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Digital Economy Bill [HL]

My Lords, I am grateful to the noble Earl, Lord Erroll, for being more explicit in the note which he delivered to the department than he has been in proposing the amendment. We know exactly the point at which he is driving, although we are going to ask him to withdraw his amendment. I hope that he will listen carefully to the reasons why, because we have given it the fullest consideration. Included in the Government’s spectrum proposals, now before Parliament, are temporary spectrum caps that apply to the planned combined auction of 800 megahertz and 2.6 gigahertz spectrum. These caps are designed to ensure that the acquisition of valuable spectrum is spread more equitably between existing operators and new entrants. In certain circumstances, operators may therefore have to release existing spectrum to be able to bid in the combined auction. In those circumstances, costs will be incurred by the releasing operator in clearing their released spectrum. To offset these costs, it is proposed that additional payments are made by any operator acquiring this relinquished spectrum to the operator releasing it. At present, this additional payment relates only to spectrum released in order to stay within the limits of the caps. However, these amendments would extend that payment to any spectrum released into the combined auction. In particular, it would potentially include spectrum being released by T-Mobile and Orange, required by the European Commission as one of the conditions necessary to gain its approval for the joint venture. In effect, these amendments would allow the joint venture to receive a payment from another operator to subsidise the cost of its obligations to the European Commission, which we do not consider to be reasonable. The two companies involved are likely to benefit considerably from the joint venture. Indeed, they would scarcely have thought about it and have embarked upon the venture if that were not the case. But there are costs associated with the joint venture and in obtaining the approval of the Commission it is only right that those costs are borne by the operators concerned and not by any other operator which will not benefit from the venture. That is why the Government have taken the position that they have. I hope that the noble Earl will feel that that is reasonable and that he can safely withdraw his amendment.