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NEWSFLASH

Broadband

Mr. Robert Key (Salisbury): I come to this debate as a strong believer in science and the development of science through technology to improve the quality and standard of life of the people of our country and of the world. I have always been a strong supporter of communications technology. I am certainly the only person taking part in the debate who is a veteran of the Cable and Broadcasting Bill. Therefore, I have a sense of déjà vu. It was back in that era, when the House was legislating for the arrival of cable television, that we were faced with a new technology that was, on the one hand, grasped with great expectation by existing companies but, on the other, was resisted until those organisations had their share of the market sewn up.

There is a certain amount for which BT can be forgiven. It is acting in the good commercial interests of its owners and customers. However, we should not forget that it is the monopoly supplier of broadband in this country. More than 90 per cent. is in its hands. Therefore, I suspect that we need to take what it has to tell us-it has had much to tell us in its briefings during the past week-with a large pinch of rock salt. One of my purposes will be to encourage the Minister to develop his own thinking and to explain to the House the alternative methods of delivery of broadband.

As my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) has said, broadband is a real issue in our constituencies. Only 10 days ago, when I was canvassing in the local elections, I stopped to read the village notice board in Pitton, which is opposite the excellent village shop of Mr. Morrison, where I had popped in to buy a bottle of gin. Not many people realise that a bottle of gin in a village shop is often cheaper than the same brand in Tesco. However, I digress. I read on the notice board an advertisement from a frustrated local resident. He was saying, "Please sign up and register with BT because we want broadband in Pitton."

That was not the first village. In Shrewton, Fonthill Bishop, Tisbury, Downton, Trafalgar, Whiteparish and Amesbury, people are similarly concerned about the issue. In Amesbury, a trigger threshold has been announced by BT.

Mention has been made of the role of the development agencies. I am sorry that my hon. Friend the Member for Blaby (Mr. Robathan) is disappointed with the agency in his area. The South West RDA has been playing an important role in assisting the development of broadband communication.

Whether we like it or not, RDAs are now important players and big distributors of taxpayers' money, so I want to make sure that my RDA operates effectively for my constituents. I think that it does-it has an excellent website, ConnectingSW.net, where people can find a great deal of information and discover how it is doing.

They can also find out about satellite broadband delivery by connecting up to the remote area broadband inclusion trial or RABBIT system.

I have been briefed by NTL, which is an interesting company. After the passage of the Cable and Broadcasting Act 1984, I became the director of a cable television company, which was taken over by interests now represented by NTL, so I saw the development of the technology at first hand. NTL has pointed out that it would be a mistake to believe that only DSL technology can be used in broadband technology. If we only go down the ADSL route, we will give BT a monopoly. NTL's answer is to trial wireless broadband services in the 10 GHz band, and it is talking to development agencies about the use of that technology in rural areas. It looks forward to the forthcoming auction of band with which it hopes will be cheaper than the last round. However, we should not be lulled into the belief that only BT can provide the technology.
I mentioned the exchange at Amesbury, which BT says requires a trigger level of 350 customer registrations to be viable for broadband upgrade. I was therefore interested in the comments of my right hon. Friend the Member for Penrith and The Border (David Maclean), who has conducted a campaign for broadband in his constituency, where the trigger is different. Each and every one of us should be interested in the breakeven level set by BT Wholesale, which is three years in Penrith. My right hon. Friend has asked why that extraordinary and arbitrary figure has been set as the payback period for investment. After all, Sky television took 10 years to break even. Why the magic figure of three years? Is it just good commercial sense by BT, which is telling us how long it thinks it will take to break even? It has said that it is prepared to take 50 per cent. of the risk, for which I salute it. However, that is a commercial choice-there is nothing technical or political about it. None the less, I wish my right hon. Friend success in his campaign for his constituents.

The Minister said some important things in our excellent debate on 25 March. I pay tribute to him, as those of us who have been in the House more than five minutes recognise a Minister who knows what he is talking about. That can be a severe disadvantage, however, as it means that the Minister shares our frustration at not being able to move further and faster, given all the frustrations of government and different departmental interests, including the insurmountable obstacle at the Treasury, which has to be overcome. However, at column 55WH on 25 March, he said:

"I do not believe that there should be a general public subsidy for broadband, which has been suggested. The key role for the public sector in broadband will not be through handing out subsidies; it will be as a customer for broadband services because public services will spend over £1 billion on broadband in the next three years."

The Minister went on to mention the problem of backhaul infrastructure, which involves the cost of connecting a local exchange or a new wireless base station to the core network. He said:

"The key point here is that the investment that delivers, for example, broadband to a school in a rural area in the future can also contribute to the backhaul for a local access system for the community as a whole. That is the key".-[Official Report, Westminster Hall, 25 March 2003; Vol. 402, c. 55WH.]

The Minister was absolutely right.
I believe that there is an important role for wireless technology, and we have not heard nearly enough from companies interested in making an investment about its use as an appropriate technology. The Financial Services Agency was slow in sorting out its housekeeping, taking a year to get up and running. I suspect that Ofcom will spend a year sorting itself out and doing the housekeeping. It is a slow process. I hope very much that Lord Currie, who I think is an excellent choice of person to do the job, will sort out the FSA-I mean Ofcom, although I wish he would do the same for the FSA-as quickly as possible. If he can do so in less than a year, we will make some real progress.

In rural areas, there will probably always be hybrid solutions. The hon. Member for Twickenham (Dr. Cable) spoke of his constituency, where the issue does not arise. It will always arise in mine. Sixty per cent. of my electors live outside Salisbury, in more than 100 villages. That is the problem. More than 3 km out from the hub, or perhaps 6 km, the trouble begins. We must have a hybrid solution.

There is another problem that the South West of England Regional Development Agency has put to me. Whether it is deliberate or not, I do not know, but BT Wholesale and BT Retail are not talking to one another very well at present. Sometimes there is a regional management issue, and the RDA finds that if it talks to BT Wholesale, it is told to refer the problem to BT Retail. Even though there is a common manager somewhere up there in the heavens, a little game goes on, which causes delay. That is not good enough, and I hope BT will deal with the matter.

Brian White: Is the hon. Gentleman aware that a number of network companies are experiencing equal frustration in their discussions with BT Wholesale, and that the problem will be resolved by the opening up of competition? That is a key job for Oftel initially, and Ofcom later.

Mr. Key: I am grateful to the hon. Gentleman for his support for my thesis. He is another expert in the House, so I hope the Minister will realise that what I am saying must be true, and will address the issue.

Other possible solutions have been suggested. For example, there is a group in the south-west that wants a wireless solution, but that would involve borrowing £80 million from the European Investment Bank, and it would be a monopoly, which would crush all the competition and would therefore not be allowed. Even if one wants to attract big money, one cannot do it because that would crush the opposition and be against the rules.

A further approach is the Atlas project in Scotland, which involved the laying of the cable between Scotland and London. Scottish Enterprise did a remarkable job there. It provided access both ways, giving Scotland a great advantage.

Satellite is expensive. My hon. Friend the Member for Stratford-on-Avon ) is once again right. For a business of a substantial size that will generate substantial income, the £1,000 charge may not seem too much, but for many small companies it is too much. For example, a small company that I know in Fonthill Bishop has been told that £900 is the charge. There is no way that
a one-man business can sustain that level of investment. Other approaches have been tried, such as the regional development agencies that got together in the RABBIT project and produced a system of vouchers for first-year costs. That may be one way forward, but it is only an interim solution.

My best information is that satellite access to broadband will only ever be about 2 per cent. of the services provided. Some people might say that that is a little low. We must address the problem of small and medium-sized enterprises, as well as one-man businesses. Ironically, many creative people, such as writers and designers, who could bring life and wealth to the rural communities are being prevented from doing so because of the bottlenecks. Sometimes they are commercial bottlenecks, and sometimes they are caused by restrictions.

I should like the Minister to expand on a topic that he touched on in the Westminster Hall debate. I know what was running through his mind on that occasion: he had 10 minutes to wind up the debate. He could have spoken for 100 minutes and he would probably have said what he was longing to say, but he had only 10. Well, he will have more than 10 minutes this evening, so I should like him to address this issue, please.

First, will it be possible for commercial traffic to run on public networks? That is the real issue for rural areas. There are restrictions at present, such as the BT sales contracts. If one is under contract to BT, the line cannot be sub-let, so no one can share. Therefore, having one major enterprise is no good. It is not even good for a public enterprise to have a BT contract, because it cannot sub-let to the private sector, to small firms or individuals.

The second issue concerns Ofcom itself. It is argued that the public sector supply is achieved at a discounted price. If, having obtained the connection at a discounted price one sub-lets to a private sector company or individual, that is once again counted as a subsidy, which is against the rules. Is that really a good enough argument for preventing the spread of access to broadband on the back of public sector investment?

The next issue concerns the regulations and licences themselves. There is one set of regulations and licences for the public sector and another for the private sector. That, too, is a barrier to broadband access.

Lord Currie's view will be critical in determining such issues, and I hope that the Minister will discuss them with him. My plea to him and to the Minister is to relax the regulations and allow for fertile development of the provision of broadband, particularly in rural areas where there are so many potential customers.

It is wonderful that schools, doctors and local libraries will all be on line, but we must find a way of piggybacking on public investment. No one disputes that the public highway should be resurfaced, because it is used by the public sector, by ambulances, police cars and private vehicles. It is a common infrastructure and broadband should be similarly accessible. It should not necessarily all be provided by the public sector, but where the private sector is willing to invest, it should not be restricted in obtaining the service.

I pay tribute to my county council of Wiltshire. It has taken a tremendous initiative in trying to access broadband for the taxpayers of Wiltshire and the Wiltshire smart place scheme has been successful.

Despite people thinking that there cannot possibly be any technology in Cornwall, I know differently. It is not even true that just because the satellite dishes are on Goonhilly Down there is no access to the world of cable. In Cornwall, small and medium-sized enterprises take up broadband at four times the national average rate, which goes to show that with dedication and vision, the removal of regulations and will in the public and private sectors, there is no reason why there should not be a much higher penetration of broadband as an everyday way of improving the quality of life and the advantages that Britain should enjoy in the 21st century.