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Digital Economy Bill [HL]

My Lords, Clause 38 is intended to support the Government’s proposals to achieve the spectrum modernisation programme set out in the Digital Britain report. I am having trouble with the noble Lord’s transformation from handmaiden to ancient mariner; that is a terrible ageing process in the space of a few minutes. The proposals, recommended by the independent spectrum broker, have been developed with the objective of enabling the early release of significant amounts of new spectrum into the market, offering the opportunity for existing operators and new entrants to acquire sufficient spectrum holdings that will allow them to deploy next-generation wireless networks, delivering high-speed mobile broadband services to businesses and consumers. An example of the licences that could be affected by the changes enabled by this clause are 3G licences which were auctioned in 2000 and are due to expire in 2021. The Government propose to direct Ofcom to make these licences indefinite, but that annual licence charges will be applied from 2021. The Government believe that this is an appropriate step to take. Further investment is required in 3G networks, but with the licences due to expire in 2021, operators face a difficult decision at a time when capital expenditure budgets are under pressure. By making the licences indefinite, the operators can invest with greater certainty and confidence to the benefit of consumers and businesses alike. Some have argued that we are giving these licences away. This is not the case. The intention is to apply annual licence fees to these licences from 2021, which will reflect full market value. The amount of the charges will be set by Ofcom at the appropriate time. Of course, they will be required to exploit the spectrum that they have efficiently and effectively; at the moment, we have only one remedy—to remove the licence. We think that this gives us more flexibility. On the specific question of the Olympics, I can guarantee that a suitable spectrum has been identified and will be available for the Olympics. I am pretty sure that the same guarantee could be assured for emergency services as well.