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Baroness Buscombe: I thank the Minister for allowing me to intervene. We believe that the mobile phone industry has got this right. We are all in agreement in principle as regards what we are trying to achieve, but there is deep concern that the amendments, as currently drafted, threaten to put in place a measure that is simply unworkable and impractical. Therefore, would it not be better to withdraw the amendments at this stage and arrange a further meeting between now and the Report stage that could involve the DCMS as well as the DTI?

Lord McIntosh of Haringey: When I am in this position—that is, waiting to discover whether or not

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the Opposition will press an amendment—I stay silent. I wait until those concerned make up their minds on what to do. Then, if a Division is called, I rush out of the Chamber and put a message on the pager. The noble Baroness, Lady Buscombe, could have given me that credit. I was leading up to say that, on the issue of consultation—and only on that issue—I think it would be preferable for the consultation to continue. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 122B to 122D not moved.]

Clause 117 agreed to.

Clause 118 [Approval of code for premium rate services]:

Baroness Buscombe moved Amendment No. 123:

    Page 112, line 18, at end insert—

"( ) that the provisions of the code will not discourage innovation and investment in new forms of content-based communications services;"

The noble Baroness said: Clauses 117 to 121 set out the basis for regulation of premium rate services (PRS). UK mobile phone operators welcome the Bill's requirement for co-regulation in this area. However, there is concern that the new powers being granted to the existing PRS regulator, the Independent Committee for the Supervision of Standards of Television Information Services (ICSTIS), could be used to regulate new forms of mobile content. Despite falling under the definition of PRS in the Bill, such services may not warrant regulation.

Premium rate services offer consumers a wide range of information and entertainment services—such as news and weather, sport, traffic updates, competitions and adult content—via fixed telephone, fax, PC (e-mail/Internet), interactive digital TV and mobile telephone, which would include voice, text, WAP or the Internet. The cost varies between 10 pence per call to 1.50 per minute. The money paid for the call is shared between the telephone company carrying the service and the organisation providing the content.

PRS regulation was originally invented to deal with pricing transparency of telephony offered over BT's network by service providers. As the money was collected via the BT bill, the service provider had no relationship with the customer and, therefore, had no incentive to behave scrupulously towards consumers. Hence the need for regulation. The UK mobile phone operators and ICSTIS have been working closely with the Government to ensure that the Communications Bill continues to provide consumer protection in the area of PRS.

However, third generation (3G) mobile phone networks will offer innovative new content services, such as news video clips. Such services are likely to be defined as PRS under the Communications Bill, despite many of these services being directly provided by a network operator to its customers. Therefore, there is every incentive for a network operator to ensure a transparent and competitive price for such a service, with little room for unscrupulous behaviour. The failure of a network operator to behave

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responsibly would result in that operator losing customers to its competitors. In such circumstances, competitive forces rather than prescriptive regulations will ensure that consumers are adequately protected.

A good example of that is an Internet service that is accessible via a fixed-line or mobile network for video conferencing. Under the existing ICSTIS code, on-line services are not to cost more than 20 and must be terminated by forced release; that is, the call is automatically cut off. For the most part, that is a sensible way of ensuring that consumers do not unwittingly run up large bills. However, for specialist applications such as video conferencing, that limit could render the product unusable because the consumer could not spend more than 20. Therefore, the amendment seeks to ensure that regulation is not applied in a manner that will discourage investment and innovation in new mobile content services and where there is no obvious consumer detriment warranting regulation. I beg to move.

Lord McIntosh of Haringey: I do not want to inhibit debate, but I said all that I want to say about this amendment in our debate on the previous amendment. I merely add that the 20 limit can be revised and almost certainly will be. I suggest that we add this issue to the matters that will be discussed when we consider the amendments that we have just debated.

Baroness Buscombe: I am grateful to the Minister for his response. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 118 agreed to.

Clauses 119 to 130 agreed to.

5.15 p.m.

Clause 131 [Restrictions in leases and licences]:

Baroness Buscombe moved Amendment No. 123A:

    Page 123, line 24, at end insert—

"( ) The question whether consent has been unreasonably withheld in any case falling to be determined in accordance with subsection (5) shall be determined by OFCOM.
( ) Where OFCOM has made such a determination, proceedings for breach of any provision of a lease or other agreement falling within subsection (2), which consists of or includes failure to obtain consent before doing anything to which that provision relates, shall not be instituted or continued in any court."

The noble Baroness said: This amendment, Amendment No. 125A and a new clause were tabled and debated in another place. I return to them again to probe a little further. The answers provided by the Government at the time were rather brief and lacking in detail. It would be helpful if the Minister gave some additional guidance.

I shall first give some background. At present, many occupiers of leased and rented properties, as well as many freehold property owners, are prevented from obtaining television and telephony services from the provider of their choice because of restrictions in their leases, tenancy agreements or—in the case of freehold

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property owners—a restrictive covenant. For example, if one lives in Milton Keynes, one cannot put an aerial or satellite dish on one's house, whether one owns or rents it. Unless one breaks the law, one must take television from the cable company. That denies the residents of Milton Keynes a choice that they may want and it leads to considerable dependence on one provider. As we saw with the demise of Aberdeen Cable, it also has unfortunate consequences for the householders who, in that case, were left without telephony services.

Landlords, as well as landowners and property developers, impose such restrictions for a number of reasons. Sometimes they consider, for example, that the installation of a satellite dish will damage the fabric of their building or somehow cause it to be perceived as a less desirable place in which to live. Sometimes it is simply force of habit to impose such conditions. Very often, those restrictive covenants will have found their way into standard leases and other freehold agreements and are put forward by the lessor or vendor, or his solicitors, with little thought at all, other than a desire to retain as much control over the premises as possible for the lessor or vendor. It is acknowledged that lessees and owners can try to have such restrictions removed but unless the landlord or those with an interest in the covenant willingly agree to that—in that case, why are the restrictions imposed at all?—the process is slow, expensive and cumbersome, involving the Lands Tribunal and arcane law.

The fundamental fact is that lessees and owners generally want to continue to live in their accommodation and are disinclined to do anything that may irritate or upset their landlord or other neighbours and be in breach of their leases or covenants. As a result of the risks involved, the bureaucracy that I have already outlined and quite understandable human behaviour, many lessees and owners are denied a choice of supplier when it comes to television or telephony. I venture that that is contrary to their human rights under Article 10 of the European Convention on Human Rights. I also suggest that it is unhelpful to the Government's objective to switch off analogue television and to achieve higher levels of broadband penetration and Internet access for all. If, for example, a householder is unable to receive digital terrestrial television and there is no cable in the street, unless he can erect a satellite dish, he will be unable to switch to digital television. In many vital areas, he will also be unable to receive broadband.

The Government have acknowledged that a problem exists and are consulting on the deregulation of planning rules, which restrict or prohibit the installation of satellite dishes. The amendments would help them to achieve their objectives.

That is the background which Clause 131 as drafted seeks to address. In other words, we believe that it has good intentions. It permits lessors not to grant their consent to the occupier's request to consent regarding any relevant restriction provided that he—the lessor—does not act unreasonably. That was seen to be an

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appropriate balance between the rights of lessors and lessees. I believe, however, that Clause 131 does not go far enough to give lessees and tenants true freedom in practice to choose their television or telephony supplier or make it easier for them to exercise that choice. In particular, it does not address the issue of restricted covenants in freehold property. That is the purpose of the new clause and the amendment.

In another place, the Government indicated, in principle at least, that there was some support for the logic of the clause but failed to go much further. The best that they could offer was that they would review the issue in their review of the working of the new provisions in the Bill. The reasons provided were that making changes to property law is a hazardous undertaking with unintended consequences. Consultation and consideration of any proposals would take significantly longer than the time available during the passage of the Bill.

It is difficult, however, to see why the inclusion of the new clause in the Bill would present such problems. The amendment would require the Secretary of State to consult Ofcom and such other persons as appeared to her to be appropriate, before bringing the clause into force. In other words, under the amendments it would be possible to iron out any potential problems before implementation. I therefore suggest that the Government should accept the proposal because it meets their concerns.

Further, at present, whether a provision is unreasonable is determined under Clause 130(5). Presumably, that will be done by the courts, although the clause is silent on that matter. Therefore, protracted judicial proceedings may still be involved to secure the lifting of the restriction. Clause 131 therefore maintains a situation in which the onus is placed on the lessee or tenant to request the lessor's waiver of the restrictions. However, it turns an absolute restriction into a qualified one. The contractual effect of that is that if the lessor withholds his consent unreasonably, it puts him in breach of contract. That does not give the lessee carte blanche to proceed as if the restriction were not there; rather, the lessee would need to take action against the lessor for breach of contract via judicial proceedings, which may be time consuming and costly and which many lessees will consider too troublesome to pursue.

We therefore need a much simpler and less daunting process. Accordingly, we seek to amend Clause 131(5) so that the question of whether something is not unreasonable shall be determined in accordance with Clause 131(5) by Ofcom. Where Ofcom acts, proceedings shall not take place in the courts. That means that, if Ofcom decides that a lessor has unreasonably withheld his consent, the lessee may proceed as if the consent had been given. That would not put the lessee in breach of his contract with the lessor.

In another place, the Government indicated in response to the amendment simply that the courts should consider the test and that that was not an appropriate role for Ofcom. No further reasons were given. That was not an adequate response. That is why

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I return to the issue. Why, for example, is it not an appropriate role for Ofcom? Ofcom is, after all, responsible for looking after the interests of the community and consumers in relation to electronic communications networks and services. It is well placed to deal with that issue. Why are only the courts able to deal with the issue? Surely, if there is a way in which the difficulties for lessees that I have described can be addressed fairly and in a quicker and less costly manner, it deserves more careful consideration and explanation. I hope that that is what the Minister will give us. I beg to move.

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