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4 Mar 2003 : Column 709—continued
'and, in particular, the desirability of encouraging investment and innovation so as to secure the availability to users of electronic communications networks of services of ever greater bandwidth;'.
Amendment No. 151, in page 3, line 39 [Clause 3], at end insert—
'(gg) the position of employees in the industry;'.
Amendment No. 187, in page 4, line 3 [Clause 3], at end insert—
'(n) the impact of developments in relevant markets upon creators and performers.'.
Government amendments Nos. 217 to 221.
Amendment No. 188, in page 11, line 24 [Clause 11], at end insert—
'(5A) In appointing persons to be members of the Content Board, OFCOM must also secure that certain members have experience to represent the interests of the creators and producers involved in the programme and music to be included in the services relevant to the duties of the Board.'.
Amendment No. 189, in page 13, line 6 [Clause 12], at end insert—
- '(6A) The power of OFCOM to authorise the establishment of a Committee or Panel by the Content Board includes power to authorise the establishment of a Creators Panel, including persons from the United Kingdom music-creating community.'.
Ministers have said that they are committed to a fast and efficient roll-out of broadband. The Government's target is for Britain to have the most extensive and competitive broadband market in the G7 by 2005—a target set by the Secretary of State herself when she was the e-Minister. In pursuit of that, the Government have promised to work to ensure that broadband is accessible in all parts of the country. They claim to have developed a strategy to achieve that goal and to measure our success. Unfortunately, the strategy is not yet working as effectively as everyone would wish. As the CBI points out,
- "lack of competition in the telecommunications market has stalled investment in the required infrastructure".
There is immense frustration that the Government are talking a good game while doing very little to deliver on their promises. The CBI states that Britain lies sixth among the G7 countries in terms of broadband connections and that few small and medium-sized enterprises are yet connected. According to the broadband stakeholder group, only one household in 25 is currently subscribing to broadband. Fewer than one household in every 30 that has a computer is hooked up to a broadband service, and in the business community, among firms employing more than 10 people, fewer than one in five has a broadband connection. In January this year, only 1.4 million households and businesses were connected to a broadband service. According to Oftel, Britain has only slightly more than half as many lines connected to broadband per head of population as Germany and just over a quarter as many as Sweden.
Of course, broadband is not yet attractive to everyone. Some users are content with lower speed and a lower price, but broadband offers such potential to enhance knowledge and deliver competitive advantage that I believe that it will not be long before it is as much a part of national infrastructure as the road system, the railways, mains drainage and telephones—
Mr. James Paice (South-East Cambridgeshire): And in a better state.
Mr. Yeo: As my hon. Friend says, we hope that it will be in a better state than the roads or railways.
It is the Government's job to create an environment in which broadband services are widely accessible. A critical part of such an environment is effective competition. The House will be aware that broadband is not synonymous with ADSL—asymmetric digital subscriber line—technology, but can be delivered by ADSL, cable, wireless or satellite. In this country, ADSL
is associated with BT, whose subsidiary, BTopenworld, has roughly 50 per cent. of the market of retail broadband services based on ADSL infrastructure.Technology changes and develops in unpredictable ways, so it would unwise for the Government or even the Opposition to be prescriptive about the form of broadband distribution that is used. In Britain, we are fortunate, as distribution is not confined to BT. Ntl and Telewest also provide cable modem services, although only to a minority of households.
In spite of Oftel's optimistic comments, it is worrying that the Government's targets are still not being met. There is a lack of clarity in the institutional and competitive framework that the Government have created, and their failure to create an adequate competitive environment is damaging. Actions and legislation that seek merely to promote broadband without regard to how that should be done are insufficient. The Government should have a duty to promote competition and reduce regulation.
Mr. Mole: Does the hon. Gentleman agree that, in requiring BT to carry out the local loop unbundling exercise, a framework was created for competition in the provision of broadband services in the local loop? The difficulty was that after the delay of carrying out the exercise, there was no apparent demand from other suppliers to act as competitors through the local loop.
Mr. Yeo: The other suppliers might say that that had something to do with the terms of availability. In any event, I do not think that the speed with which BT addressed that objective is a cause for much congratulation. Different people will attribute to a variety of reasons the failure to develop a more competitive market more quickly.
The preamble of the American Telecommunications Act 1996 sets out a purpose that the House should take to heart. I have incorporated the words of that preamble into the new clause. The promotion of competition is an essential ingredient of a successful telecoms policy, especially when one major provider is a former state monopoly. The role of the regulator is to introduce conditions for a fair, open and transparent market, particularly where there has previously been market failure. Regulators must be free from day-to-day political interference and should not form part of the central planning apparatus of government.
Under Labour, Oftel's cutting edge has been eroded and its accountability reduced. Ministers have done that through the creation of the new and separate office of the e-envoy in the Cabinet Office—a typical prime ministerial initiative that owed more to spin and optimism than to analysis or hard work. Like many such initiatives, the e-envoy initiative is not proving conspicuously successful. The House will recall the fanfare that was given when the Small Business Service was set up in April 2000 under a chief executive whom we were told had direct access to the Prime Minister. Two years later, after heavy spending and little delivery, that privilege was quietly withdrawn.
The House will also recall the Prime Minister's endorsement of heady recommendations of the Cabinet Office's performance and innovation unit for the ill-named Consignia. Today's reality is a shrinking post
office network, the withdrawal of cash payment benefits and a charge card that post office staff are unable to process. Similarly, the reality of the UK's broadband roll-out under the e-envoy initiative is a constricted footprint and lamentable take-up—the consequence of the Government's conviction that institutions and former state monopolies are better at delivering economic dynamism than commercial undertakings operating in liberalised markets.The Government's approach can be seen in their grant of £30 million for broadband to the regional development agencies. According to the Secretary of State, her largesse was given so that
- "a digital divide in high speed Internet access does not open up between urban and rural communities."
The RDAs are the last bodies that the Government should use. The futility of their efforts is illustrated in a test project named RABBIT—remote area broadband inclusion trial—that aims to tempt remote broadband users through a £700 grant to identify alternative sources of broadband supply whose prospects of success are uncertain. Instead of more rabbit stew, the Government should create a more competitive environment to encourage new entrants to the market. They should entrust the regulator with a remit to protect against market abuse until a competitive market evolves. It is for the regulator and not the e-envoy, and certainly not the RDAs, to protect users and consumers of national services and utilities and to stimulate national competitiveness. It is for the regulator to encourage progressive liberalisation of the marketplace to bring about universal access and a uniform and transparent tariff.
My right hon. Friend the Member for North-West Hampshire (Sir George Young), whom I see in his place, has identified BT's jealousy as an impediment to progress and pressed for greater transparency. Like other former state monopolies, BT honed formidable skills for protecting its interests. It is aware that opening up consumer access to broadband services potentially opens up access to its own competitors. It focuses on how it can meet the demands of the Government and the regulator to expand the service while ensuring that that is done not only at high profit levels, but in a manner that deflects the challenge from competitors.
I believe that the Government should restore the authority of the regulator. The regulator should impose a regime of greater transparency on BT, which should provide clear forward plans for its national ADSL footprint and reveal which exchanges are to be ADSL enabled and how many telephone connections they have. BT should explain the financial criteria and broadband targets by which such decisions are made. It should speed up the provision of unbundled loops and shared line access and the release of wholesale products, and targets should be published for those goals.
Without that transparency, the public will be disadvantaged. People cannot plan broadband investment through a cable network or alternatively through wireless or satellite. Business and individuals in rural areas and out-of-town communities are losing out. All that information would help individuals, businesses and community groups to make sensible decisions. It would help firms with competing technologies in broadband supply to fine-tune their investment criteria, attract funding and identify market openings. That information would build market confidence and stimulate competition in both ADSL itself and in respect of alternatives. It would encourage liberalisation of the market, which would lead to expanded choice and lower prices for service users throughout Britain.
Universal broadband access will drive economic growth and reduce rural isolation, and could slow the drift of employment and population to the south-east. It will help businesses large and small nationwide and enhance Britain's competitiveness. Due to the market-distorting actions of the Government, remedial action is needed. The new clause would impose a duty on the Government to promote competition in order to secure lower prices, increase choice and higher quality services for users of broadband services in the UK. I commend it to the House.
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