Mr John Greenway (Ryedale, Conservative)

I will try to be brief, but the Minister will acknowledge that clause 78, and its juxtaposition with clauses 76 and 77, is very important. It gives the European Commission powers to overrule something that Ofcom intended to do in relation to the UK market. It will be worth while putting two or three observations and questions on the record, and teasing the Minister for some answers.

I understand that no other organisation has any similar power, allowing it to overrule Ofcom simply because it has determined that what Ofcom is proposing may create a barrier to the single market. That suggests that Ofcom proposals to regularise the market in the UK may lead to difficulties depending on the European Commission's view on the market for a particular telecommunications service throughout Europe as a whole. As far as I can see from clause 78—perhaps the Minister will confirm this—there is no right of appeal against the European Commission's decision. Would the Commission's decision be subject to judicial review?

If the Commission could overturn something that Ofcom was proposing for our domestic telecommunications market, I presume that it could do the same in another member state—indeed, one would like to think that that situation would be more likely. The Commission could determine that the proposals of another member state's Government or regulator were a barrier to the single market. That, of

course, would mean a barrier to British telecommunications and media companies pursuing their interests in that member state.

I hope that I have described that clearly enough, and I wonder whether the Government intend to monitor comparable arrangements in other member states. Over the years, we have all grown used to the general cry that, although in this country we play by the rules, other member states may be less forthcoming. We have to accept that article 7(4) of the framework directive makes it clear that the Commission should have that power, which I hope the Minister can confirm will be applied as rigorously in other EU countries as it is likely to be in Britain.

Mr Brian White (North East Milton Keynes, Labour)

I have expressed concern in the past about the regulators' club, which was set up as a result of the framework directive. Clause 79 contains rules about the way in which Ofcom relates to the European Commission. Ofcom will be part of the regulators' club, which may be a cosy arrangement or a properly functioning interaction between the regulators. What is the relationship between the regulators' club and the UK Government? How does the regulators' club relate to the European Commission, and is it involved in the determination of the information that is reported to the European Commission? What is the role of the meeting of the regulators? What is their jurisdiction?

If the answer to that question is none—as I hope it will be—my question is what arrangements are in place to make sure that an old boys' club in which information is quietly exchanged does not come into existence. There are a number of ways to deal with companies with significant market power. I am thinking of the way in which the German regulator has had a cosy relationship with Deutsche Telekom in the roll-out of broadband in order to promote broadband. That is contrary to the spirit of competition, which the European Union has been pushing. This country has a particular interaction with the Republic of Ireland, and clause 79 talks about definitions of the market. I wonder how Ofcom would relate to the European Union if the market were not only the UK but the UK and Ireland.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

We talked this morning about the extent to which the market with which the Bill deals is increasingly international. Although the market is global rather than simply European, the European markets are significant. We have common rules for regulating the European markets, and in that context it is right that the Commission should play its part in their regulation within the bounds set for it by the directives. As the hon. Member for Ryedale said, such regulation is mandated by article 7(4) of the framework directive.

In any case, where Ofcom intends to identify a particular market or make a market power determination, during the period given for representations under clause 76 the European Commission may inform Ofcom that it believes that the proposed market identified in the notice or Ofcom's proposed market determination may not be compatible with the single European market or with any Community obligations. In that case, Ofcom must not give effect to its proposals for a further two months. Ofcom must withdraw its proposal if, in accordance with the procedure in article 7(4), the Commission decides within that two-month period that the proposal must be withdrawn.

If we are to have a single international market, there inevitably needs to be the possibility of such an intervention taking place. Of course, as the hon. Gentleman rightly says, that should be a possibility in every member state and certainly not only in the UK. I can give him the assurance that he was looking for because there is a firm commitment, which was reaffirmed at the European Council meeting in Brussels only a week or so ago, that every member state is committed to implementing the new telecommunications framework before 25 July. He can be confident that if there are any problems in that process there will be a good deal of pressure and sanction. There is a genuine European Union-wide commitment to implementing the directives, including that particular element of them. There is no getting away from the requirement in article 7(4) of the framework directive, which is very clear.

The hon. Gentleman asked what appeal would be available if someone were injured by a decision of the European Commission in those circumstances. The only way would be for the UK Government to take legal proceedings under the treaty to the European Court of Justice. I think that that would be unusual, but that arrangement is formally in place.

My hon. Friend the Member for Milton Keynes, North-East asked about the arrangements for the regulators' club, as he described it. There is no jurisdiction for such an institution, and the position that he hopes will apply there will apply. I certainly hope that the national regulatory agencies will be in touch with each other, sharing experiences and keeping each other informed. He rightly drew attention to concerns about arrangements in some countries. I hope that having a common regulatory framework right across Europe—every country is going through the process that this Bill take us through—will mean that there is much more transparency about such arrangements and relationships than there has been in the past. This whole process is an important step in the right direction, addressing the rather uneven pattern seen in Europe in the past.

Question put and agreed to.

Clause 78 ordered to stand part of the Bill.

Clause 79 ordered to stand part of the Bill.