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Digital Economy Bill [HL]

We on these Benches also agree with the concerns of my noble friend Lord Lucas about these provisions. Clause 1 adds to the general duties of Ofcom by amending the Communications Act 2003. While we support some of the aims of this clause, we are not convinced that such additions are necessary, as my noble friend Lady Buscombe has pointed out. Taking each duty in turn, proposed new Section (1A)(a) deals with the duty to promote appropriate levels of investment in electronic communications networks. Both sides of the House would agree that we should do all we can to ensure that our communications infrastructure is equipped for the 21st century. We agree that this will require significant investment but are not convinced that this clause is the best way to go about it. The Government’s fact sheet on this section of the Bill states that this legislation will require Ofcom, ""to have particular regard in all cases to the need to promote appropriate levels of investment"." Ofcom already has a duty to encourage investment. As the Minister knows, under Article 8 of the access and interconnection directive 2002, which was subsequently transposed into Section 3 of the Communications Act 2003, Ofcom must encourage "efficient investment in infrastructure". This has been highlighted by Ofcom itself. Its chief executive stated to the Business, Innovations and Skills Committee on 24 November that, ""the notion that we do not concern ourselves with investment and infrastructure is obviously not the case; we do do that"." What would be different in Ofcom’s approach if it were granted this extra duty? We are not convinced that there would be a significant shift in the levels of investment in communications infrastructure as a result of this duty. There are a number of reasons why there may not have been the levels of investment which we would all have liked, particularly in next-generation broadband. Barriers include lack of access for other operators to BT’s ducts, dark fibre and other infrastructure; a failure to make any progress on allowing the use of telegraph poles for overhead delivery of fibre; and business rate anomalies that favour incumbent operators. Her Majesty’s Government should be addressing these issues. The idea that adding a duty to the regulator—if one has been added—will suddenly transform levels of investment in this sector is fanciful. As the Government’s own impact assessment states, ""investment decisions by telecommunications companies depend on a variety of factors which may be specific to the company, the sector or the economy more widely"." If the Government believe that this duty is necessary, indeed, key, to any increase in the levels of investment in the communications sector, we do not share that belief. Indeed, it is worth noting that neither the Government nor Ofcom seem to know what the result of this duty would be. That is hardly surprising, given the doubt about whether there is an additional duty. The Government’s impact assessment states: ""It is difficult to predict with complete certainty what the precise effect of this will be"." The chief executive of Ofcom optimistically looked to these Committee sessions for clarity when he told the recent joint hearing of the Culture, Media and Sport and the Business and Innovation and Skills Select Committees that that will be one of the things that emerges in the parliamentary debate. What does it actually mean? The only thing that the Government seem to know is that such a duty may lead to higher prices for consumers. I turn again to the impact assessment, which states that this duty will, ""allow network providers such as BT to raise the prices"." We on this side of the House do not support a clause that is not necessary, unlikely to lead to the results the Government claim and is likely to mean consumers paying more for communications services. New subsection 1A(b) requires Ofcom to have regard to the need, ""to promote appropriate levels of investment in public service media content"." Again, Ofcom already seems to have the appropriate legislative framework. Section 3(2)(c) of the Communications Act 2003 states that Ofcom must ensure, ""the availability throughout the United Kingdom of a wide range of television and radio services which (taken as a whole) are both of high quality and calculated to appeal to a variety of tastes and interests"." Section 3(4)(a) further states that it must take into account, ""the desirability of promoting the fulfilment of the purposes of public service television broadcasting in the United Kingdom"." Ofcom is already empowered to ensure a wide variety of television and radio services that fulfil public service duties. Does it really need a specific new duty to promote the public service content in general? We are particularly concerned that the definition of public service media provided in subsection (5) is far too broad. The fact sheet accompanying this subsection states that this new duty will extend Ofcom’s duty to promote investment to specific web services meeting specific public service definitions only. However, Section 264(6) in the Communications Act defines public service as content that covers: education and entertainment; cultural activity; civic understanding; sporting and other leisure interests; science, religion and other beliefs; high quality and original programming for children and young people; and programmes made outside the M25 area. These are broad categories and are difficult to reconcile with the Government’s statement that they will apply to specific web services only. Will Ofcom have a duty to promote investment in political blogs such as ConservativeHome or Guido Fawkes or, indeed, your Lordships’ Lords of the Blog? Will Ofcom have a duty to promote investment in newspapers or university websites? Can the Government also confirm that this investment in online services will not be to the detriment of programming on core channels? It would also be helpful to know whether this would give Ofcom power over how the BBC spends the licence fee. Either way, with such a broad definition, the duty could be extended to such a vast number of websites as to become meaningless. The Government must clarify the specific web services they mean. Finally, this clause raises a number of broader issues about the role of government versus that of the regulator. Surely the promotion of investment in one market or another, or in one service or another, is a matter for Government not a regulator. A regulator’s role is to protect the consumer and promote competition. I look forward to hearing the Minister answer these questions and those of my noble friends.