Broadband Universal Service Obligation

Geoffrey Clifton-Brown Excerpts

Thursday 15th December 2016 Commons Chamber

[Matt Warman]

Yes.

The Government’s indication that, in the hardest-to-reach areas, connections will be provided on request, rather than by default, is a pragmatic economic response, but communities should be incentivised to go further. I would, however, caveat this approach—that it be demand led—by saying that the USO should surely be extended to all major roads, not just motorways, and to railway lines and stations as soon as possible. I know that the Department for Transport is working on this, but building it into the USO as well would be progress.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Over the many months I spent on the HS2 Committee, I tried very hard to insist that we included an obligation to provide broadband all the way up the line and that we gave affected communities access to it. I also think that for every development of over 20 houses we should insist that the developer put in superfast broadband. What does my hon. Friend think about that?

[Matt Warman]

I absolutely agree with both points. It is daft that we are not fibring up every new housing development by default, and it is short-sighted of developers, because we know that superfast broadband connections add value to the houses. There is virtue on both sides.

Like my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown), I would go slightly further than Lord Adonis’s National Infrastructure Commission did recently, and say that we should be slightly more creative in identifying areas of default provision.

Crucial to all this is the issue of data. There would be a real risk of cherry-picking if we were to publish simply a bulk set of every single connection and how fast it is; actually, that might provoke the sort of anti-competitive behaviour that none of us would like to see. However, it strikes me that publication of address-level data will provide constituents with an accurate picture of their broadband speeds now, and it should also provide them with a road map for the future, so that it would allow not only prospective purchasers of a house to see what speed they might get and what their upgrade path might be, but communities to pool their own data so that they can identify whether they should be going out to other companies to try to attract investment or whether they might be able to wait a little while because they know that a solution is coming.

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[Mr Vaizey]

My hon. Friend is absolutely correct. The rural superfast broadband programme has been a great success. It has delivered access to superfast broadband to almost 5 million homes. The money invested by Government will be paid back because of the nature of the contracts. The hon. Member for Wrexham mentioned that he had persuaded Virgin to come to his constituency. Virgin is now investing £3 billion in extending its network, and that is partly inspired by the success of the superfast broadband network.

The point I really want to make is that I am sick and tired of people talking down this country and pretending that we are in some kind of digital desert. The latest culprit—I am astonished that the Government allowed this to happen—is Lord Adonis, a Labour peer—[Interruption.] No longer a Labour peer. Alright, he is an ex-Labour peer, but we know where his sentiments lie. He used the platform of the National Infrastructure Commission to publish a report yesterday claiming that we have worse mobile broadband than Peru. He based that on one set of analysis by Open Signal. I am not denigrating that company, but it relies on people downloading an app and then uploading the speed they are getting. Some 4,500 in Peru use the Open Signal app, and most respectable telecoms analysts would not go near a country unless they had data from at least 25,000 users. One of the mobile companies in Peru does not even provide 4G, but that is not even mentioned in the Open Signal app.

It is much better to look at a company such as Akamai, which points out that we have the fastest download speed in 4G of any country in Europe. It is almost double the next best in the EU five. Its report, which was published this week, says:

“the United Kingdom once again had the fastest average mobile connection speed at 23.7 Mbps (up from 23.1 Mbps in the second quarter)”.

We have between 82% and 93% household coverage for 4G. A total of 76% of mobile subscribers in this country have 4G subscriptions. That is double the next best country, which is Germany, at around 35%. We have companies such as Amazon investing in cloud services. We lead the world in e-commerce. If we are this so-called “digital desert”, as Lord Adonis claimed today to promote his report, how come we lead on all these metrics? I urge my right hon. Friend the Minister to give Lord Adonis a dressing down, and to tell him to check his facts and use a better analysis instead of running around promoting his report, pretending that we somehow live in a digital desert.

[Geoffrey Clifton-Brown]

As it happens, I have the Akamai table here on my machine. Whereas the UK has a score of 13 for international connections, Peru has a score of only 4.4. How Lord Adonis can come up with his figures, I do not know.

[Mr Vaizey]

I am extremely grateful to my hon. Friend.

Apart from the dressing down of Lord Adonis at the Bar of the House of Commons, my main policy point is this—[Interruption.] I tried as a Minister to get a comprehensive data analysis of broadband connections, because too many independent reports are knocking about that people can use to make their own partisan points. We need Ofcom to collate these reports and to update its data, because its own data—not through its own fault but because of how long it takes to collect them—are often six months to a year out of date. We need one comprehensive UK digital report published every year by Ofcom, incorporating all the independent research.

I took refuge in the absolutely excellent independent analysis undertaken by thinkbroadband. If any hon. Members want to know how many connections they have in their constituency, they should go to the thinkbroadband website where they will get the most up-to-date and accurate information.

Having attacked Lord Adonis without his having the chance to defend himself, let me say that I thought his report was excellent, despite his pathetic attempt to promote it by putting out misleading analysis of the digital position in this country. The recommendations were spot-on, not least the recommendation that my right hon. Friend the Minister’s empire should be expanded. I tried to expand my empire when I was a Minister and I failed dismally. People will not be surprised to hear that, but my right hon. Friend is 10 times more talented and 10 times more superfast, and it is right that under his stewardship we should bring together all digital projects.

It is a scandal that we do not have broadband in trains. The reason is that that area is run by the Department for Transport and Network Rail, whereas it should be run by my right hon. Friend. It is a scandal that the Home Office is in charge of the emergency services network; it should be run by him. It is a scandal that we do not have coverage on our roads; it should be run by him. All these digital projects should be brought under one Minister, and I cannot think of anyone more talented than my right hon. Friend.

I come now to the third recommendation. We have something called Broadband Delivery UK—BDUK. The clue is in the title: the D is for delivery. Under my right hon. Friend the Minister, who is talented enough to oversee a large organisation such as that, Broadband Delivery UK should be turned into a delivery organisation that works with local councils. It should not be left to the hon. Member for Wrexham to browbeat Virgin Media to deliver broadband to his constituency; BDUK should be working with Virgin, Openreach and all the mobile operators.

Many of the problems that make us gnash our teeth and pull our hair out are down to appalling planning procedures. We all know the story of how Kensington and Chelsea would not allow BT to upgrade its network because it did not like the design of the green boxes. I have had rows with council leaders in south London who just did not like the people at Openreach and so were not prepared to move. I had telecoms companies coming to me saying that they wanted to deliver broadband to council houses but could get a wayleave from the council to do it. So much of this is about bad planning and straightforward bureaucracy.

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[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I, too, pay tribute to my hon. Friend the Member for Boston and Skegness (Matt Warman) for opening this debate so knowledgeably.

My constituency is one of the most rural in England. Earlier this year, on 11 May, I called on the then Prime Minister, the right hon. David Cameron, to honour his commitment that every home and business should have access to broadband by the end of this Parliament. I therefore warmly welcome the inclusion in the Chancellor’s autumn statement of a provision for the deployment of over £1 billion to boost broadband speeds with the help of a digital infrastructure fund which, I am ever hopeful, will provide the universal service obligation.

It is self-evident that today everybody needs a good broadband speed: it has become almost as important a utility as water and electricity. As the representative of such a large rural constituency, it would be useful to illustrate its importance to one particular group—farmers. The connection statistics for farmers compiled by the National Farmers Union make for poor reading. Over 30% of British farmers do not receive their internet via fibre-optic, and 58% experience a download speed of 2 megabits per second or less, well below the current national average of 22.8 megabits per second. Like any modern business, farmers require a fast broadband connection to do a plethora of tasks, including vehicle registration, basic farm payments, livestock movement records, and animal registration; and increasingly, like all businesses in this country, they will have to file their tax affairs online. By their very nature, single farm payment claims, including plans, require a large amount of data to be transferred. If the Government really want to support this country’s 212,000 farms, they must take that seriously.

I warmly welcome the Digital Economy Bill, which could provide a legislative framework to ensure that the UK can become the best-connected country in the world, but it needs to be bolder and introduce future and rural-proofed legislation. It is clear that the universal service obligation that will introduce speeds of 10 megabits per second by 2020 is obsolete and out of date even before it has been introduced. The minimum EU standard for 2020 should be 30 megabits per second. Indeed, world standards are now moving towards 100 megabits per second, so we need to be ambitious.

We also need to be more inventive. As I said in an intervention on my hon. Friend the Member for Boston and Skegness, all developments of more than 20 houses should have to install superfast broadband. As the previous Minister, my right hon. Friend the Member for Wantage (Mr Vaizey) has said, we should be more inventive, and major public infrastructure projects should install superfast broadband.

My right hon. Friend also said that there has been good progress in Gloucestershire, and I praise him for what he did for my constituency and county. I have consistently campaigned for better broadband provision in my constituency, either by supporting private business to receive installation contracts or by lobbying the Government to increase public investment. Gloucestershire County Council, in conjunction with Fastershire, has seen almost 40,000 homes in my constituency receive superfast broadband over the two phases since it was introduced in 2014. That has been funded by a combination of funds from the county council and the Department for Culture, Media and Sport, with a total investment of almost £28 million. I am glad to note that a further, third phase is soon to begin and will fill in any gaps and, I hope, leave most of my constituents with a reliable and appropriate internet connection.

In 2010, the coalition Government announced that Britain would have the best superfast broadband network in Europe by 2012, but that was postponed until 2015 and replaced by the less ambitious aim of having

“the fastest broadband of any major European country”.

I praise the Government for making progress. I have cited the Akamai tables, which show the UK’s position in relation to Peru, and those same international tables show that Britain is the 12th country in the league. Given that we are the fifth largest economy, we cannot be complacent about our broadband provision.

As with the introduction of any utility, cost-benefit analysis must be undertaken and considered. According to the Government’s own 2013 “UK Broadband Impact Study”, availability of faster broadband will add about £17 billion to the UK’s economy by 2024. The bulk of that money would come from improvements in productivity. In his autumn statement, my right hon. Friend the Chancellor was very keen to stress that we need to improve that. That would also safeguard employment in areas such as Wrexham, which would otherwise be left at an unfair disadvantage.

From an environmental perspective, a universal service obligation will offer additional benefits. Annually, 1.4 billion miles in commuting by car, 3.2 billion miles in business travel through increased use of online collaboration, and 1 billion kWh of electricity through broadband-using firms shifting their server capacity on to more efficient cloud platforms will be saved by the universal service obligation. All of that equates to a saving of 1.6 million tonnes of carbon dioxide each year.

As I said, I strongly support the digital infrastructure fund announced in this year’s autumn statement. However, that investment will be severely diminished if there is no blanket improvement of mobile phone signals across the whole country. Although the introduction of 5G in major conurbations is warmly welcome, there are still great swathes of Britain, particularly rural areas, including in my constituency, that do not even experience an adequate 3G signal. Something must be done to improve the foundation of this country’s digital capacity.

The absence of phone signals—so-called not spots—should be a thing of the past in this country in the 21st century. In the Cotswolds, villages such as Great Rissington, Chedworth and Quenington are notorious for having a poor mobile phone signal. Indeed, there is a certain spot four miles from Cirencester on the A433—the Fosse way that goes through my constituency and a very busy road—where I know that my mobile phone is going to cut out. Surely in this country we should be able to do something about that. The mobile infrastructure policy is crucial in tackling the unacceptable problem whereby 20% of the UK is affected by not spots. One thing follows the other. If we have good broadband infrastructure, we can solve the mobile infrastructure problem.

Vodafone, EE and O2 have all successfully worked across the country to erect and share masts, including seven in my constituency. The world is moving on. I recently met a major Chinese telecoms firm, ZTE, which plans to gain £2 billion of the £20 billion UK telecoms market by 2025 from a standing start, using mainly fibre and wireless technology. For BT, that does not bode well. It is over-reliant on outdated copper wires when the world is moving towards fibre and wireless technology. It must adapt, otherwise it will simply go out of business.

The Government and regulators need to be mindful of the danger that when broadband and good mobile phone coverage are provided by companies with bespoke solutions, some of the smaller companies increase the cost to customers by more than the cost of inflation. That is a new and growing scourge that my right hon. Friend the Minister will need to look at with regulators.

I conclude by encouraging all parties involved—nationally and locally, private and public—to proceed as rapidly as possible in improving broadband and mobile coverage. To that end, the universal service obligation is entirely correct to create a legal requirement for such a crucial service. We must be ambitious when it comes to internet coverage and speed if we wish to tap into our economic potential to export more goods and services, and if we do not wish to allow our rival countries to overtake us.

As this will be my last contribution in the House before Christmas, Mr Deputy Speaker, may I wish you, all the staff in the House—especially my own staff—and right hon. and hon. Members and their families a very peaceful Christmas?

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[Calum Kerr]

I thank my hon. Friend, the other Callum in the House, for that excellent point. Telephony and IT used to be relegated to a subdivision of corporate structures but have now been elevated to board level. Exactly the same thing should happen to digital within Government.

With the forgiveness of other hon. Members, I will move on to some of my own specific points, simply for the sake of time—I am sure we are all dying to hear what the new Minister has to say. First, I agree that the USO is a good idea. I will agree with anything that puts more money into infrastructure and connectivity. The Government say their intention is:

“The design of the broadband USO must put people and businesses throughout the United Kingdom at its heart in order to secure the benefits of digital connectivity for as many people as possible, as quickly as possible.”

I wholeheartedly agree with that ambition, but question whether we are on the right track to meet it. In the same Department for Culture, Media and Sport document, the Government go on to say:

“The concept of universal service in telecoms is a long-standing principle, dating back over three decades”.

I also agree, to a point. But we are not talking about simple telecoms. Telephony is a binary service: it works or it does not. As we have heard very clearly, broadband is far more complex than that. I recognise that the Government, the DCMS and Ofcom understand that. A document produced alongside the Digital Economy Bill mentions upload, download, latency and other factors critical to the design of an effective USO. But there are still fundamental choices to be made about the design of the universal service obligation.

Ofcom’s summary of responses highlights two paths open to the Government. It says that respondents fall into two groups: those with a vision for a more highly specified service for all and those with a belief that people and businesses simply need a safety net. Are we talking about a vision or a safety net? My fear is—in fact, it is not even a fear, because it is clear—that to date the Government have talked about option two, a safety net.

Let us consider what the USO will look like if we stick to the current path. First, we have the fact that 10 megabits per second has been specified. We can argue whether that is the right speed. I firmly believe that it shows a lack of ambition, but I accept that some industry players say that at the moment it is fast enough. The Government need to raise the bar, particularly given their recent announcement in the autumn statement. As the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) said, 10 megabits will very quickly become out of date.

[Geoffrey Clifton-Brown]

When used with old-fashioned copper wires, 10 megabits can become a lot less than that. We need a superfast fibre infrastructure instead of copper wires.

[Calum Kerr]

I agree, and I thank the hon. Gentleman for that point.

The danger is that we are following a path similar to that taken in relation to BDUK. It is pragmatic about how much we can do for the money, instead of giving a vision of what we want to have, which is fundamental: critical infrastructure. There is also a real challenge about the ability of the USO to be upgraded. Yes it will be reviewed, and there were some excellent suggestions as to frequency, but I have serious doubts about how it is going to work.

Before I come on to that, let us talk about the telecoms elephant in the room: BT. Let us be clear that BT is the one provider that has said it will do the USO. There is a danger—if I can use that word—that it will all be given to BT. If that is the policy, so be it, but let us do it with our eyes open and be clear about whether that is the right thing to do. I can tell Members that not all my constituents would be particularly enamoured with that. We should all reflect on BT’s submission:

“Existing technologies such as Fibre to the Cabinet and new technologies like long reach VDSL can offer cost-effective solutions for a 10M service but would require further investment if the requirement increased significantly, e.g. to 30M.”

That highlights my point. If we settle for 10 megabits today, what happens when it gets upgraded to 30 megabits?

Let us consider another aspect to this: what does a universal service mean? The documents from Ofcom and the Department for Culture, Media and Sport do not hide the fact that it means something cost-constrained like the telephony USO, where a line can be installed up to the cost of £3,400 and thereafter one pays the difference. Imagine applying that in our constituencies, where the cost of broadband is significantly higher than that for telephony. Imagine I am in need of the USO. I have 2 megabits and upgrade to 10 megabits. I may have to pay, maybe I do not. What happens when we upgrade the service to 30 megabits? Do I have to pay again? Maybe I would have preferred to go to 30 megabits in the first place. There are fundamental flaws and traps ahead of us in terms of design.

The Government have choices. As I said, it feels like they are heading towards a safety net when they need to be more ambitious. Actually, was the autumn statement not a revelation? The Minister announced at the Broadband World Forum that fibre was the future and we all went, “Hurray! The Government get it!” In the autumn statement, they put some money where their mouth is. The broadband investment fund—granted, the previous Chancellor announced it—suddenly got £400 million. There was talk about a fibre spine backbone. What we have there is ambition.

The Robert Kenny report challenges assumptions about fibre and says: pick where to put in fibre first and do not do “blunt” FTTP—fibre to the premises. I think it lacks ambition in itself, but it is right in one regard: fibre has more impact in rural areas. In the Government schemes, I see absolutely nothing that will help rural areas. I see rural areas getting fobbed off with 10 megabits, whereas they should be getting fibre. If I am in an urban area with 30 megabits and go to 100 megabits, that would be fantastic but it will not change my life. If I am sat with 0.5 or 1 megabit, it would be transformational. The Government need to revisit the USO and show the same ambition.

I would like to make one final point about how this can be done. If we stick to the current path, the USO will mean nothing in Scotland—absolutely useless. We are aiming for 30 megabits. A 10 megabits USO might satisfy one or two, but that will be it. In the regions of England and in the devolved Administrations, it will mean very little. We can save the USO, however, by turning it into something more flexible—what David Cullen, chair of the Independent Networks Co-operative Association, said was a universal service opportunity. I put forward an amendment for vouchers. Vouchers would unleash the collective powers of our devolved Administrations and our country. I urge the Government to belatedly get behind that idea, because fibre is the future for rural as well as urban.

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[Matt Hancock]

That is an important point. The latest take-up figures are about to be published by Ofcom, but the message that needs to go out on take-up is this: in a BDUK area, the more people who take up the connection, the more money goes back into providing more connections for other people. It is incumbent on us as local representatives to get that message out.

We should also get out the message made by my hon. Friend the Member for Eddisbury (Antoinette Sandbach) about the Ofcom app, which I have downloaded, so that Ofcom gets the real data from the ground about connectivity in each area. My hon. Friends the Members for Wycombe (Mr Baker) and for Witney (Robert Courts) also made the point that connectivity matters more than technology.

I want to return to the point about farmers made by my hon. Friend the Member for The Cotswolds— he is sitting next to my hon. Friend the Member for Mid Norfolk (George Freeman), who also cares a lot about farmers. I loved the phrase used by my hon. Friend the Member for The Cotswolds: it is important that we have both a future-proof and a rural-proof approach. In introducing the USO, we have said that 10 megabits per second is an absolute minimum. The legislation provides for that to be revised up. The Scottish Government have chosen to have a fixed figure; I think it is better to have a figure that can be revised up as technology changes.

[Geoffrey Clifton-Brown]

My right hon. Friend is making a fantastic contribution on this USO, but the problem with the 95% target is that in rural areas, it will not be met for many more than 5% of customers.

[Matt Hancock]

Of course. Topography means that it is harder to deliver in rural areas, so we are introducing a universal service obligation to ensure that everyone can get hold of broadband.