Digital Economy Bill (First sitting)

Thangam Debbonaire Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[Claire Perry]

Q That rather depends on the sort of small business. While that might be true for a farmer, for example, what I want in my constituency is the ability to have the sort of businesses that would locate to silicon roundabout come to a beautiful part of the country where property is much cheaper. I would be cautious about writing off rural areas as only ever being able to access Government websites and check their emails one at a time. I think we should be doing something much more ambitious with obligations—particularly for small business parks, so you have clusters of fibre around those.

David Wheeldon: We would probably part company with Virgin Media here, in as much as we do not think you should be constraining by type of usage in quite that way. All the history and evidence of the data that goes across our networks means we are seeing a continued exponential increase in data usage. Going back to what Daniel said earlier, it is hard to say that specific usages are worthy of a USO intervention and others are not. Those things will change over time, including small businesses—their use cases will change over time.

In the case of businesses and business parks, it is extraordinary that there are business parks, not just in rural areas but in city areas, that do not have sufficient fibre connections. Very often that is to do with the distortions in the market where it is to the benefit of the network operator to be selling expensive leased lines to businesses rather than investing in fibre to all premises.

When we come down to it, this is a problem based around the quality of the infrastructure we have at the moment and the incentives to continue to invest. As Paul Morris said, it is important that we get the USO right, but it must not stand in the way of the massive further investment we believe is required of the nation’s network.

[Thangam Debbonaire (Bristol West) (Lab)]

Q I am a little shocked to hear Mr Butler say that 10 megabits is okay for the average small business. In my constituency, high-tech industries and digital creative industries need something much more reliable, much more secure and a lot greater than 10 megabits. They are not just uploading the odd film; they are making the films. Can I push you on that? They need secure, reliable, consistent bandwidth. What on earth has blocked the roll-out of that so far in city centres as well as rural areas? What else could the Bill do to push business, provide the infrastructure or give Ofcom the teeth—whatever is needed—to help the high-tech and creative industries grow?

Daniel Butler: This is one part of the market where Paul’s concerns about market distortion are particularly pronounced, because the market for small business connectivity is evolving at a rapid pace. Broadband providers are beginning to target the types of use cases you outlined there: high-tech but small business where, realistically, a leased line is not an affordable solution. Virgin Media has been at the vanguard of product innovations to make symmetric business broadband connections available to high-tech businesses in London, but also outside of London, at more affordable, residential-type price points. This is one example where the market is evolving at a very rapid pace.

Business connectivity is starting to address the challenges you have identified. The use requirements I outline are what the evidence suggests is the typical requirement of a small business. Obviously, there will be outliers where the market is the right mechanism to deliver for those companies.

[Thangam Debbonaire]

Q I am not just talking about outliers, Mr Butler. You talked about providing to London and some areas outside London. London is overheating, with great respect to my London colleagues. A lot of these industries are looking to other cities and if they cannot get what they need they are going to stay put in London—and that is not good for the economy, both rural and urban. What else can be done by business or what else do you need in the Bill for this to be put right?

Paul Morris: As you will know, telecoms has got a lot going on at the moment. There are other things going on: we have an Ofcom strategic review, which is looking, in part, at how the relationship between Openreach works with the rest of the industry. There are a number of moving parts, not necessarily in the Bill, that need to be thought about.

I suggest we need to think about what we do next—that is, post-BDUK. I do not necessarily mean Government programme support, but what the ambition of the country is when it comes to traditional infrastructure. We have probably looked at other traditional infrastructure first; now it is time to look more at digital. That is beyond the Bill but it is something that needs to be done, certainly within this Parliament. We also need to start thinking about delivery because, frankly, that will take 10-plus years to do.

We need to look at the strategic review, including the relationship with Openreach. At least two of us here have that as businesses; frankly, that can be a bit more ambitious, deliver a better service, and be in control of its own investment, board and everything. Openreach needs to be independent. If that cannot work, then we have made the case to say that Openreach needs to be separate from BT. That is something that Ofcom needs to look at.

Within the Bill, the universal service obligation—you have both identified an issue. If you look at the Ofcom figures, small businesses are disadvantaged probably more than consumer households because you are not on the traditional phone network, effectively, if you are in a business park. So you have got the right point.

I would suggest that, with the USO the way it is today, we make a small step in the right direction with this idea of how we do more. I think Dan is right: there are connectivity options coming in as well. So it is a mixed picture, but I do agree—I do not think that 10 megabits is enough for most small businesses, unless of course they are one-person bands doing stuff for which they need the phone more than the computer. Again, it all comes down to a mixture of things going on that are in and around the legislation. There are a number of things going on.

Daniel Butler: I add one final point on provisions in the Bill that would help. There are provisions in the Bill that will reduce the cost of network expansion in the UK—an exercise that Virgin Media is currently undertaking with our £3 billion network expansion. That network expansion is benefiting business parks and small stay-at-home businesses. Last month, we announced 90 new business parks that we were connecting under Project Lightning. The specific way in which the Bill can support that is through reform of the electronic communications code that will lower the cost of and time taken to achieve a wayleave agreement. The measures in the Bill take us part of the way towards that reform, but could be more ambitious.

[The Chair]

Can I remind Members and witnesses to be as brief as possible? I call the Minister.

--- Later in debate ---

[Chris Skidmore]

Q Any comments on, particularly, the public services power, and how that might affect it?

Pete Moorey: No, no specific other comments on the Bill itself.

[Thangam Debbonaire]

Q I particularly direct this question at Mr Moorey, because I noticed you mentioned unsolicited calls and the problem of people receiving them despite registering with the Telephone Preference Service. I can declare that I am one of those. I am particularly concerned about the example of a constituent in a neighbouring constituency to mine, Olive Cook, who was one of Britain’s longest-serving poppy sellers, having started in 1938. She fell to her death after being plagued by nuisance callers, particularly from charities. My experience has been that there are also private companies making them. Who is it? Who makes nuisance calls? How are they being dealt with? Does the Bill go far enough to ensure that those companies are held responsible—the directors, if necessary? Should they be made more accountable? Can you tell me some more, please?

Pete Moorey: We have made a lot of progress, I think, on nuisance calls over the last three or four years. That is thanks to an awful lot of people around this table. The Government have made progress with the action plan that we have had, and then in setting up the taskforce, which Which? chaired. We have seen changes to the powers of the Information Commissioner’s Office, and it is now much better able to take action against nuisance callers, and hit them with bigger fines. Caller line identification has been introduced. However, you are right that there is still an awfully long way to go.

Nuisance calls come from a range of places, all over the place. Frequently they come from claims management companies and lead generators. Sometimes they come from reputable businesses. Sadly, too often they also come from scammers and fraudsters. The important measure in the Bill is putting the Information Commissioner’s code into statute, which I think will give it more clout. However, we agree that more could be done about director-level accountability. We recognise that many MPs support that, as do the Scottish Government. Indeed, the Information Commissioner herself, who I believe you are seeing this afternoon, has made supportive noises about it.

We would like director-level accountability to be introduced. It is important, because while in recent years the ICO has used its powers to fine companies, it has collected only four out of the 22 fines it has imposed in the past year. We are concerned that some of the more disreputable firms simply abolish themselves once they are fined—and they are phoenixing. Directors pop up elsewhere and continue the behaviour of making nuisance calls and sending texts. That behaviour needs to be stopped. We need to ensure that those directors are struck off, and that they cannot do the same thing again.

[Thangam Debbonaire]

Q Is the Telephone Preference Service system now completely pointless? My constituents say to me that they feel completely unprotected by it. Could the Bill do more to strengthen it?

Pete Moorey: It is not pointless. Our research shows that if people sign up to the TPS they usually have a reduction in calls. The problem is that there are too many firms out there that either just abuse the Telephone Preference Service and call people who are on the list, or indeed have consumers’ consent to call them, because, sadly, the customers have incorrectly ticked a box at some point, and thought they were not giving consent when they were giving it. More needs to be done about the data consent issue. I know that the Information Commissioner’s Office is doing more about it.

[Kevin Brennan]

Q So just to be clear, you would welcome amendments to the Bill that would strengthen action, including direct action against directors to avoid the shutting down of shell companies. Is there a case for some kind of aggravated offence where people are on the Telephone Preference Service, or where older people are specifically targeted in such a way?

Pete Moorey: I know there is a local police commissioner who is looking at the issue at the moment—particularly around making scam calls a hate crime. That is an interesting development. There is more that could be looked at in that area. I think a good start in the Bill would be the introduction of director-level accountability.

--- Later in debate ---

[Louise Haigh]

That is a different witness. That is the Open Rights Group.

[Thangam Debbonaire]

I am sorry. I mixed you up with someone else. I withdraw my question.

[Chris Skidmore]

Q Mr Bracken, you were responsible for launching the Government’s data programme when you were head of the Government Digital Service, so I think that some of the measures in the Bill are very much trying to build on your fantastic work when you were setting a vision for transforming the management and use of data within the Government and driving the use of data as a tool when making decisions in Government. Do you have thoughts about your work in GDS and how the Bill is now building on that work? How do you feel that the powers in the Bill will try to unlock some of the opportunities for better use of data?

Mike Bracken: Obviously, I am here as a member of the Co-op, so I am not going to give a review of my time in Government.