Consumer Rights Bill

Philip Davies Excerpts

Monday 16th June 2014 Commons Chamber

[Stella Creasy]

My hon. Friend has just illustrated why I believe him to be the expert on this issue. I hope that he will contribute to the debate to explain why this concern about independent advice is so important. He is right about upholding the need for independent advice.

I am conscious that other Members wish to speak in this debate, so let me say a little about net neutrality, and our amendment to amendment 19. I recognise that this is a new and evolving debate. Our discussions have ranged from the Victorian bill of sale to the contemporary net neutrality, both of which reflect this stress over conflicts of interest. For those Members of this House who have not yet had the chance to watch the viral videos about net neutrality, let me explain the concern. Net neutrality is the principle that internet service providers and Governments should treat all data on the internet equally. They should not discriminate or charge by user, content, site, platform, or application. In layman’s terms that means that, whether we are looking at iPlayer, Sky on the Go or Netflix, there would be equal access to services. There would be no speed differential in accessing them.

In America, some broadband and internet providers have been exploring the idea of charging companies different rates for providing their services. That means that they could offer access to some websites at a faster rate than others, and therefore change the way in which consumers access them. The fear is that that would create a two-tier internet, because it will limit the number of sites that consumers can access with ease, and the number of companies that can access and operate services equally. In particular, if large companies were to use their financial muscle, or their internet provision, to restrict access to their competitors or to new entrants to the market, it could limit creativity and innovation in the provision of services. An internet without net neutrality moves huge market power to those who are the gatekeepers to our online services. It is little wonder that 100 companies, including Google, Facebook, Twitter and Amazon, have expressed concern about this issue. Indeed, “father of the internet” Tim Berners-Lee, who was rather unfairly described as a web developer recently, has argued that there is a real concern. He says:

“Unless we have an open, neutral internet we can rely on without worrying about what’s happening at the back door, we can’t have open government, good democracy, good healthcare, connected communities and diversity of culture. It’s not naive to think we can have that, but it is naive to think we can just sit back and get it.”

We welcome the amendment that has been tabled by the hon. Member for Shipley (Philip Davies), but we are concerned that the way in which it has been drafted may inadvertently imply that those sites that are providing pay-per-view services, such as Netflix, would be required also to provide access to some of their competitors, and I am sure that that was not what he intended. We have tabled a clarifying amendment to make it clear that we are talking about those services that provide access to the internet, rather than content.

It would be useful to hear from the Minister about what discussions she has had with her colleagues on the issue of net neutrality and about what action she is taking to ensure that consumers’ interests in the operation of net architecture are being upheld so that we do not have the concerns and challenges experienced by America. In particular, does she feel that existing protocols are strong enough to protect the interests of consumers and avoid competition issues between content providers, and has she done an assessment of the impact on consumers in the UK of a possible two-tier internet?

We have here some very different but interlinked issues around conflicts of interest, freedom of markets and consumer interest, and an effective piece of consumer rights legislation should provide consumers with the tools with which they can mount a challenge to any of them. We hope the Minister will accept our amendments in the spirit in which they are intended, which is about applying clarity in what is meant to the list of unfair contract terms that would give consumers the right to challenge issues in court. I therefore hope that the House will support them accordingly.

[Philip Davies (Shipley) (Con)]

I seek to restrict myself to speaking to amendment 19, which I tabled. I am grateful to the hon. Member for Walthamstow (Stella Creasy) for what she said and for her general support for the thrust of my amendment. In the spirit of that cross-party co-operation, I should also make it clear that I am perfectly happy to support her amendment to my amendment. It is not my intention to press my amendment to a Division, but if the hon. Lady decides to press hers, I will of course support her, because her amendment does exactly what I intended my own to do. I hope that it will not come to that, because I hope that the Minister will make it clear that the Government accept there is an issue, understand it and say that they will do something to resolve it. If that is the case, I hope that the hon. Lady will withdraw her amendment, but we should wait to hear what the Minister has to say before we make any decisions along those lines.

Over the past 30 years, competition in the telecommunications industry has gone from a monopoly, through a duopoly to what is widely regarded now as one of the greatest success stories of privatisation, with the UK having one of the most vibrant and competitive markets in the world.

Additionally, the internet has become an essential part of our national infrastructure, transforming the way we work, play, gather information, communicate and trade. The internet provides the underlying infrastructure for many thousands of businesses and has slashed the cost of global communication.

In 2010, the Government, through the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), said that they were supportive of open internet, which I hope is still the case. The reality is that some major fixed-line internet service providers and mobile network operators have not participated with the major industry-level agreement towards meeting that objective.

The success of the internet is based on global interoperability—the ability for anyone to interact with any legal internet site anywhere in the world. That has created new opportunities, businesses and jobs, while also reducing costs for consumers. I hope that both sides of the House will agree that an open internet is vital for the future economic, social and political health of our nation. New services are coming online at an incredible rate, and it is important that this vibrant sector is able to develop as society becomes more mobile and people’s habits change.

It is vital that organisations controlling access to the internet do not abuse their position by discriminating against legal services, data, traffic and content for commercial or political purposes, and from a protectionist perspective. Although telecommunications providers should be allowed to use certain traffic management techniques to manage the integrity of their network, it should not be at the detriment of rival services purely for anti-competitive reasons.

Over the past year, I have been made aware of increasing evidence that certain internet service providers are undertaking various marketing and operational practices that are distorting a competitive market, creating consumer harm, hurting a number of specific internet industries and stifling innovation. The activity includes blocking internet services that compete with their own on purely commercial grounds; not communicating to customers clearly at the point of sale that they offer only restricted access to the internet; and refusing to participate in the Government-supported pan-industry code of practice, which seeks to uphold open internet principles and which has been signed by some of the largest players, including BT, O2, Sky and 3. I believe that that verges on mis-selling. The lack of transparency and clarity that has persisted in the market has allowed consumers to be deceived by the practice of selling internet access when in fact significant parts of the internet cannot be accessed under the terms and conditions of some price plans.

It seems like the voluntary ways of ensuring greater transparency in providing internet and telephony services have failed. There have been clear examples where certain operators, particularly in the mobile sectors, have misled their consumers by claiming to offer internet access, or UK internet, when some legal internet services are not available within the package that has been provided. In other cases, the small print—when I say small print I mean it, as one would need binoculars to see some of the terms and conditions—outlines extra costs that the consumer would face if they dared to use the internet they have paid for to access services that compete with their provider’s own.

The fact that any operator is able to offer a product advertised with “internet access” and only have to clarify this policy in the small print is unacceptable. Unknowing customers who use popular services such as Skype, WhatsApps or Viber could see their service suspended but continue to be held responsible for paying their bills. That lack of transparency and clarity on these issues is totally unfair to these unknowing customers, and it continues, as consumers are in many cases unable to leverage competitive pressure because it is difficult to understand whether or not certain traffic types are allowed, blocked or just charged additionally. Ofcom’s consumer guide on internet traffic management from 2013 outlined the fact that consumers were not aware about traffic management practices undertaken by internet service providers and whether such practices would affect specific internet services that they used. How can consumers make an effective and informed choice if they are not fully aware of the practices of their internet service provider or mobile provider, and the potential of those practices to inhibit certain services?

[Dr Julian Huppert (Cambridge) (LD)]

The record will show that the hon. Member for Shipley (Philip Davies) and I do not agree on many issues, but on this one I agree with him completely and utterly. He and I are supporters of the Internet Telephony Service Providers Association, which has had many concerns about abuses in this area. Does he agree that we are talking not just about transparency, but about setting a fundamental rule that such bias simply cannot be allowed? Does he agree that we should support net neutrality throughout and not simply tell people when it is being broken?

[Philip Davies]

It is a red-letter day for me when the hon. Members for Cambridge (Dr Huppert) and for Walthamstow agree with me. I could not have envisaged such cross-party support, and if the Minister is able to withstand that I will be disappointed. We have a political consensus, of which I am usually very suspicious. I agree with the hon. Gentleman that the principle of net neutrality is the most important point. It is not simply a question of transparency; transparency is the minimum that people can expect. With my amendment, I am trying to ensure that we have net neutrality and truly open access to the internet, and to put an end to protectionist and restrictive practices that are against consumers’ interests.

I am referring to services including voice over IP, which is similar to Skype. Voice over IP allows consumers significantly to reduce their phone bills by using voice over the internet, instead of their mobile provider’s phone minutes and messaging services that use mobile data rather than text. It is especially important for consumers that that market works efficiently given Ofcom’s research finding that a quarter of the UK’s poorest households are mobile-only and are wholly beholden to mobile operators’ tariffs to enable them to access crucial services.

It seems perfectly reasonable to me that if a consumer signs a mobile phone contract that offers internet access, he or she should be entitled to use any legal internet service that they deem fit, not just the parts of the internet that suit their mobile phone company. I hope that hon. Members understand that customers who buy a mobile phone package rarely have the time or inclination to read through all the minutiae in the small print, even if they have the foresight to imagine all the services that they might want to use over the two-year life of their contract. Surely, customers have the right to expect that an internet service will do what it says on the tin. Consumers should, therefore, be able to rely on statutory consumer protection regulations to protect them from such abusive practices.

Given the rapid evolution of the internet, I do not think that it would be wise for Parliament to attempt to define everything that the internet is and does for the future, but I am convinced that the current unfettered ability of telecommunications providers, whether they be internet service providers or mobile operators, to decide what customers can and cannot access is harmful to consumers and to the wider economy. As I have outlined, those practices not only create significant consumer harm but stifle competition—for example, in the market for non-geographic and international calls—which leads to exorbitant prices and discourages new entrants to the market.

There is also concern surrounding future innovation and economic growth. If innovators have no certainty that networks will carry their services, particularly if they rival products offered by the networks, companies will be less likely to invest in new services because the return on investment will be unpredictable. How can a provider who wants to build a mobile app have any certainty that the mobile network operator will not block his rival service and/or make it extremely opaque at the point of sale whether consumers can actually access those services? Such things should be of great concern to us, because they will stifle growth in a sector that is incredibly important to the future prosperity of the country.

When I asked representatives from Ofcom about the matter during a Select Committee on Culture, Media and Sport hearing last summer, there was an acceptance that some undesirable blocking was being undertaken by certain mobile operators around specific internet services, and that more needed to be done to ensure that telecommunications providers were transparent and up front with their customers. Ed Richards, the Ofcom chief executive, outlined the industry voluntary code on the transparency of information given to consumers about traffic management practices. I have grave concerns about whether the information that providers are supplying to their customers is helping in any way, shape or form. Ofcom’s research in September 2013 demonstrated that consumers were not aware about traffic management practices when making their purchasing decisions.

Together with the internet code around transparency, the industry has created a voluntary self-regulatory code on maintaining the open internet. I believe that the code is a good one, and it will be an effective tool for protecting consumers and businesses. The significant problem is that some major providers are yet to sign up, nearly two years after the launch of the initiative. Given that there is no obligation on UK telecommunication providers in that area, those providers that are transparent and allow access to services could easily change their minds tomorrow and not be subject to any action.

Therefore, I think it is time that the House recognised that unless more action is taken, certain industry players will continue to use clever marketing tactics and rely on the lack of consumer understanding to mislead their customers, distort the market and damage new and innovative internet services that threaten their own products. That is why I have proposed amendment 19, which would protect consumers from the practices that I have described. The amendment would ensure that anyone selling internet access, or using any similar term, will not be able to rely on any unreasonable or unusual definition of that term to restrict their customers’ access to legal parts of the internet.

I have made it clear, and I am grateful to the hon. Member for Walthamstow for doing the same, that I do not seek in any way to limit the ability of internet service providers to block access to sites for the purposes of child protection. Nor would my amendment prevent internet service providers from offering age-related content blocks where customers request them. I certainly would not want to do anything to change that. That is why I would be happy to support the hon. Lady’s amendment if she seeks to divide the House.

Amendment 19 would give customers confidence that when they sign a two-year contract that offers internet access, they will get full internet access and will not be left with a contract that they cannot get out of that does not do what they thought it would when they signed up to it. It is essential to preserve and protect consumer access to the legal internet. We cannot allow internet service providers to decide for themselves, based on their own commercial interests, what customers can and cannot access while still marketing their service as internet access.

The protection offered by amendment 19 would benefit all consumers, but it would also spur innovation, growth and job creation in a sector that is vital for the future prosperity of the country. Therefore, I urge hon. Members to support my amendment or the amendment tabled by the hon. Member for Walthamstow. I hope that we will not have to press the matter to a Division, because I hope that the Minister will understand the strength of the case that we have made and reaffirm that the Government will deliver on open internet access. If she is not prepared to do that, I hope that the hon. Member for Walthamstow will press her amendment to a vote, which I would support.

[Helen Goodman]

I would like to congratulate you, Madam Deputy Speaker, on your recent damehood. I know that a knighthood is a real thing, but I am not sure whether a damehood is a thing. However, it is a very well deserved recognition of your excellent service to the House over many years, and I am sure that all hon. Members were delighted to hear the news.

This is a marvellous occasion for another reason. It is wonderful to be in the Chamber in agreement with my hon. Friend the Member for Walthamstow (Stella Creasy) and the hon. Members for Shipley (Philip Davies) and for Cambridge (Dr Huppert). That is a fantastic coalition, and it shows what a beacon of free speech the House of Commons is, because that principle has motivated everybody to get involved in the debate. I believe that the principle of net neutrality is the principle of free speech in the modern world. My hon. Friend set out a clear and cogent case for amendment (a) to amendment 19, and the hon. Member for Shipley proposed amendment 19 comprehensively. I shadow the Minister with responsibility for communications and creative industries, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), and I hope that the Minister at the Dispatch Box, the Under-Secretary of State for Business, Innovation and Skills, has had some conversations with him since, in many ways, this issue falls into his bailiwick.

Let me elaborate a tiny bit on what my hon. Friend said. Net neutrality is absolutely central to the operation of the internet. The principle that there should be no discrimination between services when providing internet access is fundamental to an open net. At the moment in this country we have no legislation, but we have a voluntary industry code of practice for internet and mobile service providers. However, the problem is that as it is voluntary the companies do not have to abide by it. European Commissioner Neelie Kroes has been working on proposals for net neutrality across the European Union as part of the single telecoms package. I was disappointed that the hon. Member for Shipley did not highlight that excellent proposal from the European Union, but we do not need to wait for the European Union to have this debate or to ask the Government what they are doing, because the issue is a central one.

The possibility of amending the Bill was brought to my attention by ITSPA, the Internet Telephony Services Providers Association, which is concerned that some internet providers have an interest in refusing to carry voice-over IP services because they have a competing product. Having discussed the question with Ofcom, I am not clear whether that is happening. If it is, it should not be, and if it is not, there is a risk that it might happen, and we in this House need to address that.

The point made by the hon. Gentleman about the lack of transparency and consumer awareness is extremely concerning. There is a problem when people buy a piece of kit or take out a contract with one ISP or mobile phone provider if, in doing so, they restrict their access to some material and if there is no description or warning of that. That is clearly a limitation of their access to information on a free net.

Ofcom is working to improve the effectiveness of the code of practice on traffic management transparency. My view is that transparency is not enough and that we need rules of the game that go beyond it. I am not convinced that even if the information was on a strapline across the packaging when people bought a piece of kit or signed a mobile contract they would fully realise what it meant. This is too important to leave simply to transparency, which is why I have put my name to amendment 19 and why I support these changes.

The Minister needs to tell the House what the Government are doing proactively to preserve net neutrality. It is not enough to take a reactive stance, as the Government are on many communications issues. The Communications Act 2003 is a very good Act, but it is getting out of date and this is one example of that. That is why we were particularly concerned to have this debate in the House today so that we could find out what Ministers are doing.

It is essential that we preserve free speech on the internet and net neutrality is part of that. There is a small exception in amendment 19 to enable us to continue with child protection—again, we have cross-party agreement on the importance of child protection—but we are all agreed that we want net neutrality, with that single exception, to be the modern form of free speech.