Communications Bill

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Mr. Lansley: I confess that this is not an area of the Bill that the Joint Committee considered, so I am on my own here. I will follow my hon. Friends' lead.

My hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) is a little more familiar with the introduction of carrier selection or pre-selection than I am. In this context, pre-selection is more prevalent than selection. My first question to the Minister is therefore about the time scale and the extent of the impact that pre-selection will have on individual users. There is a substantial difference between carrier pre-selection and selection. Pre-selection is the basis of a contract—at the moment, people can readily pre-select cable rather

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than BT or other network providers—but I presume that selection means that there would be no pre-existing contract. Will carrier selection mean that we will all, from any telephone, have the opportunity to choose whatever network provider we desire; or will there have to be some kind of contractual relationship?

My second point is slightly more tortuous. It relates to the transposition of the provisions of the universal service directive into clause 86. The relationship is close, but article 19(2) of the directive allows for:

    ''User requirements for these facilities''—

by which is meant provision for interconnection—

    ''to be implemented on other networks or in other ways''.

Article 19 was originally about the public telephone network, and clause 86 is about public electronic communications networks and services. That is fine, because article 19 also refers to ''other networks''. However, the phrase ''or in other ways'' might not be covered by clause 86.

Article 19 refers to telephone numbers and individual calls, and the definition of ''relevant connection facility'' in clause 86(6) refers to the use of telephone numbers. That has a direct bearing on the question raised by my hon. Friend the Member for Ryedale about broadband. If, at some point, users' requirements suggest that interconnection and carrier selection are desired in relation to broadband facilities, it does not follow that those users will use telephone numbers. It does not follow that they will work on the basis set out in clause 86(6). However, article 19 clearly anticipates such a possibility because it uses the words,

    ''on other networks or in other ways.''

We have covered the other networks, but not the other ways.

9.15 am

Mr. Timms: I have looked carefully at the amendment and it appears that that point is already covered in the Bill. The requirement in paragraph (6)(b), is to enable

    ''that selection to be made either—

    (i) by the use of a telephone number on each separate occasion on which a selection is made; or

    (ii) by designating in advance''.

The first of those options covers the use of a code in the way in which the amendment envisages. Perhaps the confusion is with the use of ''telephone number'', rather than ''code''. If it is accepted that a telephone number can include a code, that point is already covered in sub-paragraph (i). Either one dials a code, or one does not, in which case the pre-selection takes effect.

Mr. Whittingdale: I am grateful for that reassurance. The Minister will understand that that is a requirement under the directive and the Bill should accurately reflect that.

The Minister believes that the point is already covered, but he should understand that we do not just wake up in the middle of the night and think, ''That's a good point to raise.'' We raised the point about selection because various interested parties who operate in this area have expressed a concern that

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the drafting of the Bill is not clear. The purpose of the amendment is to make it clear. Does the Minister object to the amendment on that basis? If the amendment clarifies a point that he says is already contained in the Bill, I am not sure why he would object to including it.

Mr. Timms: Because I think that the amendment would muddy the waters. At the moment it is clear that the selection is made either by the use of a code or by pre-selection. An addendum to the second option which takes one back to the code, as is specified in the first option, would make things less clear. The key is that the reference to a telephone number in sub-paragraph (i) could include a code—there would generally be a code. Once that is grasped, the Committee will see that the point is already covered in that formulation.

The hon. Member for Blaby asked me whether subsection (3)(b) referred to local loop unbundling. We attach much importance to that, and he is right to emphasise it. The clause is, however, clearly about carrier selection and pre-selection and it does not refer to local loop unbundling.

The hon. Member for South Cambridgeshire asked me about selection and pre-selection. Both are covered in the clause. Regarding the question on other networks and, in particular, the impact on broadband, I think that that is covered, because a number will still need to be dialled and an address will need to be provided. The point is covered in the Bill. It is, however, important that that provision is future proof. The hon. Gentleman is right to draw attention to that.

Mr. Lansley: I think that the Minister is correct. The definition of telephone numbers in clause 52(5) is very wide, as it includes any code, number or means of selecting a route for an electronic signal, so it is probably future proof. However, I wish to draw his attention to whether under the new regime one can individually make selection at will, rather than on a contractual basis.

Mr. Timms: I am glad that the hon. Gentleman agrees that that definition of telephone numbers is wide.

The clause covers selection both on a call-by-call choice basis and on a pre-programmed formal agreement basis.

Mr. Robathan: I was particularly interested in the comment of my hon. Friend the Member for South Cambridgeshire about other ways, but we may have to return to that later, as there seems to be a large gap.

On the amendment, I am not entirely satisfied that the Minister has addressed the points that have been made. As my hon. Friend the Member for Maldon and East Chelmsford said, good legal advice was taken and it suggests that there is confusion—which was also mentioned by the Minister. The requirements of the directive must be taken into account. We consider—and the legal advice suggests—that the drafting may not be as good as we have come to expect from the excellent civil servants who support the Minister. If there is confusion, problems might arise in the future.

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I do not think that subsection 6(b)(ii) makes it likely that people will override. They will designate in advance, and they will then be less likely to override. The amendment is intended to give them that override facility throughout. That would enhance consumer choice. I hope that the Minister and his civil servants will think further about that, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 86 ordered to stand part of the Bill.

Clause 87

Conditions about regulation of services etc. for end-users

Question proposed, That the clause stand part of the Bill.

Mr. Whittingdale: I shall be brief. I may be going down the same unproductive road that my hon. Friend the Member for Ryedale tried to take a few moments ago by seeking to explore with the Minister the circumstances in which this clause might be put into effect.

Ofcom will have very wide-ranging and extensive powers. Clause 87 deals with the services market for end users of public electronic communications services, and it gives additional powers to Ofcom where the access-related conditions and the significant market power conditions that previous clauses provide to it are insufficient to allow it to perform its duty under clause 4, which is the obligation to ensure that European Community requirements are met.

There is already concern about the extent of the regulator's powers, but this clause seems to give it almost limitless powers. There is the safeguard, which we referred to in our discussion of the previous clause, which is that notification has to be given to the European Commission—which, presumably, is able to say that this or that goes beyond the requirements of the directive, or to prevent Ofcom from acting in a certain way. Can the Minister tell us what circumstances he envisages might arise that would lead to the implementation of the powers in the clause?

Mr. Timms: The clause deals with the possibility of significant market power conditions being set when Ofcom has determined that a person has dominance in the services market for the end-users of public electronic communications services. However, the clause provides an additional test, which is whether Ofcom has been unable to perform its duties under clause 4 in full because of the setting of access-related conditions under clauses 69 to 72 and significant market power network-related conditions under clauses 83 to 86.

The hon. Member for Maldon and East Chelmsford may find some reassurance in the fact that the test relates to the requirements on Ofcom in clause 4 to act in accordance with the six EC requirements. Those requirements are: promoting competition; aiding the development of the European internal market; promoting the interests of all citizens of the

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European Union; not favouring particular forms of network, services or associated facilities or favouring the means of providing such things; encouragement of network access and service interoperability; and encouragement of compliance with standards of interoperability.

If it is Ofcom's view that it has not been able to carry out its duties to act in accordance with those six requirements because of other conditions, Ofcom may, under the terms of the clause, set conditions placing obligations on the provider. The provision is therefore not quite as wide as it might appear to be at first sight. It is constrained in the way that I have mentioned. I hope that that gives the hon. Gentleman some reassurance. The provider may also be obliged to have its cost account systems annually audited, and to publish an annual statement as to its compliance with those systems, if those have been obliged in accordance with subsection (6).

However, this is a rather different discussion from that which we had earlier about things that could be done only with the explicit approval of the European Commission. There is a requirement in subsection (7) to provide information to the European Commission, but that is a little different from needing permission from the Commission, which was the case under the earlier clause.

 
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