Release of Spectrum Band

Louise Haigh Excerpts

Tuesday 15th November 2016 Westminster Hall

[Louise Haigh (Sheffield, Heeley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Flello. It is also a pleasure to follow the hon. Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr), who I congratulate on securing this important debate. He has considerable experience and expertise in the area and brings a wealth of knowledge to the debate and to the House in general. He clearly set out what we can achieve if we get this right from the outset, tackling the considerable disparities across the UK.

The hon. Member for Mid Worcestershire (Nigel Huddleston) clearly laid out the unintended consequences that could arise from the changes, particularly for our creative industries and the PMSE sector. He made clear the need to determine from the outset exactly how spectrum licensing is to be used and how to mitigate any possible issues. I echo many of the comments made, some of which I will come on to.

The auctioning of an electromagnetic frequency for public use may not set pulses racing or minds whirring, but it is the quality of the debate and not the quantity of people here today that shows how important this is. It is a matter of considerable significance for the public, our businesses and our country’s economy. In fact, it is one of the public sector’s most significant assets. How it is auctioned and regulated and, crucially, how the public stand to benefit from any auction are issues of critical importance to the expansion and growth of the digital economy and the economy at large. That is why we have been pushing the Government to be so much more ambitious in this crucial area. The sector is crying out for more clarity, vision and ambition.

In an always-on world, where the demand for mobile data is increasing at almost the same rate as digital entrepreneurs can think of novel ways to use it, the provision of mobile data, both geographically and in terms of residences and businesses covered, is crucial. It should absolutely be seen as a utility in this day and age, and we should, as far as practically possible, do everything in our power to achieve near-universal coverage, regardless of any vested interests that may try to hold back progress, and to overcome the flaws and market failures that hold back investment in infrastructure.

Recent analysis by Ofcom made the future trajectory of data usage clear. It suggested that between 2015 and 2030 demand will increase forty-fivefold. Since March 2011, data traffic has increased by 710%. It is not just usage, but the way in which data are used that is transforming our economy. The next decade will see only more change—change that we cannot currently imagine.

Let us look at some recent examples from around the country and the globe. In Germany, the annual harvest is on the cusp of a digital revolution, with sensors monitoring everything from air temperature to harvesting rates in real time, increasing productivity and bearing down on food insecurity. One German company has spent more than €2 million developing ways to automatically transmit information from the harvester operating in the field to grain experts thousands of miles away who can instantly assess the yield.

For there to be a true success story in Britain, data coverage is vital. That is not just in residences and not just on one mobile network, but across all networks, on the many transport arteries that criss-cross the United Kingdom—motorways, train routes, where coverage is still abysmal, and our waterways—and in the most rural parts of the country. The 700 MHz spectrum will help in achieving coverage in hard-to-reach places, particularly due to its ability to penetrate through thick walls. It will help to provide that foundation layer of connectivity. To do that, however, the licensing conditions for auction have to be ambitious and tough. The auction cannot just be a boon for the Treasury; it has to bring substantial benefits to the public at large and to our digital economy.

[Drew Hendry]

Does the hon. Lady agree that it is possible, as we can see from the German example, to put tough conditions in place and still raise some money from the auction?

[Louise Haigh]

Absolutely. I could not agree more. The issues that have been raised today need to be seen alongside that point. The income for the Treasury should not be the first and only priority.

In our view, while Ofcom does a fantastic job of regulating and auctioning the frequencies, such decisions are in reality political. Where and how coverage targets are met matters greatly, and we in this place should be setting tough conditions for the auction. We would like the Government and Ofcom to be much more ambitious, and we would like to see clear licensing commitments to reflect that ambition. Geographical coverage is still poor, as we have heard. The targets set by the Government—to reach 90% of geographical coverage for voice and text by 2020—simply do not go far enough to meet the challenges of a data-driven world. In fact, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) mentioned, we are lagging behind many of our international competitors, who have significantly improved coverage through different and imaginative approaches to licence obligations. For example, Denmark has focused on specified postcodes, France has covered an incredible 99.6% of its population, the Netherlands has covered all main roads, waterways and airports, and Cyprus has specified rural areas and high schools as priorities.

With that in mind, I will conclude by asking the Minister a number of questions, in addition to those asked by the hon. Member for Berwickshire, Roxburgh and Selkirk.

[Calum Kerr]

Just before the hon. Lady asks her important questions—I can see the Minister is desperate to hear them—does she agree that there is a false economy here? By seeking money up front for the sale of licences, we inhibit the speeds that exist out there in the country. That holds back productivity, where we have an enormous challenge. If we show a bit more vision and foresight and plan for the longer term, we will get faster speeds and the overall benefit to the country and the public purse will be far greater.

[Louise Haigh]

That is absolutely right. The hon. Gentleman will know that we discussed that point at length in the Digital Economy Public Bill Committee. In fact, we have brought the band back together again—it is nice to be in the Chamber with all the team. He is also right that the Minister is desperate to hear my questions—he always is—so we will crack on.

Does the Minister still expect mobile data on the spectrum to be available by quarter 2 in 2020? Working with Ofcom, what conditions does he specifically expect to set to achieve much improved geographical coverage and coverage along major transport routes? In particular, what consideration has he given to outside-in licensing, as was mentioned earlier? Will he ensure that the prime focus of the auction of an enormously valuable public sector asset is on ensuring public benefit through increased and expanded coverage, rather than on raising revenue or maximising benefits for the mobile network operators? As the hon. Gentleman just mentioned, that will bring incredible benefits to productivity and our economy.

Finally, as regards the European Union, the Ofcom strategy document, which was written before Britain’s decision to leave the European Union, makes explicit reference to the importance of the EU to the 700 MHz clearance programme, in terms of consultation and technical considerations. The European Parliament and the European Council are leading the joint decision on the timing and release of the frequency. The Minister will be aware that the European Commission recently published a draft decision that includes proposals that would require member states to allow the use of the 700 MHz band for electronic communications services under harmonised technical conditions by 30 June 2020, yet the timetable laid out by the Prime Minister indicates that we will have left the European Union right in the middle of that deadline. I would be grateful if the Minister confirmed the steps he and Ofcom are taking to ensure that Brexit does not adversely impact achieving data usage on the spectrum. Finally, what contingency plans are in place?