Broadband (Tech City)

Debate between Meg Hillier and Lord Vaizey of Didcot

Wednesday 4th February 2015 Westminster Hall

[Mr Vaizey]

As I was saying, my understanding is that these sectors are separate parts of BT’s business. So, a residential customer who wants a BT line will get a BT line, but that line will also be open to BT’s competitors, such as TalkTalk and Sky, to run their service across that line. The business market is different, and BT is under no obligation to share its commercially sensitive data about which business customers it has and which business customers it is targeting. BT is a private company; it is not a national company. It is not running a not-for-profit service; it competes vigorously with other business providers. It is important to stress that in most areas there is a very vibrant business market, with a lot of different suppliers supplying it, whether that is in central London, Manchester or elsewhere.

Because we could not get state aid directly to subsidise the build-up of fibre, we wanted to support individual businesses to get the connections they needed. So we have made available, for example in London, connection vouchers, which would allow a business such as Proudfoot TV to apply for a voucher and to have the connection charge met by that voucher. In London, 2,500 businesses have taken advantage of that scheme. The other interesting thing we learned from that exercise was that the total number of potential suppliers—bearing in mind that the service was available in 22 cities—ran to something like 500 or 600 companies.

I hear a lot of criticism about BT in debates such as this one, and I sometimes feel that I am BT’s spokesman in the House of Commons because I am constantly having to defend it, either on customer service or on the grounds of competition, but it is interesting to note that where money, and a good margin, can be made, there is a competitive market. So, if someone is in the centre of a city such as London, with a lot of SMEs, they will find a lot of suppliers willing to build up networks and supply that marketplace. However, if someone is in a village in a very rural area, the only game in town tends to be BT. That is the problem we are addressing.

[Meg Hillier]

rose—

[Emily Thornberry]

rose—

[Mr Vaizey]

I will give way to the hon. Member for Hackney South and Shoreditch.

[Meg Hillier]

There is hot competition to challenge the Minister on that.

I thank the Minister for his comments, and for the move to reduce the cost of Openreach prices to some of the competitor companies. I say that because one of the issues is the overall cost of superfast broadband, both for businesses and residents. Would he, along with the Department for Communities and Local Government, look into this issue about changing planning, for wayleaves—to gain access across property—and to allow other technologies to be installed on or in buildings, because currently the planning rules make it harder for competitive technologies to enter the market?

[Mr Vaizey]

I am certainly happy to look at the planning regulations. Through the Infrastructure Bill, we were proposing some changes to the electronic communications code, mainly to help those erecting mobile masts. We withdrew those amendments when it became clear that there was some concern over whether mobile operators could use them to go on to each other’s masts and make changes. We will consult and are keen to make those kind of amendments. We would certainly look at any other planning changes that could make life easier for anyone who wants to build a mobile network, a fibre network, or something between the two.

While I am talking about mobile, it is important to remember that in most urban areas, and in particular in central London, the roll-out of 4G is continuing apace. We have the fastest take-up and roll-out of 4G of pretty much any country in the world. It is important, however, to stress the difference between the business market and the residential market. When you or I are at home, Mr Crausby, we will want a connection of 2 to 3 megabits and probably of 7 to 8 megabits, and with that connection, we would want do the normal things that one would expect, such as watching something on iPlayer or sending a document back to our office by e-mail. We would not necessarily, however, be uploading a very data-heavy two-and-a-half minute film. If a business has at its core the transmission of huge packets of data, one would expect it to be prepared to invest in the kind of business lines that are legion in London. An ethernet line is available in St John street in Islington. Virgin Media is in that street. It would cost that business perhaps £200 to £300 a month, once it had the connection established, to run it.

Another key point is that although we have some of the lowest broadband speeds anywhere in the world—the lowest compared with the EU5 and the USA—it will not astonish the Chamber to learn that the faster the speed, the higher the cost. Sometimes, my hon. Friends and colleagues say to me, “I have just been in such and such a country. You know what? The bloke I was staying with had a 1 gig connection. It was amazing. They could download a film in two minutes. It was incredible.” They never bother to ask that bloke how much he is paying for that 1 gig connection. If someone wants a 1 gig connection, they will pay more than if they want a 1 meg connection.

[Mr Vaizey]

We are getting to the crux of the matter. Fundamentally, this debate is not about whether broadband is available, but whether businesses that use a huge amount of data should get a cheap broadband service. My contention is that, first, broadband is available and, secondly, it is a highly competitive marketplace. I will, however, highlight some of the changes.

The hon. Lady is quite right; there may be an established business with 10 or 20 employees that understands the need to invest in a leased line, because it is moving large amounts of data. A start-up business with one, two or three people may, however, find those kinds of costs prohibitive in the early stages. Is the market competitive enough to give them the kind of broadband speeds they need to get going? The championing, if I can put it that way, of this issue by the hon. Members for Hackney South and Shoreditch and for Islington South and Finsbury and by my hon. Friend the Member for Cities of London and Westminster on at least three occasions in the House has led to progress, so they should take pride in that. It is a good reminder to us all that it is sometimes worth raising these issues in the House, even if we sometimes think that no one is listening. Virgin Media Business is working closely with the Tech City team and is offering businesses a 50 meg symmetrical service for around £200 a month and a 100 meg symmetrical service for £249 a month. You may still say, Mr Crausby, that that is too much money, but it slightly takes the heat off BT, as it illustrates what a competitor that would dearly love to take all of BT’s business has to charge to make a return.

[Meg Hillier]

I appreciate the Minister’s generosity in giving way once more. He suggested that the argument boils down just to cost, but let me be clear that there are still companies in Shoreditch that cannot easily get a physical connection. My hon. Friend the Member for Islington South and Finsbury has told me that there are also such companies on her side of the roundabout. Alternative technologies would open up the market, make it more competitive and help drive down the price.

[Mr Vaizey]

Our speeches almost seem to be synergising. The next point I was going to make was that thanks to the campaigning of the hon. Lady and others, Virgin and BT have said that they will increase their footprint. Virgin will cover an additional 100,000 premises in east London and BT is aiming to cover an additional 400,000 premises in cities, with 250,000 of those in city centres and 100,000 of those in central London. UK Broadband is launching a superfast wireless broadband service across central London, including the Cities of London and Westminster. CityFibre and Hyperoptic are looking at delivering those kinds of services in other cities outside of London.

On planning, we are seeking to reduce red tape by introducing legislation to permit the installation of broadband, street cabinets and new overhead lines without prior approval from local planning authorities for five years. We also introduced changes to streamline the process to support the deployment of mobile infrastructure. Those are areas where we have made progress.

The City of London has talked about building its own network. Thanks to campaigning by the hon. Members for Hackney South and Shoreditch and for Islington South and Finsbury and my hon. Friend the Member for Cities of London and Westminster, we had a meeting with the City of London corporation and BT. BT is trialling “fibre to the basement” technology to try to overcome some of the technical obstacles in providing broadband for multi-dwellings. I am also pleased to say that the Mayor and the London Assembly are taking ownership of the issue. He has set up a connectivity advisory group, which has been formed to bring actors together to improve digital connectivity across London.

A great deal of progress has been made, but I sympathise with any business that is looking at the kind of costs that have been mentioned. Ofcom is due to launch a consultation on business-leased lines in spring that will report, we hope, in early 2016. It will look at competition on business-leased lines.

Oral Answers to Questions

Debate between Meg Hillier and Lord Vaizey of Didcot

Thursday 27th November 2014 Commons Chamber

[Mr Vaizey]

I am very far from being smug. Having read my hon. Friend’s interview in which he waxed lyrical about his “bromance” with the Chief Whip, imagine how I felt after our years of friendship. Nevertheless, I remain resolute in supporting him, and I am pleased to be able to tell him that Staffordshire as a whole has received £9 million to connect to superfast broadband and that his own constituency will see 8,000 homes committed under our programme. That is real “bromance”, Mr Speaker.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Even in the tech hub at the heart of my constituency we have huge challenges with broadband, as the Minister knows. One of the main barriers to having high speeds everywhere is the fact that competitors are unable to put their equipment on buildings without the permission of the landowner. Is it not time for a change in the planning laws? What conversations is he having with his counterparts in the Department for Communities and Local Government to ensure that that is delivered?

[Mr Vaizey]

I am pleased to tell the hon. Lady that I have sat down with representatives of the City of London to talk about broadband in central London. I was also pleased to hear the City of London’s plans to roll out its own broadband network, because competition is very important. She raises an important point, and we will continue to keep that matter under review.

Oral Answers to Questions

Debate between Meg Hillier and Lord Vaizey of Didcot

Thursday 16th October 2014 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

5. What assessment he has made of the conclusions of the 50th report from the Committee of Public Accounts, Session 2013-14, on the rural broadband programme.

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

The Government agreed with the Committee’s recommendations and we have made good progress on implementing much of what it recommended.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Will the Minister finally acknowledge that there was a flaw—a major flaw—in the approach to rural broadband because the bid was drawn up to favour one company that could effectively meet the criteria? Is it not now time for the Minister to find a plan B to deliver proper, superfast broadband in rural areas, as well as in inner-city areas such as mine in Shoreditch?

[Mr Vaizey]

No, I do not accept that at all. The plan was drawn up to encourage open competition, but it is important to remember that anyone who bid for this funding had to allow competitors to use a publicly funded network. BT was the only company prepared to accept those recommendations. In urban areas, there is plenty of healthy competition, and I note that in the east end of London—an area she so ably represents—Virgin Media is now investing in increasing its footprint, covering an additional 100,000 premises.

Superfast Broadband (Urban Areas)

Debate between Meg Hillier and Lord Vaizey of Didcot

Tuesday 9th September 2014 Westminster Hall

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

It is an honour to serve under your chairmanship, Mr Streeter, in this unusual and temporary setting for Westminster Hall debates. I thank my hon. Friend the Member for Cities of London and Westminster (Mark Field) for his excellent speech, which encapsulated all the concerns. I am also grateful for the contributions from the hon. Member for Hackney South and Shoreditch (Meg Hillier) and my hon. Friends the Members for Chippenham (Duncan Hames), for Gloucester (Richard Graham) and for Finchley and Golders Green (Mike Freer). It is nice to have contributions from so far afield outside London.

The main focus of the debate is broadband in London, but I know that the issue of broadband is of huge concern to hon. Members all over the country. I am pleased that a similar level of consensus has been established in this debate as has been established in relation to all our efforts to keep Scotland in the Union. May both elements of consensus achieve similar levels of success.

My hon. Friend the Member for Cities of London and Westminster, who secured the debate, talked about how his expectations had changed over the past 10 years since he went to Africa, and I think he hit the nail on the head. Even during the past two or three years since we started the programme, the legitimate expectations of businesses and residents for superfast broadband speeds have grown exponentially, not least because of the entertainment applications that residents are now used to using, such as BBC iPlayer, and because of businesses’ use of technologies such as the cloud.

It is important that we recognise some of the successes of the broadband programme that we have undertaken, as well as the commercial roll-out of broadband. Since I last discussed the subject in the House, we have, under the rural broadband programme, passed more than 1 million homes, and we are now passing 40,000 homes a week across the country. By spring 2015, we will have passed at least 2 million premises.

Of course, broadband is equally important in urban areas, and it is right to raise that issue; people sometimes think that urban broadband will simply take care of itself. In some respects, it has done so with commercial roll-out. We should recognise that BT’s commercial broadband roll-out scheme, which had no Government subsidy, reached some two thirds of premises in the country and was completed two years ahead of schedule. I was pleased that, as a result of discussions with the Government when we were putting together the extension of our rural broadband programme, BT committed another £50 million, as my hon. Friend mentioned, to reach another 400,000 urban premises.

I was pleased at the beginning of last month that Virgin Media announced plans to extend its network in east London to a further 100,000 premises, which will make a significant difference. I am pleased to see Virgin Media investing not only in faster speeds for its existing customers but in extending its footprint. UK Broadband has launched its own superfast wireless service across much of central London, including the Cities of London and Westminster. In my press cuttings today, I came across a company called Optimity from Tech City, which also plans to offer a wi-fi superfast service. We have seen the announcement that CityFibre Holdings will be working with TalkTalk and Sky to bring fibre broadband to many of our key cities across the country, as will companies such as Hyperoptic.

In the debate about broadband, we must not forget the importance of 4G. Thanks to the successful auction that we carried out, we now have the fastest roll-out and take-up of 4G mobile speeds anywhere in the world. In superfast broadband terms, in London the average download speed, as I understand it, is 60 megabits a second and the average upload speed is 59 megabits a second. I understand how important it is for my hon. Friends to make their case, but we must recognise that the UK is now a world leader in international rankings. We are the best connected of the top five European economies. In answer to the hon. Member for Chippenham, I do not believe that he will find a better scheme than our rural broadband scheme when it comes to Government support for broadband roll-out.

[Meg Hillier]

One of the real concerns of small businesses in Shoreditch is that upload speeds are simply not suitable for businesses that deal with a lot of digital data. Will the Minister address that if he has a moment?

[Mr Vaizey]

As my hon. Friend the Member for Cities of London and Westminster said, it is important to distinguish between business and residential broadband. Businesses that want certain speeds must recognise that they have to get a service that is more expensive than residential broadband. That does not mean, however, that we should not focus on ensuring that commercial providers provide good broadband speeds for residential use as well as for commercial use.

To pick up on what my hon. Friend said in his speech, it is important to look at deregulation. He outlined the huge cost of laying fibre in a city environment. That is why we have introduced legislation to permit the installation of broadband street cabinets and new overhead lines without the need for prior approval from planning authorities. That measure will last for five years. We have also introduced changes to streamline the planning process to support the deployment of mobile infrastructure and encourage the 4G take-up that I mentioned earlier.

In some urban areas, commercial investment in residential broadband has not happened for reasons to do with the original network, the anomalies in coverage and the potential expense of resolving those problems. Nevertheless, we have 88% superfast coverage in London, and London stands against any of the major cities in the world in terms of broadband availability. There are clearly vast amounts of fibre in the City of London, but that has been designed for commercial use. As my hon. Friend said, the challenge is to extend more coverage to the residential sites.

We are initiating dialogue. The chief executive of BDUK, Chris Townsend, will talk to the Mayor’s connectivity summit later this month, and all suppliers have been invited to discuss this important matter. We must support commercial deployment wherever possible. We can subsidise the supply side only where the case for public intervention is absolutely clear, to avoid chilling the appetite for commercial investment. We must satisfy state aid provisions. We have engaged with the European Commission on those matters, and we have agreed with the Commission that our focus must now be on stimulating the market to invest in and supply services to close gaps in urban broadband supply.

My hon. Friend mentioned the SuperConnected Cities programme, which is at the heart of our approach, particularly the broadband connection vouchers of up to £3,000 each. The sheer richness of the market is demonstrated by the fact that 530 suppliers are registered for the scheme and another 100 have applied to take part. We have also issued almost 2,500 vouchers. There has been a learning curve, and we have streamlined the system, making the application process much simpler. We have also removed the requirement to look for competing quotes.

Under the same scheme, we are rolling out wi-fi in public buildings across the country. For example, 12 major museums and galleries in London, covering 30 million visitors, will have wi-fi. For your interest, Mr Streeter, should you wish to visit, there is now wi-fi in the National Gallery—where they will now allow you to take photographs, and even selfies—the Natural History museum and the Imperial War museum. Wi-fi will soon come to the Tate, the National Portrait Gallery and the British Museum.

I turn to the concerns in Tech City, which the hon. Member for Hackney South and Shoreditch mentioned in her intervention. The voucher scheme has benefited firms in the Shoreditch cluster and, as my hon. Friend the Member for Cities of London and Westminster mentioned, the scheme already supports more than 600 businesses across London. I have asked BT to sit down with the chief executive of Tech City UK, Gerard Grech, to look at the problems. I have to say frankly that at the moment some of the evidence is simply anecdotal. We need a much clearer picture from Tech City and the hon. Lady’s constituents about where the gaps lie. The important thing is to bring people to the table, to analyse where the problem is and to encourage commercial providers to meet demand. Clearly, they will invest where they believe there is demand and where they know there is a genuine need for the service.

To pull back to the bigger picture, the overall broadband scheme is very much on track. We remain committed to achieving superfast broadband coverage for 95% of UK premises by 2017. We remain committed to universal access to standard broadband of 2 megabits per second.

I will pick up on a few other points. In terms of advertised speeds, which the hon. Member for Hackney South and Shoreditch mentioned, Ofcom and the Advertising Standards Authority have worked to ensure that when broadband providers sell a service, they make it clear what the average speed, rather than the highest speed, is likely to be. I absolutely understand the hon. Lady’s frustration about the length of time that it takes to get a connection. Commercial providers must improve their customer service to ensure that people can get a connection as quickly as possible.

My door is always open, and I frequently have meetings with colleagues. Wherever a notspot causes frustration in the constituency of a colleague, such as my hon. Friend the Member for Gloucester, I remain ready and willing to meet them. I urge colleagues to engage with BT, because the company will come to the table, although it will not always provide the solution that a colleague wants. It is important to keep raising such issues and not to think that we will simply push the matter under the carpet.

Oral Answers to Questions

Debate between Meg Hillier and Lord Vaizey of Didcot

Thursday 13th March 2014 Commons Chamber

[Mr Vaizey]

I understand that the Scunthorpe Telegraph has made that move and that, as a result, its circulation has gradually risen by a small amount. The Government have restricted the amount of local papers that councils can put out, relaxed media ownership rules, and continued to have statutory notices in local papers, so we do want to support local papers where we can.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Is not one of the big tragedies resulting from the loss of local newspapers the impact on journalistic training and the quality of scrutiny of our councils? Is the Minister having discussions with colleagues in the Department for Communities and Local Government about this important matter?

[Mr Vaizey]

I acknowledge the hon. Lady’s point that we rely very much on the quality of local journalism to hold local councils to account, and it is important that, where possible, savings are made and money continues to be invested in local journalism. My local newspaper group, which publishes the Oxford Mail and the Herald, tries to invest as much as it can in local journalism because it recognises that that is what sells its papers.

Oral Answers to Questions

Debate between Meg Hillier and Lord Vaizey of Didcot

Thursday 5th September 2013 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I represent Shoreditch, which has a reputation for being a very connected, tech-focused area of London, yet I am inundated with complaints from businesses and residents about the problems of physical connectivity, the time it takes to make the connection, and particularly about the virtual monopoly of BT Openreach, the charges it makes, and the service it provides to businesses such as Perseverance Works. Will the Minister meet me to discuss this and see what can be done to make sure that we have proper connectivity in Hackney?

[Mr Vaizey]

Of course I will meet the hon. Lady to discuss it. However, as regards BT’s so-called monopoly, it is important to stress that BT has the lowest market share of any incumbent provider in any major European country. BT Openreach is open to all providers, such as TalkTalk and Sky. We have some of the lowest broadband prices in Europe, and we should celebrate that.

--- Later in debate ---

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Last week, I had the pleasure of launching Turning Earth, a new ceramics studio that is partly funded through crowdfunding. The Financial Conduct Authority is currently consulting on the future of crowdfunding. Given its importance to the creative industries in my area and up and down the country, is the Department having a serious input into that inquiry and having discussions about what creative businesses need?

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)]

I absolutely agree with the hon. Lady that crowdfunding is an option for the creative industries and the arts. We will certainly be involved in that consultation. We listen to representations from trade bodies such as UKIE, the video games trade body, on crowdfunding.