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Baroness Buscombe: My Lords, I support the amendment. Actions speak louder than words. My noble friend Lord Baker has just said that, and I add the support of Her Majesty's Opposition to my noble friend's amendment.

Lord Lucas: My Lords, I support the amendment. We are looking at a technology that will, I suspect, over the next 10 to 30 years, give us the opportunity to transform our society and deal with a great number of the ills that we face now. Many of our troubles stem from shipping people around in order for them to get to work. The reason for having to go to work is that that is the only way in which one can communicate easily with other human beings. If one can be at the end of high speed data transfer—I agree, not broadband as it exists but, looking 10 years ahead, that envisaged by my noble friend Lord Crickhowell. Even further ahead—it will be possible, if we get this right, to be sitting 20 miles outside Aberystwyth and acting as if

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one was in an office in the City of London. Many people will feel that 20 miles outside Aberystwyth is a better place to be on a summer afternoon than the middle of the City of London.

Therefore, we have an opportunity to bring commercial life back to parts of the United Kingdom that have been cut off. That might start from the peripheries, but could edge into any part of the countryside, including those day-deserted villages that we are all becoming used to in southern England, filled with commuting families who disappear during the day. All that has the potential to change and to produce a better environment, a better society in those localities, and to reduce some of the major problems which the Government have to tackle in terms of pollution and transport.

However, to do that requires the impetus to attract infrastructure that only a government can give. Operating ahead of time is something that requires Government initiative. I know that my own party has failed to understand that at times. That is why Docklands was for so long inadequately provided for. The party that is the Government now should understand—because it always did in opposition, the role that government has in such matters.

Here we are, faced with a need to achieve high speed data transmission around the country, and the need to have Ofcom see that as one of its principal and stated objectives. In various subsections of Clause 3, Ofcom has many other competing interests that it is supposed to balance. Unless that is stated as one of Ofcom's main objectives it will be merely one of its objectives that are not stated, and be reduced to "level two".

Several of my noble friends have referred to the radio spectrum. That appears to be crucial. It is difficult to see how we could extend broadband to Aberystwyth through fixed links. That probably has to be done through the radio spectrum, but crucial sections of the radio spectrum are hogged by various government and quasi-government entities. If I am correct, the crucial part of the spectrum is around 2 gigahertz, and the Government have no intention of freeing up any of that.

Ofcom is faced with the need to shift existing users in order to make room for something new, but at the moment the Bill does not give the impetus and direction to do that. We must realise that making room for broadband—rural means anything more than five kilometres from a decent-sized exchange—means dealing with areas that one might think of as semi-urban or commuter-belt England. One is not dealing with the wild, wet moors, but with great tracts of middle-class countryside. If those are left outside that development, and Ofcom is not given the direction and impetus required to make sure that business can operate as happily from a Hampshire village as from the middle of London, then one will have a continuation of the current transport and lifestyle problems that are causing difficulties for the Government in other areas. It is now time for the Government to think inter-connectedly, and to realise that they have the opportunity in the DCMS to solve

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problems that are afflicting many other government departments if they give Ofcom the impetus. I hope that we shall see a change of heart.

Lord Northbrook: My Lords, I support my noble friend Lord Northesk in his amendment. I add my concern to that of my noble friend about the rollout of broadband via the 3.4 gigahertz spectrum. The auction ended with one company, PCCW, winning all but two of the licences on offer. At its peak, PCCW was a key player in the telecoms market, surprising the market with its purchase in 2000 of Cable and Wireless's HKT Hong Kong phone monopoly for 28.5 billion US dollars. Since then, PCCW shares have lost 95 per cent or so of their value. The debts incurred during those years have forced the company to sell its mobile phone arm. As the Economist stated in February:


    "Its net debt exceeded the company's market value".

Therefore, I ask whether PCCW is in any position to start rolling out broadband to rural areas. Should there not have been a role for the regulator to make a judgment on the financial quality of the bidders? As stated by my noble friend Lord Northesk, the terms and conditions of the auction also mean that successful bidders will not have to roll out services. In theory, the company could sit on those assets for another purpose, such as carrying mobile traffic.

We can see that auction does not seem to have produced a sensible list of bidders. We should note that the large companies did not feature in the auctions and that the chief executive of BT retail described it as stupid, although it yielded 7 million to the Government. As a result, it is entirely appropriate to support the amendment to require Ofcom to monitor the whole future process of high-speed data transfer delivery.

6.30 p.m.

The Earl of Liverpool: My Lords, there has been a wide measure of support for the amendment from all quarters of the House. I should like to add my voice in support of it. The noble Lord, Lord Gordon of Strathblane, came up with an interesting statistic, which is that only 7 per cent of rural households have access to broadband; which means that 93 per cent do not. I think that the amendment will improve my chances, along with those of many of my friends both inside and outside the House, of getting broadband, so I support it.

Baroness Byford: My Lords, I shall briefly support my noble friend's amendment. I apologise that I was unable to take part in Committee. This whole question is extremely important to rural areas. Only 10 days ago, we had a debate on the state of the countryside in which six Members spoke of their concern about the lack of broadband provision—if I can use the word "broadband" in that way. Winding up the debate, the noble Lord, Lord Whitty, was surprised that so many had mentioned broadband—I found his surprise surprising, because broadband is essential.

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As noble Lords will know, the farming community has been through some desperate years. Farming incomes have been absolutely on the floor. During the past year, they have improved a little. Farmers are always being encouraged to diversify, diversify, diversify. Something that would help them enormously would be access to broadband. So I wanted during my few moments here to support my noble friend. During that debate last week, I cited the figures, which are that 1 per cent of houses in remote areas have broadband; and 7 per cent of those in villages; compared with 95 per cent in urban areas.

Part—in fact, a large part—of the growth in small and medium-sized businesses is occurring in rural areas. They have struggled, but what a difference it would make to them if they had access to that new technology. I wholeheartedly support the amendment.

Lord Davies of Oldham: My Lords, as my noble friend Lord McIntosh pointed out on several occasions in Committee, broadband is an important policy area for the Government, and stimulating competition in the broadband market is a key part of our strategy. The target for the UK is to have the most competitive and extensive broadband market among the G7 countries by 2005. Competition, coverage and take-up of broadband are all still increasing.

I recognise the forceful points made in the debate about rural areas, to which I shall turn in a moment, but we should recognise how far we have come. According to independent consultants, we now have the third most competitive market in the G7—up from fourth a year ago and overtaking the United States. Of course, more remains to be done. Third place is not our target, but we are moving in the right direction to surpass that. The latest figures from Oftel show that the number of broadband subscribers at the end of May was more than 2 million and rising by more than 30,000 each week.

Of course, we recognise that availability of broadband across the whole of the United Kingdom is a matter of great concern. At the end of March, 72 per cent of households were passed by a mass-market broadband service, cable modem, ADSL, or wireless. We have now caught up with the USA and are still ahead of France and Italy.

Turning to the rural market, the debate provoked several moving speeches about the needs of the countryside and rural areas. We take that most seriously. DTI and Defra Ministers have been working together on broadband in rural areas, where suppliers find it most difficult to make a business model. Recently, they appeared together in front of the Select Committee on the Environment, Food and Rural Affairs, which is holding an inquiry into exactly that subject: the availability of broadband. They also issued a joint statement confirming the Government's aim that every community in the UK, irrespective of location, should have the opportunity to access affordable broadband from a competitive market. They are announcing a joint team to tackle the issues.

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However, I cannot agree that the way to achieve those objectives is by amending the Bill as proposed. Those are matters for government. It is not for an independent regulator to secure, to cite the amendment:


    "the desirability of encouraging the best means"

of broadband access. It is not for an independent regulator to decide what is the "best means" of access. Surely, that is for the market. I am not sure how an independent regulator is meant to secure,


    "the desirability of encouraging",

anything. How would a regulator set about meeting that objective?

More generally, Ofcom needs to look at a variety of markets and not be diverted onto a single market when other equally pressing issues may arise during the lifetime of this legislation.


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