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Mr. Whittingdale: I am grateful to the Minister for such a comprehensive and persuasive reply, especially on whether BT should be separated into different parts. That would be an incredibly complicated exercise, and I am not saying that it is necessarily the right thing to do. However, I am grateful that he acknowledges the importance of the debate.
On the Minister's point about BT Openworld's share of the market, of course he is right that, for people fortunate enough to live in an area where there is a cable provider, genuine competition and choice are available. There are, however, three categories of area. Some areas have both BT and cable available, providing quite strong competition. Sadly, there are far too many areas of the next type, where neither ADSL through BT nor cable is available. Such areas are found in many of our constituencies—
The Chairman: Order. I had a feeling that this was an intervention, but it appears to be turning into a speech.
Mr. Whittingdale: I shall bring it to a conclusion very quickly, Mr. Atkinson.
In the third type of area, which is found in parts of my constituency, ADSL is available but there is little likelihood that there will be a cable provider, at least in the foreseeable future.
Mr. Timms: The hon. Gentleman is right. However, we can look forward to much more extensive availability of broadband via wireless, providing another dimension to competition; in addition, it is available almost everywhere by satellite, although at a rather higher cost. There are several avenues through which broadband competition will sharpen, one being the power line, which is now being re-examined, although people lost interest in it for a while. The use of the electricity network to support broadband now seems to be a realistic possibility.
It is absolutely vital to have strong and sharp competition in the broadband market, including for those who resell. There are, I think, more than 150 resellers of BT's wholesale ADSL product. There is a significant degree of effective competition, but we—and Ofcom—need to be vigilant to ensure that that competition is as sharp as it should be. I am well aware
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of the concerns of several competitors with BT who have not had enough opportunities in the past.
Question put and agreed to.
Clause 88 ordered to stand part of the Bill.
The Chairman: We had a very wide and interesting debate on clause 88, which is perfectly permissible under the rules of order. However, I remind the Committee that clause 89 is a rather narrow clause, so we should perhaps keep to the terms of the amendments. Clause 89
Conditions about apparatus supply
Mr. Greenway: I beg to move amendment No.103, in
clause 89, page 84, line 24, after 'apparatus', insert 'in that market'.
The Chairman: With this it will be convenient to discuss amendment No.104, in
(b) conditions imposing price controls in relation to the supply (whether by sale or hire) of telephones for hardwiring to an electronic communications network.'.
Mr. Greenway: You are right to say that clause 89 is narrow, Mr. Atkinson, but it is important and the Conservatives profoundly disagree with it. We discussed earlier Ofcom's regulation of the apparatus supply market, which is not required by the directive. It is unnecessary for Ofcom to regulate that market at all because the market is already competitive. We are not happy with the clause for those two reasons.
The Minister made a robust defence in the sense that there are still a number of people with apparatus that is hard wired. His point seemed to be that the whole purpose of the Government's approach was to protect those consumers, and if that was his argument, that is fine. The Government's intention may be to give Ofcom powers in respect of any supplier who has a significant market power position in the hard-wire apparatus market, but the clause goes beyond that. Amendments Nos. 103 and 104 endeavour to limit the powers to the hard-wire market only. That is why amendment No. 103 adds the words ''in that market'' to line 24—''that market'' is the hard-wire market.
Amendment No. 104 makes it clear that any conditions imposed by Ofcom should relate only to the hard-wire apparatus market part of a supplier's business. The clause should not be a Trojan horse that allows Ofcom to regulate the rest of the supplier's business. Allowing Ofcom to do that would be wholly disproportionate and, in any event, we have already concluded that the directive does not require it. It would be contrary to the entire philosophy of the directives taken as a package and to the principles of good regulation.
The Conservatives would prefer that the clause was not in the Bill, but I hope that the Minister is prepared
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to say that he will think about whether the wording should be amended to make it absolutely clear that the provision is simply about ensuring proper regulation of the apparatus supply market as it relates only to the hard-wire market.
John Robertson (Glasgow, Anniesland): Will the hon. Gentleman tell me what hard-wire market he is talking about? Will he give me an example? I do not know of any hard-wire market.
Mr. Greenway: That is a good question and one that the Minister ought to answer—it is his Bill. The note on the clause states:
''Where OFCOM determine that a supplier of electronic communications apparatus has SMP in an apparatus market, OFCOM may set conditions requiring the supplier to maintain accounting separation between such activities and other matters and also may set price controls on the supply of telephones hardwired to an electronic communications network.''
The clause goes beyond that: the note on the clause and the wording of the clause are not the same.
Mr. Lansley: I am following the argument very carefully and it seems to me that the question asked by hon. Member for Glasgow, Anniesland (John Robertson) has been answered. The hard-wire telephone market is the market in which BT rent hard-wired telephones—200,000 of them—to customers who have chosen not to take them out and replace them with telephones that are not hard wired.
John Robertson: That is not a market.
Mr. Lansley: Well, we can discuss that. There is a continuing market if person A continues to have a contract with person B to provide a piece of equipment.
Mr. Greenway: I am grateful to my hon. Friend. As always, what he says adds considerably to the power of our argument.
I was about to conclude my remarks but, having given way, I shall summarise the position again. It is patently obvious to anyone who compares clause 89 with paragraph 216 on page 41 of the notes on clauses that the two do not match. If adopted, our amendments—or something similar—would at least restrict the clause to that which, according to the notes on clauses, is the Government's objective and intention.
10.15 am
We need to hear the Minister's explanation before we consider how to pursue the matter. However, given that the hon. Member for Glasgow, Anniesland does not think that there is a hard-wire market, we look forward to his support if we seek to divide the Committee on the amendment.
Mr. Timms: I understand that the argument that the clause might lead to the setting of disproportionate conditions might appear to have some merit. However, Ofcom is required by clause 3 to act in a manner that is proportionate as well as accountable and consistent, and to target cases in which action is necessary. What
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Ofcom is allowed to do is tightly constrained by the general requirements of its operation.
I resist the amendment because I believe that if market power determinations call for certain conditions, Ofcom should be free to set those conditions. We should not constrain its ability to do so in the way that the amendments propose.
However, I can give the hon. Member for Ryedale some comfort. I am aware that he and his hon. Friends have tabled an amendment to clause 146, which sets out a large number of definitions on a rather similar theme. The amendment to clause 146 would somewhat narrow the definition of apparatus that is the subject of this clause. When we get to that debate, I may be able to say something that will give him some comfort about the points that he raised. Given that we will return to the topic under a later clause, I ask the hon. Gentleman to withdraw the amendment.
Mr. Greenway: On the basis of what the Minister has said, although we remain of the view that clause 89 should not be included in the Bill, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendments proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill:—
The Committee divided: Ayes 11, Noes 5.
Division No. 6]
AYES
Coaker, Mr. Vernon
Dhanda, Mr. Parmjit
Harvey, Nick
Joyce, Mr. Eric
MacDonald, Mr. Calum
Miller, Mr. Andrew
Murphy, Mr. Jim
Palmer, Dr. Nick
Robertson, John
Timms, Mr. Stephen
White, Brian
NOES
Greenway, Mr. John
Hoban, Mr. Mark
Lansley, Mr. Andrew
Robathan, Mr. Andrew
Whittingdale, Mr. John
Question accordingly agreed to.
Clause 89 ordered to stand part of the Bill.
Clause 90
Notification of contravention of condition
Mr. Greenway: I beg to move amendment No. 105, in
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