Chi Onwurah
Main Page: Chi Onwurah (Labour - Newcastle upon Tyne Central)
Rory Stewart
My hon. Friend makes a very good point.
My argument is about mobile broadband coverage. What is the argument against extending it in the way that I have suggested? It is cost. Ofcom’s only argument is that it is worried that it might make a little less in the auction. Let us say that, based on the Swedish and German models, the auction is going to generate about £3.215 billion. Ofcom is worried that it might make only £3 billion. For a number of reasons, that is probably an underestimate. That £215 million represents an absolute worst-case scenario. Let us look this directly in the eye: £215 million is less than we spend in three weeks on our operations in Afghanistan. In fact, mobile coverage is one of the smartest, cheapest forms of infrastructure investment that we can make. It is far cheaper than fixed telephone lines, and far cheaper than ports or roads. As far as infrastructure investment that would create real productive growth in the British economy is concerned, £215 million is a small sum of money.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Could the hon. Gentleman give me some clarification on the figure of £215 million in lost revenue through a change in the coverage? What is the basis for that estimate, and have the providers supported it?
Rory Stewart
It is a very basic estimate predicated on the assumption that, to increase from 95% to 98% coverage, we would need to build approximately 1,500 masts, and that the average cost of a mast hovers at just under £150,000. So the figure of £215 million represents a worst-case scenario. The assumption is that the mobile phone companies will cover some of the costs of the masts anyway, because they will get increased revenue as a result of installing them. The Government should not have to pay for all those masts. Furthermore, companies such as Three already have the infrastructure in place, and were those companies to win that chunk in the auction, they would not have to pay to install new masts. The £215 million is a worst-case projection for getting up to 1,500 extra masts and pushing through to 98% coverage.
Are we prepared to turn around in 2015 and say to people in this country and people in our constituencies, “No, everybody else in the world can have this thing, but you can’t have it. In every other part of Britain, if you happen to live in central London, you will be able by 2015 to attach a device to your heart, which can monitor your vital signs, transmit in real time to a hospital, regulate your drug intake and help you stay at home. I am sorry, though, but you live in Northumbria and you are not going to be allowed to have it”?
Are we prepared to turn around to students and say, “Everywhere else in this country, if you happen to live in Chelsea or the centre of Manchester, you can do online learning, you can learn the harp, you can study German or Russian. In fact, you can study anything you want from anyone you want at any time you want, but unfortunately you live in Suffolk, so you are not going to be able to do those things.”?
By 2015 it will not be just data-rich businesses or internet-rich businesses, but the basic small and medium-sized enterprises that will be dependent on these devices to cut their transaction costs, increase their reach to market, drop their advertising costs and so on. Are we prepared to turn round to every one of those businesses and say, “Of course it is extremely beneficial for a business to have these services—in fact, it is the only way a business can compete and survive—but because you don’t happen to be located in the very centre of London, you are not going to be able to work in that way.” ?
Are we to say to a farmer, “Through this technology, you might be able to use special identification tags and make some use of the astonishing bureaucracy being imposed on you, but only if you happen to be farming in Chelsea. If you are farming in the uplands of Cumbria, you might as well forget about it.”?
We are looking for a positive narrative. We are looking for a narrative around growth. We are looking for growth, which is not effectively saying, “Oh, we are just going to get 90% of the country going”. We are looking for growth that is saying, “We want 100% of this country going.” Growth is about productivity; productivity is about the internet. If we are looking for a positive narrative, let it be this: at the moment, our best mobile next-generation coverage is worse than that of Uzbekistan. I know something about Uzbekistan. I would not be surprised if someone were to stand up and say to me, “In Uzbekistan, there are more political prisoners in jail than there are in Britain”. However, I am not just surprised, but horrified to learn that in Uzbekistan, the mobile next-generation coverage is better than it is in the United Kingdom.
Let us stand behind this motion. Let us push Ofcom with all our might to take that small risk to reach that 98% of coverage. Let us not allow the clever arguments of narrow economists who are blind to technology and obsessed with making their auction feature in a particular fashion allow Britain to miss the chance to get what it needs for its economy, for its society, for its health, for its education and for its communities by signing up to the best superfast mobile and broadband coverage in Europe.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I congratulate the Backbench Business Committee on securing this important debate. I know personally how difficult it can be to interest hon. Members in technical subjects. It is to the credit of the hon. Member for Penrith and The Border (Rory Stewart) that he has been so successful in communicating the critical nature of our broadband infrastructure and the importance of the coming spectrum auction.
I declare an interest: before being elected I worked for the telecommunications regulator, Ofcom. [Hon. Members: “Hear, hear”.] I thank hon. Members for that! Before that, I worked for 17 years in telecommunications in the private sector. I was personally most grateful for the rise of the internet because it finally enabled me to explain what I did for a living when I was working on an “integrated services digital network private branch exchange”, which was double Dutch to most people. Being able to say that I was helping to build the internet meant that my friends and family could finally have confidence that I had a legitimate occupation.
Of course, we have far more important reasons to be grateful to the internet, some of which were mentioned by the hon. Member for Penrith and The Border; others will doubtless be raised during the debate. The internet is well on the way to becoming a necessity rather than something that it is nice to have. For some, the transition has already taken place. According to the Federation of Small Businesses, 90% of its members use the internet in running their businesses, and a third of those think that the broadband speed is reducing their productivity. That is a real indictment of the current level of broadband provision. If broadband is such a necessity, why have the Government delayed the provision of universal access until 2015?
I welcome the motion’s emphasis on the importance of broadband, but I want to focus on the part that calls for the mobile auction coverage requirement to be extended from 95% to 98%. I could talk for a long time about the strengths and importance of broadband, but I want to focus on that specific technical area, because it is in that regard that I fear that the objectives of many Government Members may not be realised
Ofcom is not primarily concerned with raising revenue, as the hon. Member for Penrith and The Border suggested. Its primary aim, generally and as set out in the directive, is to maximise competition. If pressure is being placed on Ofcom to consider the amount of revenue raised, that pressure is coming from the Government. Ofcom is consulting on a 95% coverage requirement because that is the coverage that mobile operators feel they can achieve without significant additional investment. It is about putting equipment on existing base stations rather than building new ones. Considerable costs will still be incurred, because the equipment is costly, but Ofcom has judged that the cost will not prove prohibitive to the private sector business case. I am sure that Members on both sides of the House recognise the importance of a valid business case to investments in the private sector. However, extending coverage to 98% would increase the cost considerably. I was interested in the estimate of £250 million from the hon. Member for Penrith and The Border. I note that the Ofcom consultation specifically avoids giving an estimate, on the basis that the modelling is too complex and time-consuming to undertake at present.
One thing that should be emphasised is the importance of getting the spectrum out there as quickly as possible. We do not want to spend too much time on network economic modelling. However, we must also recognise that adding a line to a licence requirement will not get that equipment out into the field; nor will it get mobile broadband into Members’ constituencies. We need to ensure that private sector companies are properly incentivised.
Increasing the mobile coverage requirement may well reduce the Treasury’s income. I agree with the hon. Member for Penrith and The Border that that would be a reasonable price to pay if we could be sure of the results, but there are two main concerns. The coverage requirement is for 2017. That might seem a long time to wait—indeed, to small businesses painfully watching the hated Microsoft hourglass turn it must seem an eternity—but it is worth noting that the 3G coverage requirement, which was for only 80%, was not met until seven years after the auction. Can the rural small businesses of this country really wait so long? The Government have apparently committed themselves to providing universal broadband by 2015, but that leaves us still four years away from a decent broadband service for all.
Andrew Bridgen (North West Leicestershire) (Con)
I hate to break up the cosy consensus, but I am going to anyway. I understand that the Opposition are claiming in the media that they could deliver broadband roll-out both faster and at considerably lower expense than proposed by the coalition Government—indeed, £200 million less. Can the hon. Lady tell the House of any project at all that the Labour Government delivered both on time and on budget, let alone in reduced time and at reduced budget?
Chi Onwurah
The previous Government committed to providing universal broadband access at 2 megabits by 2012, whereas it is my understanding that the current Government have made a commitment to the best broadband—there is some doubt as to the exact definition of that term—by 2015. Our project was to be implemented not by the Government, but by the private sector, and with the right incentives. It was not only fully planned, but fully costed, and had the support of the vast majority of the telecommunications industry, who agreed that it was feasible. The current proposal to deliver superfast broadband by 2015 is, however, not fully costed, as I am sure broadband companies would set out in detail.
The coverage obligations do not match private sector business cases, and, unfortunately, are a very crude and ineffective way of correcting what is, effectively, market failure. There will be a cost to the public purse, but unlike in a directed programme, we will not have any say as to how that money is spent; so the Treasury will lose money, but we will have no guarantee or say as to how it is invested.
Rory Stewart
What does the hon. Lady think of the simple proposal to set out the number of additional masts required? If Stephen Temple were to propose that there should simply be, let us say, 1,500 additional long- term evolution masts, rather than setting a 98% coverage target, that would be much simpler to measure, there would be no debates about how exactly the plan would be modelled, and costs would be much more straightforward.
Chi Onwurah
I am delighted that the hon. Gentleman has launched himself so deeply into the detail of network infrastructure roll-out. I hope the vast majority of Members on the Government Benches would agree with me that we do not want to specify to private companies exactly how they must roll-out their infrastructure, the number of masts they will need to put in place, the equipment they should use, or the technology choices they should make. I would not therefore support specifying the number of masts, although that is an interesting proposal.
Specifying the coverage is a useful way of trying to ensure efficient roll-out, but my concern is that if the coverage that is specified does not accord with the good and effective business case, there will be unintended, and potentially perverse, consequences.
Duncan Hames
One consequence would be a cross-subsidy from those—perhaps in urban areas—who enjoy low-cost services to those of us in other parts of the country who might not, but who would therefore be able to share in the network. Given that we support such consequences in respect of the Royal Mail universal service obligation, why should we not support them in the context of broadband or mobile coverage?
Chi Onwurah
My party is known for supporting redistribution in many areas and we would certainly support cross-subsidy, which is effectively the result, if that were the only consequence. When I speak of unintended consequences, I am suggesting we might not, perhaps, get the optimum mobile coverage within three years or one year because the coverage requirement is for 2017, which might concentrate the minds of the mobile operators on that date.
Rory Stewart
Will the hon. Lady clarify what she proposes to do to ensure that an additional 3 million people get coverage?
Chi Onwurah
I thank the hon. Gentleman for asking that; I have very little time left, so I shall race to that point. The most effective way for a Government to intervene in a market is to direct subsidy in the most effective way possible to incentivise network coverage in the areas it is required. I suggest to hon. Members that rather than hiding behind indirect intervention through the regulator and blaming the regulator’s short-sightedness, we should clearly set out that we want universal access to standard broadband for all by 2012 and we should ensure that we have the means to achieve it.
Andrew Griffiths
My hon. Friend is exactly right, and at a time when we have a global economy and the internet provides access to employment, contracts and business, it is simply unacceptable for people to be denied that facility. I know that the Minister is passionate about the subject, but we desperately need to see some movement forward.
In opening the debate, my hon. Friend the Member for Penrith and The Border talked about the trade-off between the auction price and the cost to UK plc as a trading organisation. If we asked people in my constituency about that trade-off, I think they would say, “Give us faster broadband now”. I hope that the Minister is receiving that message loud and clear.
We talk about rural broadband, but in my constituency there are villages such as Anslow and Tatenhill that are only 1 mile or 1½ miles outside the central Burton area but whose internet access is incredibly sporadic or in many cases non-existent.
Chi Onwurah
The hon. Gentleman has spoken eloquently about the impact of slow broadband on his constituents. If he asked them, would they say they wanted universal broadband coverage by 2012 as the Labour Government proposed?
Andrew Griffiths
The hon. Lady asks an interesting question. I think they would say, “We want faster broadband, and we want it now”. We all understand that feeling.
It is incumbent on BT in particular to focus on what it can do to extend coverage to people who are at the end of the line. Villages such as those that I mentioned, which are tantalisingly close to the exchange, should get better broadband provision.
Has the Minister considered whether the legislation on the unbundling of the local loop needs revisiting? Should we not say that if BT cannot provide a service from exchange to cabinet and cabinet to home, we should open it up to competition and allow other providers to do it? I do not think my constituents care who provides the line; they just want access. Is there a case for considering whether other providers could do that faster and more effectively? That is not to criticise BT, because I know it is doing its level best, but the current situation is hampering the UK economy and having an impact on people’s quality of life.
Once again, I congratulate the Backbench Business Committee and my hon. Friend the Member for Penrith and The Border on bringing forward such an important debate.
Tim Farron
My hon. Friend makes an excellent point. The need for such communications is greater for people in rural areas than for people in urban areas.
The current situation in my constituency is that many areas have access to pathetically slow broadband speeds. I pay tribute to Colin Barr and the team from Colton parish council, whose study showed that 45% of people in the High Furness local area could access no more than 0.5 megabits per second. Our communities and their MPs will not tolerate that. That is why I am so proud that our communities in Cumbria, and South Lakeland especially, are choosing to make their own luck. I pay tribute to the folks in Colton, Hutton Roof, Grasmere, Beetham, Kirkby Lonsdale and Upper Kent, and to the team from Fibre GarDen who ensure that we can deliver superfast broadband to Garsdale and Dent. They show a vision that UK plc—I am not aiming criticism in any specific direction—has so far not matched. This debate is about demonstrating that the House of Commons stands behind them in solidarity.
We must show ambition. The ambition that saw the development of the railways, canals and so on is lacking so far in that critical aspect of our infrastructure needs. The target of 2 megabits per second, as I am sure most hon. Members know, is staggeringly unambitious. Next year, Norway will roll out to 98% of its inhabitants 100 megabits per second, and the EU digital agenda is for 30 megabits per second by 2020. I admit that Singapore is not entirely rural—[Interruption.] It has bits of rain forest—I checked on Google Maps and once upon a time spent six weeks there. Singapore has access to 1 gigabit per second, for pity’s sake, which is what we are competing with. The reality is that we are behind. That will matter.
When I studied at university in the constituency of the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) in 1990—I would barely touch a word processor at that time, never mind anything else—I read an article about mobile phone usage. People were asked, “Can you see yourself needing a mobile phone in the next 10 years, or would you want one?” but only one in five answered yes. My hon. Friend the Member for Burton was asked how many of his constituents want access immediately. I am sure that many do, but I am also sure that many of his constituents, like many of mine, do not realise that they want it, or that they should want it.
There is a need for evangelism to sell the need for access to superfast broadband. We will need something like 100 megabits per second, and we will need it soon. For example, those places in Cumbria that are most remote from hospitals and the most likely to benefit from telemedicine are the least likely to have the chance to access that technology. World leaders such as Gilkes in Kendal, which is providing hydroturbines in south, central and north America, need to be able to upload incredibly complex graphic designs. Kendal now has 20 megabits per second and that is wonderful, but even that will not be enough for very long. Rural farmers need to be able to complete their Rural Payments Agency forms. The £2 billion Cumbrian tourism industry needs to be able to punch above its weight as it fights the city break market. To do that it needs more than the 2 megabits per second that we are talking about today.
I am proud to be part of the campaign across Cumbria with the county council and BDUK—Broadband Delivery UK—to roll out the broadband pilot in South Lakelands. I am also proud of the broadband pioneers and the hub co-ordinators we have in the area. I welcome what is happening in Cumbria, but I am frustrated by the speed of the project and the speed of the target. I am concerned that the infrastructure as it is built across Britain must be future-proof, but it is not even now-proof. We have to build a network that is in the interests of our communities and businesses, and—dare I say?—not in the interests of one or two large telecommunications companies. That is the great fear I have about our county project. We have heard that fear about Lancashire and I suspect that it is shared across the country.
We need to state that copper is not the answer and that fibre to the cabinet is not a future-proof answer. It might suit certain companies, but it is not future-proof and fibre to the home and business is the answer. Mobile and satellite solutions also play a huge role, and I endorse everything that my hon. Friend the Member for Penrith and The Border (Rory Stewart) said about mobile networks. Costs should not be higher for users in rural areas than they are for users in cities, and that is another important issue.
Andrew Fleck, the chairman of Fibre GarDen—the team trying to bring fibre-optic, superfast broadband to Garsdale and Dentdale, said in his e-mail to me a couple of days ago:
“The cost of nationwide implementation is prohibitive in the current economic climate, but the economic penalty for delay will be greater still.”
He is absolutely right. Tonight I will get on the train to Oxenholme and travel on a rail network that was built by visionaries 150 years ago. That is the sort of vision and ambition that we need today.
Chi Onwurah
I congratulate the hon. Gentleman on setting out in such visionary terms the superfast future that we all hope to have, but it is worth noting that the vast majority of the companies that built the railways went bankrupt and it was public subsidy that enabled the uneconomic areas to be reached.
Tim Farron
The hon. Lady makes a correct observation, and I would make one in return—and it is not meant as a dig at my hon. Friends from another party. Let us reflect on how Norway is able to have 98% access to 100 megabits per second next year: it is because it still owns its telecommunications company and it can make it so.
Ian Lucas
We were on track to meet that deadline. It was costed, and the £200 million that would have been used to do that would have been taken from the same money that the current Government are using in connection with their broadband commitment. For the outside world—although not for this Government—a year is a very long time. I am not aware of any questioning by the industry of the commitment made by the Labour Government. The position was deliverable, but this Government have decided to put back that universal broadband target by three years.
Chi Onwurah
Is it not true to say that we have little or no information on the progress that has been made by this Government towards meeting their unclear and undefined target of the best broadband by 2015?
Ian Lucas
Absolutely. The Minister is always very polite in his answers to parliamentary questions, but he is also very good at drafting uninformative replies, something that I worked very hard to achieve when I was a Minister. I was not quite as good at it as he is.
The provision of universal broadband services is also very important to the public sector. Online services are a massive opportunity for government at all levels to provide better services more quickly and more efficiently. However, the Government can move in that direction only if they provide those services to everyone across the country. For example, I understand that the Government intend to move to the compulsory online registration of new companies. As the former responsible Minister, I understand the reasons—costs and efficiency—for this decision, but one can justify such a move only if there is universal broadband provision across the UK. A company with no access to the internet cannot be required by the Government to use it.
If we are to have universal broadband by 2015, what will it cost? Through parliamentary questions, I have established—I did get some information—that the cost of providing universal fibre-to-the-premises provision would be £29 billion, and that more realistically universal fibre-to-the-cabinet provision would cost £5 billion. We agree that there is a market failure and that the Government have sought to address it by setting aside the £530 million by 2015 mentioned several times today. However, we all accept that that is not enough, so we must look to the private sector for the necessary investment to bridge that investment gap.
On definitions, the Government are not just committing themselves to universal broadband; they are committing themselves to the best high-speed broadband in Europe by 2015. It will be helpful if the Minister tells us today what speed he regards as high speed for these purposes. If we are to work together for the benefit of our constituents to achieve that target, we must know what it means.
We know that insufficient public money is available to achieve the Government’s goals by 2015, so let us consider the position for private investment. How is that going? Here, I regret to say, there is a problem that was referred to by a couple of Government Members, including the hon. Member for Newton Abbot (Anne Marie Morris). On 1 April the Minister received correspondence—no coincidence perhaps—in which senior executives of leading communications companies, including Fujitsu, Virgin Media, TalkTalk, Geo and Vtesse Networks, wrote that “urgent intervention” was needed to require BT to revise the pricing for the use of its infrastructure. The companies also stated that without such intervention the Broadband Delivery UK process risked a lack of vigorous competition, and as a result would fail to deliver the investment, quality, speed of roll-out, innovation and value for money that the industry was capable of delivering, and which taxpayers deserved. That is a major problem for the necessary private investment.
The communications network under Labour was extremely competitive. For example, in the past three years, competition has seen the cost of mobile broadband fall from £50 per gigabyte to less than £10 per gigabyte.