Broadband

Matt Hancock Excerpts

Wednesday 8th March 2017 Westminster Hall

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

Mr Owen, you are also my favourite Chair. Responding to the debate is a great opportunity, and I am grateful to my hon. Friend the Member for Boston and Skegness (Matt Warman) for securing it. It is an unusual debate, because on the broad principles that have been set out, everyone—across parties and across rural and urban areas; the Government, the Opposition and Back Benchers—is in agreement.

Hon. Members have spoken passionately today. In some cases, they gave precise details of problems with broadband roll-out. We are making progress there, but clearly there is more to do. In fact, thinkbroadband, which measures these things independently, announced today that the figure for superfast broadband availability is now up to 92.5% of UK premises. We are on track for our target of 95% by the end of this year. That is good news on the roll-out. That is superfast broadband measured at 24 Mbps, which brings us to the meat of the debate—the clarity with which these things are recorded and measured.

I take on board the points about frustration with specific parts of the roll-out, but I will concentrate on the subject of the debate, which is clarity on how these things are measured. We agree that the current rules permit adverts that are likely to mislead, as a headline advertised broadband speed needs to be achievable only by 10% of customers. It is unfortunate that those who advertise broadband currently neglect the famous maxim of David Ogilvy:

“The more informative your advertising, the more persuasive it will be.”

As in any market for broadband, customers need clear, concise and accurate information to make an informed choice. We are therefore including measures in the Digital Economy Bill to strengthen Ofcom’s powers to provide information to consumers, including data on the accuracy of broadband speed predictions. In the digital strategy that we launched last week we said:

“We are working with regulators and industry to ensure that advertising for broadband more accurately reflects the actual speeds consumers can expect to receive, rather than a headline ‘up to’ speed available only to a few, and accurately describes the technology used, using terms like ‘fibre’ only when full fibre solutions are used. There should not be a gap between what is promised by providers and what is experienced by the consumer.”

I stand by that, not least because we launched the strategy last week. I hope that Members will forgive me for the length of that direct quotation, but it is important. I also hope that I can accurately put some advertising in place myself; for those who have not read the digital strategy, it is well worth a full read.

On the mechanics of this, as many Members have said, the broadband speed claims that can be made in adverts are regulated by the independent Advertising Standards Authority. It is a good thing that the Government do not directly regulate advertising. However, I am sure the ASA will want to listen to the strength of feeling that has been expressed unanimously during this debate by Members representing hundreds of thousands of people and many businesses.

[Julian Knight]

Will the Minister commit to writing to the Advertising Standards Authority to ensure that it follows through on this issue?

[Matt Hancock]

Yes—I might include a copy of the Hansard, although I know that the Advertising Standards Authority will be listening because I spoke to its chief exec yesterday to explain that this debate was going to take place. I explained that it is not only the Government’s view that we need to have more accurate advertising, but a widely held view in Parliament.

To give the ASA credit, it has made serious progress in one area. Last year it changed the rules on prices for landlines and line rental being advertised separately from the price for just the broadband element. Previously, an advert might have had the broadband cost and then said in the small print at the bottom, “You also need line rental of £19.99 a month.” Now it has changed those rules, so the costs are amalgamated. That has been a success and, in a way, shows what an effective body the ASA is when it insists on accurate advertising.

[Calum Kerr]

That is a really important point, because we have seen that there is real competition in the line rental part of the sector. It is a bit like the case of low-cost airlines—once the whole price is considered, competitors compete across every part of it. By making that change the ASA has driven far greater competition, and it should be encouraged by that.

[Matt Hancock]

Yes, it should. Its sister body, the Committee of Advertising Practice, which is responsible for writing the UK advertising codes, is now in the midst of reviewing its guidance on broadband speed claims and is on course to publish the findings of that review this spring—I am sure that it will listen carefully to this debate.

The ASA has made progress this year and is in the middle of consulting on and reviewing the issue of “up to” speeds, but there is an area where it has not yet made any progress: the description of the technology. In my view, and having talked to many people about broadband, some people look at numbers when making a decision and some look at descriptions. It is natural that we look at different things. Describing technology as “fibre” when it is not in fact entirely fibre is misleading. If anything, that view was compounded by a briefing note given to me by BT for this debate, which says that

“customers overwhelmingly have no preference for the technology used to provide broadband.”

That may be true, but it does not mean that people want an inaccurate description of the technology. It goes on to say:

“While BT does provide the most FTTP (‘full fibre’) lines across the UK, the average FTTC line is around 93% fibre…The ASA has looked at this situation and agrees that services using almost entirely fibre-based technology can be described as ‘fibre’.”

I very much hope not for long. BT then demonstrates why that is deeply misleading, because the next sentence says:

“A higher proportion of UK premises can access fibre broadband than in any of the other four major European economies (Germany, France, Spain, and Italy)”.

That is not true. It is true only if “fibre” is defined as being part fibre and part something else, whether copper or aluminium. If fibre is defined as being fibre—I believe that fibre means fibre—in fact we are not the best of the five major European economies, but the worst. Accuracy would help BT to provide more accurate briefing notes, and its use of the term “fibre” should be updated. I am sure that the ASA will be able to take that forward in due course.

I want to touch on a couple of the other comments that were made. My hon. Friend the Member for Solihull (Julian Knight) and the right hon. Member for Slough (Fiona Mactaggart), in a commendably crisp speech, made points about business connections. If anything, this issue is more important for business customers, because businesses of different sizes may need services of different scales. Whereas a superfast connection is more than most households would need at the moment, if businesses have several people working on data-heavy projects they might need a highly scalable product, and for that, the technology really matters.

I am sure that everyone is delighted that in the Budget this afternoon, the Chancellor announced significant progress on having a full-fibre business voucher. I am delighted that that will now be rolled out. We proposed it first in the autumn statement and consulted on it in the last couple of months. I am delighted that it was part of the Budget; it will be an important step forward. However, we have had to describe that as “full fibre” to get away from the completely unnecessary ambiguity over the term “fibre”. I am confident that that will change soon.

The second point I want to touch on—again, this was raised by the right hon. Member for Slough—is the appropriate proportion of customers who should be able to get a particular speed. That is technically difficult, especially because speeds vary when more people get on to the network, so it is important to ensure that we get the technical specifications right. I have full confidence that the ASA, in listening to this debate and to customers around the country, and in considering the technical challenges, will come to a reasonable conclusion. I look forward to working with it to get there and to engaging with Members on both sides of the House to make sure that we have a fully functioning, competitive, well-informed and accurate broadband market, and that people no longer feel the frustration of being misled by thinking that they are buying one service when, in fact, they are delivered another.