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The interim report makes 22 recommendations to achieve these objectives, and I will set some out for the House today. Britain must always be ready to benefit from the latest advances in technology, so we will establish a group to assess measures to underpin existing market-led investment plans for next-generation access networks. An umbrella body will also be set up to provide technical advice and support to local and community networks. To facilitate the move to next-generation mobile services, we are specifying a wireless radio spectrum modernisation programme. In addition, the Government are committing to enabling digital audio broadcasting to be a primary distribution network for radio in the UK and will create a digital migration plan for radio. We will consider how the digital TV switchover help scheme can contribute towards this agenda.
We will maintain our creative strength only if we find new ways of paying for and sustaining creative content in the online age. We will therefore explore the potential for a new rights agency to be established and, following consultation on how to tackle unlawful file-sharing, we propose to legislate to require internet service providers to notify alleged significant infringers that their conduct is unlawful.
Our third objective, high quality UK-made public service content, will be achieved by sustaining public service broadcasting provision from the BBC and beyond. The report identifies news at local, regional and national level, and children's programming as among the key priorities.
The BBC as an enabling force is central to this: strong and secure in its own future, working in partnership with others to deliver these objectives. We will also explore how we can establish a sustainable public service organisation which offers scale and reach alongside the BBC, building on the strength of Channel 4. We will consider options to ensure plurality of provision of news inthe regions and nations, and we are asking the Office of Fair Trading, together with Ofcom, to look at the local and regional media sector in the context of the media merger regime. We will also consider the evolving relationship between independent
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Our fourth objective of fairness and access is, of course, crucial to delivering the Government's policy of an inclusive society where new opportunities are available to all and nobody is left behind. So we are developing plans to move towards a universal service commitment for broadband and digital services to include options up to 2 megabits per second, building on the approach to postal services and telephones in centuries past. We will also ensure that public services online are designedfor ease of use by the widest range of citizens.
Lastly, to help people navigate this vast and often-changing world, the report makes recommendations to improve media literacy and, in particular, to give parents the information and tools necessary to protect children from harmful or inappropriate content.
The Government have today set out a vision to make sure that Britain reaps the full economic and social benefits of the digital age. An intensive period of discussions with industry partners and others must now begin to turn these initial conclusions into firm solutions. A final report will be presented to Parliament by the summer.
In publishing this interim report today, and making this Statement to the House, we seek to invite Members from all sides of the House to engage in the debate around these fundamental questions that will shape our country's economy and society in this century”.
I commend the Statement to the House.
2.08 pm
Lord Luke: My Lords, I thank the Minister for repeating the Statement and for the advance notice of both the Statement and his report. However, I am sorry to say that it was something of an anti-climax. The report will be greatly disappointing for anyone looking for concrete action from the Government to equip Britain for the digital economy.
We all recognise the huge value of the digital and communications sector to the United Kingdom. It is vital for our long-term prosperity that we develop a world-class, highly competitive and universally accessible digital sector. Indeed, given the Government’s deepening recession, I should have thought that it would become a priority to look at that sector, which has huge potential for growth in productivity.
Britain has great natural strengths in creating digital content, but we do less well on the delivery of that content. We have fallen down the league table of digital adoption skills. Indeed, 40 per cent of households have no broadband at all, with connections even falling last year. Yet the interim report published today conveys no sense of urgency. There are no concrete pledges and only eight new reviews. Does the Minister not recognise that the digital, communication and creative sectors of our economy, and indeed far beyond, will have been waiting to hear what steps the Government will take to help usher in a fully digital age, and that the promise we have received of more reviews is hardly inspiring? Is there any chance that the full report, which is promised for the summer, might be more positive?
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The overall impression given by the interim report is that this Government are treading water. We have already had numerous reviews on these issues: from the Cox review of creativity in business, in March to December 2005, to the Caio review and report, The Next Phase of Broadband UK, in February to September 2008, and the ongoing Broadband Stakeholder Group, among others.
I hope that the Minister can answer questions on matters which the interim report did not make clear. The report says that the Government will,
- “work with ... operators ... to remove barriers to the development of a ... wholesale market in access to ducts”.
If BT, which owns the ducts, does not co-operate, will the Government force it to open them to other suppliers, as we Conservatives have pledged?
On copyright protection, instead of a solution, the Government propose to set up a new quango with a new tax on internet users. Why do we need another agency when Ofcom is already equipped and able to do that job? And why should legitimate internet users have to pay for the copyright infringement of transgressors?
On the universal service obligation for broadband, we welcome the long delayed commitment to ensuring that everyone has access, but who will pay for this? The aspiration is a fine one, but we really need to know what the Government’s strategy is. The Government say that the commitment should be for 2-megabit access. Given that the national average access speed is 3.6 megabits, is not the scale of the Government’s ambitions pitifully low, saying simply that they want to ensure that the whole population has access to half the current average speed by 2012? It is one thing to promise universal access to broadband, but if it is too slow to be useful, especially in rural areas, the exercise is entirely pointless.
On peer-to-peer file sharing, the Government talk about consulting on legislation, but can the Minister tell me how ISPs are supposed to identify illegally shared files, given what happened in France, where many users simply reacted by encrypting their files when the French Government introduced similar measures?
These are just some of the questions that must be answered, so I am dismayed that all that we have been offered is the promise of more reviews. A Conservative Government will make it a major priority to ensure that over half the population has access to high-speed broadband within five years, providing a platform for thousands of new businesses and jobs. Does the Minister agree that this should be an objective that they will deliver? The country should not have to wait for a general election for this to start; the Government need to take action now.
2.13 pm
Lord Clement-Jones: My Lords, I join the noble Lord, Lord Luke, in thanking the Minister for repeating the Statement. In a sense, it was almost not a repetition of the Statement, as it is his own Statement in many ways.
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I very much welcome the Government’s new focus on the digital economy and the creative industries. It is perhaps because of the rather reduced state of our financial services industries that we are now constantly reminded, not least at the Golden Globe awards, of the importance to Britain of those industries. I welcome the review’s emphasis not only on the economics of the creative industries and digital Britain, which are important, but on the very important matter of fairness. Access is vital, and inclusion is a key objective. In all this, inclusion is one of the big challenges that we face. The problem with the review, which is much more interim than many of us expected, is that its conclusions are rather thin on the ground and it gives rise to more questions than it answered.
My comments today from these Benches are rather more about the plumbing than the poetry of the report, to echo a phrase used by the Minister. For a start, we are very pleased with the affirmation of support for the BBC. We are also pleased with the statement that there must be a plurality of provision in public service broadcasting. The BBC should definitely not be the sole provider of PSB, and there is a clear recognition that the economic models of public service broadcasting are changing.
Our own preference on these Benches is for partnership between the BBC and other public service broadcasters, not for top slicing. We are also completely of the view that a merger between Channel 4 and Channel 5 is not a viable option. We are rather baffled by the fact that there is no statement in the report either about top slicing or about the inadvisability of any kind of merger option. We favour some kind of co-operation between Channel 4 and BBC Worldwide, but there is very little detail in the report on that, despite the fact that Ofcom reported only very recently on precisely those aspects. This lack of conclusion about PSB is very disappointing.
There is recognition in the report that content perhaps needs support. Indeed, support is vital in the context of particular parts of the creative industries where there is market failure of some kind and the British product is disadvantaged. We are thinking particularly about children’s television and computer games. I very much hope that the Minister can assure us that he is in deep discussion with the Treasury on these issues, because tax incentives for these content-driven industries are absolutely vital.
We also welcome some of the statements made about the migration to DAB universally, but there is very little detail in the report on the Government’s aspiration for the switchover date.
I must admit that, despite being a lawyer, I am rather confused by some of the interim review’s statements about copyright. There is a statement that internet service providers will be obliged to notify individuals that their conduct is unlawful, but what happens after that? Who will be responsible for prosecution? A new rights agency is proposed, but I cannot for the life of me see why the Intellectual Property Office should not carry out those duties. Mr Lammy has stated previously that the UK will not legislate on piracy, so I find the whole set of statements in the review extremely confusing.
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Universal access to broadband is absolutely crucial. There is a lack of ambition, however. As has been mentioned, the average speed currently experienced by broadband users is something like 3.6 megabits per second, so why are we not aiming for the universal provision of super-fast broadband instead of broadband at 2 megabits per second?
Briefly, I also welcome some of the elements of section 5.1, on education and skills in the broadband area. I welcome some of the current projects, such as Find Your Talent, which is a very welcome initiative that recognises that times are changing and that we must inspire young people to find their own way to a creative future. There is a difficulty, however. We know that there has to be personalisation and participation and that parents need to get involved, but in addition to worthwhile projects there must be an overall strategy that includes equipping teachers with the right approach and skills. We also need to encourage partnerships with cultural institutions and the creative industries. How much cross-government co-operation is taking place between the DCMS and the DCFS?
Decisions were promised at this stage. It is disappointing that there is so little detail on PSB. We are in danger of getting behind the curve. The competitive situation with other countries has been mentioned. We must speed up our decision making. I hope that the Minister can reassure us in that respect that the final report really will be definitive.
2.20 pm
Lord Carter of Barnes: My Lords, I thank both noble Lords for their responses to the Statement. If we are trading disappointments, I am rather disappointed by their respective disappointments. The report clearly says that it is an interim report. We have been clear from the beginning that this process would come in two stages because we were seeking to resolve some significant questions. I can but imagine what the response from the two noble Lords would have been had we brought determinative answers on every single one of these issues without any form of proper analysis, consideration or consultation.
As both noble Lords have identified, these are profound questions about connectivity, infrastructure, content, rights and legality. We have been working on this project for 11 weeks. I struggle with the notion that we are being slow.
The noble Lord, Lord Luke, asked specific questions on where we have offered certainties. We have offered real certainties on at least eight of the 22 areas. We have said determinatively that we will commit to digital audio broadcasting and radio. We have said determinatively that we will commit to the funding and creation of a second public service provider alongside the BBC. We have said that we will commit to the creation of a universal service commitment in broadband for the first time.
On the point about speed raised by both the noble Lords, Lord Luke and Lord Clement-Jones, “up to 2 Mb/s” is the phraseology in the document. That would be the most ambitious universal service commitment of any country in the world. However, to be clear in the interests of the debate, we are in no way,
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I would be the first to say that that is a bold step. I have been working in this industry for 10 years. Only eight and half years ago, we sold the first ever broadband connection in this country. Only four years ago we introduced the framework to give us the most competitive market in the world. To introduce the suggestion of a universal service commitment today is a significant step, and one that will be welcomed by industry and users alike.
The next-generation access question, raised by the noble Lord, Lord Luke, is a significant infrastructure question for the United Kingdom. We make a clear case in the document that there is good evidence that the market will provide significant investment for up to 60 per cent of the country, and perhaps more. Of the remaining 30 per cent, however, there will probably be a question of the case for public incentives. We make it clear that we will do the work on that and bring back our answers before the summer.
On rights and content, I absolutely share the view of the noble Lord, Lord Clement-Jones, that the creative and content industries are a powerhouse sector in the British economy and one of which we should be rightly proud. We must find a way to find a platform for those industries to continue to innovate, be the envy of the world and thrive in the new world which we describe in the report, while giving them a legal framework.
To describe the rights agency as a quango is both inaccurate and unhelpful. It is, as suggested, as co-regulatory industry grouping. We have four examples of that already in the communications sector, which work extremely effectively. We have, in the mobile telephone sector, ICSTIS, now PhonepayPlus, paid for by a small levy: 0.34 per cent of revenue of any participating company. It provides a safe framework for the development of the mobile telephony industry, giving it freedom to adapt with the changing circumstances of technology. In the advertising industry we have the BACC, a clearance and screening group, again paid for by a small, level, levy, to provide a point of gathering for the industry to share technology standards and applications that could help resolve the content and peer-to-peer filesharing questions.
The legislative backdrop on infringement is necessary. We have listened long and hard to the content industries and believe that we have struck the right balance between providing a legislative backdrop while at the same time not trying to put in place in legislation what might be unworkable firm solutions.
On the BBC, we are clear in the report that the BBC will be a mainstay of any future market. We are equally clear that it needs to continue to accelerate its approach to partnerships and engagement with the rest of the industry. However, we are, I hope, also clear that we wish to create a second large-scale public service provider. Indeed, there has been much discussion
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We have made a clear statement in the report that we accept those recommendations; that we commit to the creation of a second large-scale provider; and that, between now and the summer, we wish to do the work, the due diligence, on how to construct that and create an organisation that is both sustainable as well as conceptually desirable. That is a significant task of work. It is not an easy thing to do and must be done with due care and attention, not least because we are talking about the value for money questions of public assets. We will do that work, and I am confident that, when we have done so, we will end up with a recommendation that we can bring to this House and the other place to give us two large-scale UK content businesses of which we can all be proud.
2.26 pm
Lord Fowler: My Lords, I have two quick questions. First, will the Minister confirm or deny the report in the Times this morning that:
“Top executives from media and telephone companies will go to 10 Downing Street to hear about Digital Britain before the plans are presented to Parliament at lunchtime”?
Did they do that? Of course, if they did, that would have been smack against the Ministerial Code. We all get into problems when rules are not observed.
Secondly, following the important point of the noble Lord, Lord Clement-Jones, will the Minister explain what is meant when the Secretary of State says:
“We will also explore how we can establish a sustainable public service organisation which offers scale and reach alongside the BBC, building on the strength of Channel 4”?
“Public service organisation” sounds like much more than partnership, which is what the noble Lord, Lord Clement-Jones, was actually arguing for. It seems to imply some kind of merger for Channel 4. The Government and others have already floated ideas of Channel 4 coming together with either BBC Worldwide or Channel 5. Is not the essential problem there that BBC Worldwide hates the idea of the former and Channel 4 hates the idea of the latter? Both those options appear to have been torpedoed.
As we are in a consultative period, and leaving aside the licence fee, can we take it that, in planning forward, no new public money will be available to help Channel 4? Is that the implication of what is being said? It is important that we are clear where the Government stand on this.
Lord Carter of Barnes: My Lords, on the noble Lord’s first question, there was indeed a breakfast this morning in Downing Street. I assure the noble Lord that, much to the frustration and disappointment of the people at the breakfast, there was no prior disclosure of the report or discussion of its recommendations.
Lord Fowler: What did you talk about, then?
Lord Carter of Barnes: We exchanged pleasantries over pastries, my Lords, and had a broad and far-ranging discussion about the future of the communications industries. We touched on some of the broad themes that one would touch on in the introduction to any
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On the substantive question around the second public service organisation, I divine a slight sense of frustration from the noble Lord, Lord Fowler, and other noble Lords about the wording in the document and a yearning desire for clarity. Believe you me, no one has that desire more than I. We have chosen the words carefully because, at this stage, we are right to. What do we know for certain? We know that Channel 4 exists today as a statutory corporation funded almost entirely by advertising revenues. We also know that, on any independent analysis, that business is facing significant short-term and medium-term challenges. We also know—the noble Lord, Lord Clement-Jones, made this point—that having competition to the BBC is desirable. That is a generally held view, which this Government endorse.
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