Release of Spectrum Band

Matt Hancock Excerpts

Tuesday 15th November 2016 Westminster Hall

[The Minister for Digital and Culture (Matt Hancock)]

Rarely has Westminster Hall seen a debate of such technical expertise and such unanimity on the thrust and direction that Members want to see. They were unanimous that increased connectivity is important and drives productivity; that when we clear the 700 MHz spectrum, we need to ensure that the concerns of those who currently use it are taken into account; that we need to use licence conditions for mobile operators in order to reach more people; that we must work appropriately to deliver the very best connectivity that we can; and that demand for that connectivity is going up. That is a reasonable summary of the points made on the direction of travel.

First, I will cover the current use of the 700 MHz band, why that is changing and what will happen as a result. I will then turn to the broader points raised on connectivity. This band of spectrum is an important public resource, and we will auction the use of it with the aim of getting the best benefit. It is currently used for digital terrestrial television, which is the TV we get through an aerial. Some 75% of UK households use it in some way. When TV was first launched in 1936, it used a large block of radio frequencies for which there was no competing use. Today those frequencies are in demand for mobile phones—in particular for mobile phone data—and other technologies, such as wireless microphones for the programme making and special events sector, to which my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) referred.

Demand for mobile data is growing exponentially, as Members have said. The figures I have are that in January 2011, 27% of UK adults had a smartphone and 2% had a tablet. By August 2016, that had grown to 71% and 59% respectively. That meant that demand for mobile data doubled every year from 2012 to 2015. That trend is forecast to continue, and Ofcom has decided to reassign some spectrum from DTT to mobile, namely the 700 MHz band. That will mean that there is enough spectrum for DTT services and new spectrum to carry a lot of data longer distances, making it very useful for providing coverage across the UK. The 700 MHz spectrum is important because it can carry heavy data loads over longer distances, which is particularly important to the debate about ensuring that we have rural connectivity.

Working with Ofcom, we have set up a programme to ensure that we can clear the 700 MHz band, and up to £600 million is available to support the necessary changes. The main change is to adapt the infrastructure for TV to ensure that that switchover can happen. Support is also available for that for the PMSE sector, as my hon. Friend for Mid Worcestershire mentioned. To answer his questions specifically, Ofcom is consulting on the assistance to be provided. The details of exactly how that support will flow will follow on from that consultation. I met the industry body last month to hear the concerns directly, and we will continue talking to the industry to ensure that the switchover happens effectively. Although the spectrum is essentially domestic, in that the distances it covers mean that there is not overlap, there is overlap in the fact that other countries use equipment on similar spectrums, and therefore in the manufacture of equipment. I acknowledge that, but I think that the issue can be dealt with, given the taxpayers’ money set aside for mitigation.

On the questions on rural connectivity raised by the hon. Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr), I agree strongly that we have seen a positive direction of travel. It is rare that an SNP Member describes the Government thus, but I am delighted that he did. No doubt he will agree that this week’s announcement by Virgin that it will cover 360,000 more premises in Scotland, the majority with fibre to the premises, was extremely good news.

The hon. Member for Sheffield, Heeley (Louise Haigh)—I almost called her my hon. Friend, we have spent so much time together—made a very interesting speech. Both she and the hon. Gentleman raised the need to ensure that licence conditions include coverage, which is well understood by the Government. It was a mistake by the Labour Government in the early 2000s to set out licence conditions without such geographic coverage requirements. We had to reverse that after the licences had been set, in 2014, to get enforceable targets into the licence conditions, and we are strengthening that enforcement in the Digital Economy Bill that is currently before the House. There are now licence conditions for the four main providers to reach 90% geographically, which is equivalent to about 98% indoor coverage.

[Drew Hendry]

Can the Minister confirm that he is saying that the Government will adopt an outside-in approach to licensing in future rounds?

[Matt Hancock]

We have actively brought that into the existing licences, even after they were struck by the previous Administration. The hon. Gentleman can see clearly the attitude that we take to the need for high-quality, ubiquitous coverage of voice and text and then of 4G, as well as to the groundwork needed to make sure that we prepare for 5G in the years ahead as that technology comes on stream.

[Drew Hendry]

I just want to push a little further on that point, if I may. The Minister has suggested that there is an attitude and a direction of travel, and has accepted what needs to happen. Will he go a bit further and say that that will be the Government’s approach?

[Matt Hancock]

We expect to auction mobile licences for the 700 MHz band in late 2018 or 2019. It will be for Ofcom to conduct those auctions. The hon. Gentleman can see that the Government’s existing policy is to insist on licence conditions on mobile coverage. We are clear about the need for broad mobile coverage and the need to hold the mobile network operators’ feet to the fire on their licence conditions. Some licence conditions go further than 90% geographic coverage—not least those of EE, because it has the emergency services licence—and also include road coverage, to make sure that we get not simply geographical coverage but coverage of the geography where people use phones, which, along with premises, is on the roads.

The hon. Member for Berwickshire, Roxburgh and Selkirk mentioned the Faroes. I am meeting Jan Ziskasen from the Faroe Islands Government tomorrow to understand more about what they have done. Areas of sparsity with similar geographies to some parts of Scotland can always give us a greater understanding of what can be used to deliver connectivity in those geographies. I am enormously looking forward to that meeting and to hearing what more we can do.

The hon. Member for Sheffield, Heeley asked a number of specific questions. First, she asked whether we expect availability by 2020. The answer is broadly yes, we do. As I said, the auctions will take place beforehand, but we want to get on with this as soon as we make the switchover. I have answered her question on coverage being included in licence conditions; that is existing Government policy.

The hon. Lady asked a question about maximising revenue. She said that we should not maximise revenue first and foremost, but should instead look to the benefits of productivity. If only that had been the approach of the last Labour Government, perhaps the list of countries that we are behind would not be so long.

Finally, the hon. Lady asked whether we will work with EU partners. Yes, of course we will. I will be travelling to the Telecoms Council myself next month to make sure that while we are a member of the European Union, we continue to work with our European partners to get the very best connectivity for the whole country.

[Calum Kerr]

This is a happy, consensual debate, is it not? The Minister almost gave my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) a positive commitment—he managed to row back as fast as possible, but the direction was still positive. Does he support the concept of “use it or share it”, and will he consider it as another potential solution in rural areas, where existing spectrum licence holders are clearly not providing a service?

[Matt Hancock]

That is a matter for Ofcom to consider in setting the details of how the spectrum is auctioned. It will of course consult on exactly how that auction takes place, and I am sure it will have noted the hon. Gentleman’s comments.

I hope that I have answered all the questions asked today. This is a very important issue, if a rather technical one. I am grateful for the interest in it—

[Drew Hendry]

rose—

[Matt Hancock]

That interest extends to constant interruption by SNP Members while I am trying to finish my speech—I will give way to the hon. Gentleman.

[Drew Hendry]

I am extraordinarily grateful for one last opportunity to intervene on the Minister. I asked a question during my speech about the opportunities for accelerating the process. I wonder if he could give an answer on that.

[Matt Hancock]

I apologise for not answering that question. These changes are best done in an orderly way, with a clearly set timetable. In this case, there are three and a half years still to run. Having set the timetable, I think it is best to stick to it, especially because of the impact on existing spectrum users, and to make sure that the changeover happens in the most orderly way possible.

With that, unless there are any further interventions, I will finish by saying that I am grateful to Members for the broad consensus of support for what we are trying to do to improve connectivity through the use of the 700 MHz band.