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Mr. Timms: The regime set out in the Bill will apply to all spectrum users. We will not make exceptions for individual broadcasters. As I said, I am confident that we will be able to develop arrangements that meet the obvious concerns that arise when people face the prospect of new charges. However, I do not envisage S4C being left out of the arrangements.
The hon. Member for Lichfield asked whether the BBC might be forced to give up spectrum. That would not happen as a result of the impact of anything in clause 149, but the hon. Gentleman returns to the topic from time to time.
Ofcom will have the same powers as the Radiocommunications Agency has now to manage
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spectrum, including unused spectrum, efficiently. We are not providing draconian new powers that are not available elsewhere, much though the hon. Gentleman might wish that we were. However, the charging arrangements will provide significant new incentives for spectrum users to relinquish spectrum that they do not use. That will be one of the major benefits of the new arrangements, and a number of people who are occupying spectrum now will find it to their advantage to give it up.
10.45 am
Michael Fabricant: The example I gave was not of unused frequency. What I had in mind happens, sadly, with some regularity. If the frequency used for a local radio transmission such as BBC Radio Essex—I do not know whether that was the one—had been surrendered and swapped for another VHF frequency, a national radio network could have been established, but that did not happen, with the result that there are now three, not four, national radio networks operating under the auspices of the Radio Authority.
Mr. Timms: The charging and trading arrangements that we are putting in place will provide new incentives for spectrum users to make the sort of change that the hon. Gentleman is calling for, and to relinquish or swap frequencies. A valuation mechanism will increase the incentives for them to do so. That will help to achieve the objectives that he describes, which everyone would support.
Mr. Lansley: I am grateful to the Minister for the nature of his response, and I do not want to appear churlish. I understand that clause 149 has travelled some distance, and that it is much more explicit about the potential for a harmonised set of duties to be applied across all spectrum use and management.
I confess that I had not understood that there were particular circumstances—I would hard-pressed to find them—in which the duties in subsections (1) and (2) or the factors to be taken into account would not be relevant to the activity of spectrum management by Ofcom. However, given the Minister's explanation that they would have to be literally not relevant for Ofcom not to have regard to them, I am content. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 149 ordered to stand part of the Bill.
Clause 150 ordered to stand part of the Bill.
Clause 151
Directions with respect to the radio spectrum
Mr. Lansley: I beg to move amendment No. 293, in
clause 151, page 137, line 30, leave out '3A' and insert '3'.
The Chairman: With this it will be convenient to discuss the following:
Amendment No. 294, in
clause 151, page 137, line 31, leave out from 'licences' to end of line 32.
Amendment No. 322, in
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clause 156, page 140, line 45, leave out subsection (3).
Government amendment No. 306.
Amendment No. 323, in
Amendment No. 324, in
Amendment No. 325, in
Amendment No. 326, in
clause 159, page 143, line 18, leave out 'or made'.
Amendment No. 327, in
Amendment No. 328, in
clause 159, page 143, leave out lines 34 to 36.
Government amendment No. 307.
Amendment No. 305, in
Mr. Lansley: Of this group of amendments, Nos. 293, 294 and 305 stand in my name. In debating them, we anticipate to some extent the debate on recognised spectrum access, which we first encounter in clause 151, but this may be the right time.
Amendments Nos. 293 and 294 would remove from the directions that the Secretary of State can make reference to what will become section 3A of the Wireless Telegraphy Act 1998, which is about bidding for grant of recognised spectrum access. One would need subsequently to remove the relevant part of clause 156. The amendments would remove the references to recognised spectrum access and the potential for the Secretary of State to make directions in that respect. This is the first of a series of amendments, and we will deal with the views to which they relate in our consideration of subsequent clauses. One needs to disentangle and remove recognised spectrum access from subsequent clauses in order to accomplish the task effectively, which is what amendments Nos. 293 and 294 would do.
The Joint Committee considered recognised spectrum access only briefly, and many of my colleagues found it difficult to understand the nature of the Government's intentions. The Minister assures us that it is not the Government's intention simply to raise money. However, if that is so, it should be clear that the Government seek to achieve better spectrum management by granting recognised spectrum access. That should be apparent not only to the Government, but to the people who use spectrum and in whose interests the more efficient use of spectrum management lies. Most of those who would be affected by the granting of recognised spectrum access say that they see only difficulty and expense arising from it.
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I shall not talk at great length about the issue, but it is difficult to build an incentive based on opportunity costs on to a system such as recognised spectrum access that is, in effect, voluntary. Those who want to comply with it will do so happily, because they secure some benefit. However, they may then be charged substantially more than the cost of providing that service. Those who do not see any benefit to them can simply walk away from it. The Government are therefore proposing only to deny them a service with which they were previously provided. We easily return to a situation in which it appears that the Government, by denying a service to people who currently have access to the spectrum, require those people to pay money to the Government to continue receiving a service at levels that are designed not designed simply to recover the costs involved in providing that service, but to reflect the opportunity costs of spectrum, which is not in the Government's gift to give.
The Trade and Industry Committee, of which I am a member, adopted the language of someone who gave evidence to us when it described that system as a protection racket. Where Government undertake the task of allocating spectrum that is in their gift to allocate, it is entirely reasonable that it does so on the basis of efficient use and opportunity costs through administrative pricing. To do so in relation to spectrum that it is not in their gift, however, is excessive. Amendments Nos. 293 and 294 are based on the proposition that the Government should simply give up recognised spectrum access, which many other amendments echo.
Amendment No. 305 applies if the Government believe that there is a continuing purpose for recognised spectrum access, if the material supplied to the Joint Committee and the Trade and Industry Committee seeks to offer illustrations of that in relation to those who receive Met Office data, and if it is conceivable that there are users of spectrum who are not required to have a licence but who receive benefits from the Radiocommunications Agency, or from Ofcom in due course. The amendment also applies if it is reasonable that those people should make some contribution and want to have a handle on the service that is being provided to them.
The amendment relates to schedule 17, which amends section 2 of the Wireless Telegraphy Act 1998 and provides that Ofcom can prescribe sums that are payable for grants of licences and recognised spectrum access. That would enable Ofcom
''to prescribe sums which would be greater than those that would be necessary for the purposes of recovering costs incurred by them in connection with functions under the enactments''.
That is the gateway to the incentive and opportunity cost pricing of the grant of a licence, or the grant of recognised spectrum access. The intention behind my amendment is that section 2(2) should be disapplied in respect of grants of recognised spectrum access. Hon. Members will see on page 489 of the amendment paper that the mechanism for that is a new subsection (2)(a), which disapplies subsection (2) in respect of the grant of recognised spectrum access.
Ofcom would still be able to prescribe sums greater than the costs incurred in respect of the grant of a
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licence, so administrative incentive pricing would be unaffected in relation to the grant of licences. Ofcom could make a charge for recognised spectrum access, but only in relation to costs incurred. It would not, therefore, be possible for the whole rigmarole of incentive and opportunity cost pricing to be applied to recognised spectrum access.
In effect, the whole protection racket element would be removed. If someone wished to apply for recognised spectrum access that would be fine. If they wanted a service that Ofcom could provide, it would have the power to charge for the costs that it incurred. There would be no point in bidding, so amendment No. 292, which would remove bidding for grants of recognised spectrum access, would still apply and clause 154, which enables people to apply for recognised spectrum access, would still be in place. Amendments Nos. 293 and 305 are connected in that sense, and they are needed to achieve the objective of depriving the Government of their protection racket and enabling them, through Ofcom, to provide a service to those who want to purchase one.
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