Mr John Greenway (Ryedale, Conservative)

I beg to move amendment No.103, in

clause 89, page 84, line 24, after 'apparatus', insert 'in that market'.

Mr Peter Atkinson (Hexham, Conservative)

With this it will be convenient to discuss amendment No.104, in

clause 89, page 84, line 26, leave out from 'section' to end of line 29 and insert 'are—

(a) conditions requiring the dominant supplier to maintain such a separation for accounting purposes between matters relating to the supply of electronic communications apparatus in that apparatus market and the rest of the supplier's business as a whole as may be described in the conditions; and

(b) conditions imposing price controls in relation to the supply (whether by sale or hire) of telephones for hardwiring to an electronic communications network.'.

Mr John Greenway (Ryedale, Conservative)

You are right to say that clause 89 is narrow, Mr. Atkinson, but it is important and the Conservatives profoundly disagree with it. We discussed earlier Ofcom's regulation of the apparatus supply market, which is not required by the directive. It is unnecessary for Ofcom to regulate that market at all because the market is already competitive. We are not happy with the clause for those two reasons.

The Minister made a robust defence in the sense that there are still a number of people with apparatus that is hard wired. His point seemed to be that the whole purpose of the Government's approach was to protect those consumers, and if that was his argument, that is fine. The Government's intention may be to give Ofcom powers in respect of any supplier who has a significant market power position in the hard-wire apparatus market, but the clause goes beyond that. Amendments Nos. 103 and 104 endeavour to limit the powers to the hard-wire market only. That is why amendment No. 103 adds the words ''in that market'' to line 24—''that market'' is the hard-wire market.

Amendment No. 104 makes it clear that any conditions imposed by Ofcom should relate only to the hard-wire apparatus market part of a supplier's business. The clause should not be a Trojan horse that allows Ofcom to regulate the rest of the supplier's business. Allowing Ofcom to do that would be wholly disproportionate and, in any event, we have already concluded that the directive does not require it. It would be contrary to the entire philosophy of the directives taken as a package and to the principles of good regulation.

The Conservatives would prefer that the clause was not in the Bill, but I hope that the Minister is prepared

to say that he will think about whether the wording should be amended to make it absolutely clear that the provision is simply about ensuring proper regulation of the apparatus supply market as it relates only to the hard-wire market.

Mr John Robertson (Glasgow, Anniesland, Labour)

Will the hon. Gentleman tell me what hard-wire market he is talking about? Will he give me an example? I do not know of any hard-wire market.

Mr John Greenway (Ryedale, Conservative)

That is a good question and one that the Minister ought to answer—it is his Bill. The note on the clause states:

''Where OFCOM determine that a supplier of electronic communications apparatus has SMP in an apparatus market, OFCOM may set conditions requiring the supplier to maintain accounting separation between such activities and other matters and also may set price controls on the supply of telephones hardwired to an electronic communications network.''

The clause goes beyond that: the note on the clause and the wording of the clause are not the same.

Mr Andrew Lansley (South Cambridgeshire, Conservative)

I am following the argument very carefully and it seems to me that the question asked by hon. Member for Glasgow, Anniesland (John Robertson) has been answered. The hard-wire telephone market is the market in which BT rent hard-wired telephones—200,000 of them—to customers who have chosen not to take them out and replace them with telephones that are not hard wired.

Mr John Robertson (Glasgow, Anniesland, Labour)

That is not a market.

Mr Andrew Lansley (South Cambridgeshire, Conservative)

Well, we can discuss that. There is a continuing market if person A continues to have a contract with person B to provide a piece of equipment.

Mr John Greenway (Ryedale, Conservative)

I am grateful to my hon. Friend. As always, what he says adds considerably to the power of our argument.

I was about to conclude my remarks but, having given way, I shall summarise the position again. It is patently obvious to anyone who compares clause 89 with paragraph 216 on page 41 of the notes on clauses that the two do not match. If adopted, our amendments—or something similar—would at least restrict the clause to that which, according to the notes on clauses, is the Government's objective and intention.

We need to hear the Minister's explanation before we consider how to pursue the matter. However, given that the hon. Member for Glasgow, Anniesland does not think that there is a hard-wire market, we look forward to his support if we seek to divide the Committee on the amendment.

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

I understand that the argument that the clause might lead to the setting of disproportionate conditions might appear to have some merit. However, Ofcom is required by clause 3 to act in a manner that is proportionate as well as accountable and consistent, and to target cases in which action is necessary. What

Ofcom is allowed to do is tightly constrained by the general requirements of its operation.

I resist the amendment because I believe that if market power determinations call for certain conditions, Ofcom should be free to set those conditions. We should not constrain its ability to do so in the way that the amendments propose.

However, I can give the hon. Member for Ryedale some comfort. I am aware that he and his hon. Friends have tabled an amendment to clause 146, which sets out a large number of definitions on a rather similar theme. The amendment to clause 146 would somewhat narrow the definition of apparatus that is the subject of this clause. When we get to that debate, I may be able to say something that will give him some comfort about the points that he raised. Given that we will return to the topic under a later clause, I ask the hon. Gentleman to withdraw the amendment.

Mr John Greenway (Ryedale, Conservative)

On the basis of what the Minister has said, although we remain of the view that clause 89 should not be included in the Bill, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendments proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill:—

The Committee divided: Ayes 11, Noes 5.