MPs hit out at Comms Bill and Ofcom

Ofcom, the new regulator for the UK's telecommunications and broadcasting market, moved another step closer towards becoming fully operational when the second reading of the Communications Bill was passed on Tuesday evening.

The bill will now enter its committee stage, and is expected to receive Royal Assent next year, leading to Ofcom replacing the five existing regulators before the end of 2003.

During the debate, though, many MPs objected to elements of the bill.

A key concern raised by several who spoke is that Ofcom will do little to improve broadband coverage in rural areas, while some MPs are worried that these same areas may suffer if the analogue TV signal is turned off by 2010.

Nick Harvey, Liberal Democrat MP for North Devon, urged Ofcom to keep companies with significant market power on a tight rein, and to work towards making broadband a universal service - as basic telephony is today.

"We hope that [universal service conditions] will be used progressively to ratchet up the requirement on telecoms providers to make sure that broadband becomes increasingly available in rural areas. It will be a serious blow to constituencies such as mine and those of many of my Right Honourable and Honourable Friends if there is two-track progress on that and rural areas are left out," said Harvey.

According to Derek Wyatt, Labour MP for Sittingbourne and Sheppey, Ofcom should be made to play a role in finding funds for the rollout of broadband networks across the whole of the UK.

"That funding may have to come from part of the licence fee or from a levy on advertising but there must be a way of coming up with an intelligent solution so that the rural and semi-rural communities are not downgraded. That is something that Ofcom must do," insisted Wyatt.

Richard Page, Conservative MP for South West Hertfordshire, disagreed with Wyatt. He said that, given the £22.5bn the government raised via the 3G auction, it would be wrong to expect the telecoms industry to finance broadband rollout in areas where it isn't commercially viable. Government money, he suggested, should be used instead.

"The government are not prepared to ensure that everybody gets the broadband services that they deserve and that other EU countries are to provide," Page claimed.

A clause in the Communications Bill relating to third-party provision of civil telecommunications infrastructure could help broadband rollout in rural areas.

Martin O'Neill, Labour MP for Ochil, expressed doubts that Ofcom would be able to effectively regulate BT, given Oftel's performance on local loop unbundling, a process which has so far failed to create significant competition at the wholesale ADSL level.

"It has been suggested of late that the regulator has been captured by BT. Some have felt that, when we were talking about unbundling the local loop, Oftel's director general was unduly understanding of BT. Instead of going in with a bludgeon, he wanted to continue talking. As a result, we lost valuable time, and the unbundling process has never recovered," O'Neill said.

"We started seriously on the process too late in the day. By the time the process really got underway, the telecoms bubble had burst - fortunately, one might say. The director general took the view that it was better to negotiate than to act by diktat. I think that it is sometimes better to go in hard and quickly than to try to achieve something through protracted negotiation," O'Neill added.

David Edmonds, director general of Oftel, was recently appointed to the board of Ofcom and will continue to play an important role in its regulation of the telecoms industry.

Wrapping up the debate, e-minister Stephen Timms said he is confident the government's market-led approach to broadband will be successful, citing the mobile phone sector as evidence.

"Exactly the same concerns about the provision of [mobile phone] services in rural areas were raised. The competition between the service providers led to innovation in marketing and technology that drove the services into those areas," Timms said.

Timms also mentioned the government's decision, announced last month, to spend over £1bn on broadband for the public sector.

"It is also the case that public services in all parts of the country will demand broadband. My right Honourable Friend the Prime Minister made the commitment the week before last that, by 2006, every school in the country will have broadband. Once the school in an area has broadband, it is possible for the service to be provided to other users as well. However, we need new investment as well as competition," Timms explained.

Graeme Wearden writes for ZDNet UK.