Broadband (Cheltenham)

Martin Horwood Excerpts

Tuesday 4th November 2014 Westminster Hall

[Martin Horwood (Cheltenham) (LD)]

Thank you, Mr Hollobone. You will have to forgive me taking a moment to catch my breath. After a three-hour journey, I had to run across New Palace Yard to get to the Chamber on time—but I am here.

The origins of the problems in Cheltenham date back a long time. We have an unusual telephone exchange lay-out, with a single exchange to serve a town of 120,000 people. The further one gets from the central exchange by copper wire, therefore, the worse the telephone service is. In the 1960s, as the exchange developed, that lay-out did not make a massive difference; voice call quality was simply slightly worse in the outlying areas of town. Today, it makes a huge difference, because internet broadband speeds drop off the further one is from the exchange, so even if some parts of town have a decent basic broadband service of about 2 megabits per second, in outlying areas such as Up Hatherley and Springbank speeds can be as low as 0.5 megabits per second.

I have raised this issue over many years, including with the Minister’s predecessors in the previous Government, but we were told that the digital revolution was coming and that we need have no fear, because given the commercial roll-out and the gap-filling exercise that the Government rightly prioritised—the Broadband Delivery UK programme to subsidise hard-to-reach areas—all would be well. Indeed, the Government have put more than £100 million for England into BDUK to reach those areas that are not commercially viable. BT told us that it would be able to supply most parts of Cheltenham with a commercial service, and that other operators would be playing their part.

It looked as though the Government’s targets, which are ambitious, would be met as far as Cheltenham was concerned. The targets are to achieve 90% availability of superfast broadband, with speeds as high as 25, 30 or more megabits per second, and for everyone to have the basic 2 megabits-per-second broadband service, whether they had upgraded to superfast fibre-optic or not. It seems to me, however, that the real risk is that neither of the targets will be met in Cheltenham, and if they are not met in an urban area such as Cheltenham, they are unlikely to be met nationwide.

Today that matters, because we are talking about something used not only for entertainment or casual purposes, but by people working from home who need access to documents. One computer programmer told me it took three days to download a programme on the broadband speeds available to him. Children have to access their homework; my kids access their school intranets to file their homework and to access homework materials. People also do their banking, respond to Government consultations and apply to university via the internet. A basic internet service is no longer a luxury, but something that people expect. People certainly expect that when they buy new houses, but we have people moving into an almost brand-new estate only to discover that they do not even have 2 megabits per second available on their broadband service, which is clearly unacceptable. We need to ask why that is happening.

The commercial roll-out has proceeded and BT has done a pretty good job. It is reaching about 88% of the homes in Cheltenham, but that leaves a gap of at least one in 10 homes. Other commercial operators, including Virgin, are active in the town and are filling some of that gap, but far from all of it. We hoped that the Government-subsidised programme would then step in and fill the remaining holes, but that does not seem to be happening.

The Government-sponsored programme in Gloucestershire is called Fastershire, and it tells me that for various technical reasons it simply cannot fill the gaps. Its 2011 open market review did not identify the specific gaps; it was given information by the commercial suppliers on a postcode basis, but the supply is actually provided on a cabinet, street or even premises basis, so Fastershire had an inaccurate picture of where broadband would be provided commercially. Fastershire also states that BT and some of the other commercial operators have changed the boundaries and the areas in which they are operating. Given how Fastershire is set up, it must apply for state aid exemption to subsidise particular postcode areas, and it cannot undo that approval to fill in gaps that emerge over time.

I hope that the Minister’s broadband service is good on his mobile phone, which he is checking at the moment. I also hope that what I am saying is sinking in, in terms of the seriousness of what is happening in Cheltenham.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

My hon. Friend is inviting me to intervene. I am happy to do so, and to start responding to him now. Obviously, I am aware of all the points that he is making, and I am pleased that he managed to make it to his own debate.

[Martin Horwood]

Thank you.

The problem that people face is that they are falling between the gaps. Fastershire is providing a roll-out programme that is overwhelmingly geared to rural areas, but even after the open market review had shown that there were gaps in urban Cheltenham, it has not identified an immediate way in which to deliver a decent broadband service or access to superfast broadband in the areas that have been left out. We are finding increasing numbers of such areas, in Benhall, The Reddings, Up Hatherley, Springbank and Battledown. Only last week, I discovered a new area in the St Paul’s part of town, where a brand-new estate is without decent broadband services.

New estates, or those filling in between older areas, seem to be one of the key problems, and where the service has not been provided. That might be an historical pattern of some sort—perhaps no dedicated BT cabinet, or a cabinet used to serve a smaller number of premises—but whatever the reason, people find it extraordinary that they are moving into brand-new homes in which the developers have not bothered to ensure broadband services. People then find that they fall between the gaps, with BT or other commercial operators saying that such a service is not commercially viable and Fastershire saying, “Sorry, guv, it’s nothing to do with us, you’re outside our approved area.” Fastershire is conducting a new open market review, but if some of those problems of communication between it and the commercial operators persist—if we repeat the problem of information being provided by postcode, when services are provided by cabinet, street or individual premises— we might find yet again that gaps emerge and households are left out.

I have a few things to ask the Minister to have a look at. First, on planning and building regulations, if we are so ambitious as a Government to deliver superfast broadband across the country, it seems wrong that we are allowing new estates to be built without the provision of proper broadband services. That is something that could be tackled. I know that councils are wary these days—with due reason, in some cases—of imposing restrictions on developers and conditions on planning consents that might be seen to be unreasonable or threaten the commercial viability of a housing development. I would like the Minister to talk to his colleagues in the Department for Communities and Local Government to see whether we can reassure councils that it will be regarded as reasonable, and that they will not be challenged, if they insist that those developing new developments have to put in decent broadband services and, if necessary, pay BT to connect the local cabinet to the option of superfast broadband.

The second thing is for the Minister to go, at national level, to BDUK and the various commercial providers —mainly BT, but also Virgin, EE, TalkTalk, Sky and others—to try to resolve these issues about communication, and about the basis on which the maps are drawn that decide what is commercially viable. It would be reasonable to knock some heads together and say, “Listen, it is completely unacceptable that you all have the information, but each side is blaming the other when it comes to how the information is provided.” Fastershire in Gloucestershire told me that it was provided with information by BT and the others only on a postcode basis, so that was the only basis on which it could draw its maps. BT insists that Fastershire has all the information it needs to fill the gaps. They cannot both be right. The Minister needs to sit down with BDUK and the commercial providers to knock heads together and find out why Cheltenham and, presumably, other urban areas right across the country have so many gaps in the roll-out.

We need to offer a bit of challenge to some of the commercial operators. At least behind closed doors, we need to remove the cloak of commercial confidentiality and ask exactly on what basis they are judging whether an area is commercially viable. On some occasions, the operators have suggested to people that if they could raise the money themselves—that would effectively add a subsidy through the community—they could have the option of connecting to superfast broadband. If a community is willing to raise that money to subsidise superfast broadband, presumably they would be willing to pay the premiums required to upgrade to it, which implies that it would be commercially viable to go into that street or estate. I am still not clear whether the poor service that some areas get is part of the consideration, or whether BT is doing a tick-box exercise using the area’s demographics, house prices, topography and so on. The decisions seem to be fine judgments in some cases.

There are a few bits of good news. For example, BT and Fastershire have been prepared to talk about these issues and, I think in both cases, are generally committed to removing the embarrassing gaps in the programme. There are some good news stories where community effort has resolved the issue. Cabinets 124 and 214 in Cheltenham are, in different ways, good news stories. In one case, the community persuaded the developers of a new estate to underwrite the cost of putting superfast broadband into their local cabinet, so that cabinet should be okay. In another case, the community persuaded BT to shift the cabinet, apparently to make the viability more commercially promising. BT is therefore including that in its roll-out plans.

We still have a number of other cabinet areas that have been left out. I am notified weekly of new streets where people are getting poor service. Going back to the original problems with the centralised exchange, poor service is particularly hard to take for those who live in the areas that were most distant from the old exchange. In some parts of Cheltenham, people in one street have a service of 0.5 megabits a second, which is an unconscionably slow service, while only yards away people can get 25 to 30 megabits a second and have a service that is 60 times better. That is pretty hard for people to understand and accept.

I do not expect the Minister to have an instant solution. I realise that there are complexities around state aid rules and the planning of these programmes over many years, but I do not think we are likely to meet our ambition as a Government to supply at least 90% of the population with access to superfast broadband by next year, and to supply everyone with a service of at least 2 megabits a second or better, if areas such as Cheltenham are not meeting the targets. I would like him at least to recognise the problem, and to promise to get the commercial providers, the roll-out programme for BDUK and programmes such as Fastershire in Gloucestershire together to try to establish what information can be shared on a rolling basis, so that we can ensure that these gaps do not continue to emerge in the delivery of broadband.

The Government have rightly prioritised the issue. The calculation is that superfast broadband could be worth £400 million to the Gloucestershire economy alone. To the country as a whole, it is economically vital. It is part of our future and our competitiveness as a 21st-century nation. We have to do better for some of my constituents.

[Mr Philip Hollobone (in the Chair)]

I commend the hon. Gentleman on the way in which he addressed the House this morning, and in particular on starting the debate by demonstrating what the human form of superfast broadband might look like. For one dreadful moment, some of us thought that he might be the replacement for the right hon. Member for Lewes (Norman Baker) in the Home Office, but I am delighted that he has managed to be here. His constituents should know that he made his whole speech without referring to any notes. Having listened to a lot of his speeches, may I say that he speaks rather better without notes than he does with brief supplied to him?

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

It is a pleasure to appear before you this morning, Mr Hollobone, with my prepared speech typed out for me by my officials, which I intend to refer to constantly through the next 15 minutes. I join you in congratulating my hon. Friend the hon. Member for Cheltenham (Martin Horwood) on his superfast appearance at this morning’s debate. At 10.59 am, I wondered whether he was going to make it, but he arrived right on cue, although his initial remarks were characterised by a certain breathlessness. For those of us who aspire for our appearances in the House to be broadcast on “Today in Parliament”, I have some concerns that the BBC will perhaps decide not to broadcast the beginnings of the debate in case it gets complaints from its listeners about heavy breathing. When at one point he stopped dead in the middle of his speech, I was worried enough about him that I was forced to intervene to ensure that he had recovered appropriately.

My hon. Friend has covered a number of important points to do with broadband in his constituency and some national issues. He fairly made the point throughout that this is a flagship programme for the Government. On a national level, we are investing something like £1.7 billion in superfast broadband roll-out. That is money direct from Government and from local authorities. It includes some European money—forgive me for mentioning that, Mr Hollobone—and some private sector money from BT. My hon. Friend highlighted examples in Cheltenham, and many of the specific issues that he raised are ones that I have had to grapple with over the past four and a half years.

As my hon. Friend mentioned the national picture on several occasions during his remarks, I begin by reminding the House of the successes we are seeing with the national broadband roll-out. Superfast broadband coverage in the UK is very high, at 78%. We outperform the other four big European economies. On the world stage, we perform well in access to superfast speeds and in price, which is important when looking at access to broadband. We have a competitive telecoms market in the UK and accessible prices. I am often told that in such-and-such a country, people can access speeds of, for example, 100 megabits per second, but no one ever completes the sentence by saying that it costs the equivalent of £80, £90 or £100 a month, or perhaps even more. Price is important. We have passed the 1 million mark in premises covered since all the contracts were signed, and we are now covering something like 40,000 additional premises every week.

My hon. Friend referred to the need for commercial providers to do more in urban areas. I am pleased that, partly as a result of discussions with the Government, BT has set aside an additional £50 million for broadband in cities and that Virgin Media, under its new leadership, is also looking to extend its footprint, which it has not done before. We therefore expect some half a million additional premises in cities and towns to benefit from the commercial deployments of BT and Virgin Media. Overall, thanks to our superfast broadband programme, some 4 million additional premises will get coverage.

Turning to the local issues raised by my hon. Friend, the Fastershire project, covering Herefordshire and Gloucestershire, will see central Government investment of some £29 million and total investment of over £55 million. I appreciate that this does not relate specifically to his constituency, but the programme has already reached more than 32,000 homes and businesses and will reach almost 146,000 over the next three years, meaning that Herefordshire and Gloucestershire will see 93% of their premises enjoying the benefits of superfast broadband. My hon. Friend’s constituency of Cheltenham is projected to see coverage of some 96%, with 48,000 out of 50,000 premises covered by the commercial deployment. Of the 2,000 that are not covered, some 625 should be covered by phase 2 of our broadband project.

[Martin Horwood]

I would be interested to know where that figure of 96% comes from, because I am not familiar with it. BT tells me that it is delivering commercial broadband to 88% of the town, but neither it nor Fastershire can tell me how much of the remainder is being supplied by companies such as Virgin Media. As it stands, at least one in 10 households in Cheltenham will not be included and will not have the advantage of that commercial roll-out. The Minister does not have to provide the information now, but if he could write to me to explain where that 96% came from, I would be grateful.

[Mr Vaizey]

I will certainly set out the details for my hon. Friend. BT is responsible for setting out only what its own coverage will achieve in Cheltenham, but we are able to access an overview of total coverage, including that provided by Virgin Media, for example. Thanks to local loop unbundling, Cheltenham residents, like residents all over the country, are able to take advantage of other providers, such as Sky and TalkTalk, using the network.

My hon. Friend mentioned state aid. It is a difficult issue that we have resolved as far as rural broadband is concerned, but it is difficult in towns and cities, where state aid is deemed to distort free markets because of high levels of commercial investment. It may be that the commercial investment case is not as clear as we believe, but we should make every effort to support commercial investment before investing state funds. The criterion for public investment is that the area must not have current or planned supply of services within three years, and we must test that through market reviews such as the open market review to which my hon. Friend referred. That takes time, planning and resourcing. In places such as Cheltenham and similar towns, the case for public investment is not straightforward, and we must tread carefully.

The Fastershire project ran a market review in 2011, and areas that were reported to be without provision or plans for it were included within the scope for investment under phase 1 of the programme. The belief at the time would have been that many areas outside the scope of the local programme would be covered by commercial plans. However, sometime plans change for unforeseen reasons, and there will another opportunity under the current open market review of phase 2 of the programme to consider including those areas in local plans.

[Martin Horwood]

I am grateful to the Minister for giving way a second time. One problem with the initial open market review process is the basis on which information was exchanged about which areas were commercial and which were not. The open market review was conducted on a postcode basis, whereas actual delivery has been cabinet by cabinet, street by street or premises by premises, so gaps have emerged within postcodes. For example, Fastershire might say that it cannot act as a postcode was deemed commercially viable, but people within the postcode might be told by BT that it is not commercially viable. Will the Minister knock heads together to get such issues resolved?

[Mr Vaizey]

There are many local issues to consider. The viability of enabling some cabinets and premises is not straightforward. We do go down to six and seven-digit postcodes, but I am happy to consider specific examples that my hon. Friend wants to bring before me. Other factors that come into play include local infrastructure and buildings, such as the locations of cabinets, planning permissions, railway lines and street furniture, all of which can cause problems. Where suppliers cannot connect cabinets due to such obstacles, we work closely with them to provide solutions. The open market review in Herefordshire and Gloucestershire should resolve some such issues, but I will be delighted to look at any specific examples that my hon. Friend would like us to consider.

While talking about the Fastershire project, I must say that the area has a number of providers offering a different range of technologies and solutions. Companies such as Loop Scorpio, Airband and Cotswold Wireless all provide services in different parts of the two counties. We have also announced eight pilot projects with alternative providers to look at getting to the most hard-to-reach areas.

The second issue that my hon. Friend raised was provision to new builds, which is a frustration that I share. We considered regulation in 2010, but it was decided at the time that it would be inappropriate. Over the past few months, it emerged that a number of large developments were being constructed without proper broadband provision. It is possible for local councils to make it clear when giving planning permission that they expect developers to provide superfast broadband, but by engaging with BT, Virgin Media and several other providers, such as Hyperoptic, it became clear that we needed a much better system of developers working together with such organisations.

Following two meetings with me as Minister and a series of meetings with BDUK, we instituted a forum through which developers can contact telecoms providers with their plans for new builds, so that superfast broadband can be provided at the appropriate time for ducts to be laid and so on before proper building commences. I am also pleased that Openreach is in the process of hiring an additional 1,500 engineers in order to meet such demand. We will work with house builders and telecoms providers to continue to develop an action plan to ensure that new developments have access to superfast broadband. I agree wholeheartedly with my hon. Friend that it is completely unacceptable in this day and age for somebody to move into a new home to find that superfast broadband is not ready to be connected.

Forgive me for reading a significant proportion of my speech, Mr Hollobone, I will now go into improvisation mode and will try to avoid hesitation, repetition or, indeed, deviation in summing up. The Fastershire project has been a great success so far, with 32,000 premises covered out of almost 150,000 planned, and some £15 million invested. I am familiar with the problems relating to urban development highlighted by my hon. Friend in his excellent speech without notes, and it is difficult to get appropriate state aid in order for us to subsidise broadband roll-out in urban areas. People find it hard to believe, but there are urban areas that some telecoms companies deem uneconomical to supply. I will certainly consider any specific examples that my hon. Friend wants to provide and will, as he instructed, knock heads together—metaphorically—to see whether we can make some progress.