may come back to that point.

Finally, I turn to my Amendment 233 on digital content. The debates are obviously very familiar. Indeed, I think that the Minister may have been present at one or two of the previous ones and therefore what we say will ring even more loudly in her mind. The noble Lord, Lord Clement-Jones, was quick to pick up the main point, but time is moving on. So much more material is now downloaded and not supplied in hard copy, and at some point we will have to look at this again. The more the Minister talks about a strong and vibrant software industry, the more that speaks to me of customers being put at the bottom of the priority list, and I do not think that that is right. It is difficult to operate in a digital environment without the proper digital legislation. I am not sure that we know yet what that is and I accept that we may need more time to go through it. I signal that this is something that we may have to come back to at some point but, in the interim, I beg leave to withdraw the amendment.

Amendment 14 withdrawn.