Mr Richard Allan (Sheffield, Hallam, Liberal Democrat)

This is an important clause and I want clarification from the Minister on a couple of points. The clause refers to the electronic communications code. That sounds innocuous, like the green cross code or the highway code, but the electronic communications code is much more exciting that that to many members of the general public because it is the thing that means that roads are dug up outside houses, or telephone masts are put in back gardens. People care passionately about that so it is worth airing some of the issues.

I understand that the clause and subsequent clauses change the way in which we confer powers on telecoms companies enabling them to have preferential access to land and allowing them to disrupt highways and make compulsory purchases of land in order to ensure that we have a proper telecommunications infrastructure. It is always difficult to strike a balance: we need a telecoms infrastructure, but people experience disruption when building occurs near them.

I understand that the clause changes the way in which the powers are conferred. Licences for providers of telecommunications services will no longer exist and powers will be conferred on specific projects such as putting in place a network or a system of conduits. The change is fundamental, and I want clarification from the Minister on key points.

To what extent does the Minister envisage the change leading to local and specific powers, rather than more general ones, being conferred? At present, a national mobile telecoms operator in the UK has powers under the telecommunications code, in effect, throughout the whole of the country. Do we expect people to come forward with localised plans, such as a proposed mobile phone network for Sheffield. Will Ofcom give powers under the new electronic communications code for a mobile network for Sheffield? Alternatively, would the powers cover Yorkshire, or England, or the United Kingdom?

The conduit systems introduced under the clause are new. Offering licences to people to dig up the roads of Sheffield once—to use that example again—in order to put in place telecoms conduits, rather than having many operators digging up roads separately, is a great idea, but only if subsequent applicants can be required to use the conduits. We will achieve nothing if specific powers are given to somebody to put a system of conduits in place but Ofcom, after giving the power once, does not have the power to refuse to allow other telecommunications companies to dig up roads and not use conduits. It must be able to say, ''No, we have given someone else specific advantages under the electronic communications code to put in place a system of conduits. You should use that system rather than start all over again.''

Mast sharing, which has been mentioned before, is also introduced under the clause. When we start a telecommunications infrastructure, there tends to be too little of it everywhere, so it makes sense to have a code that says that we want people to be able to roll out infrastructure. However, a point is reached at which infrastructure is in place and the public expect licensing authorities to tell companies to use existing infrastructure rather than put new infrastructure in place.

A decision to give someone specific, preferential powers over any other applicant in the planning system, which is what the code confers, would be justified in the public's eyes only where there is an overriding need to roll out infrastructure. Where the public see existing infrastructure, they will rightly question whether a new applicant should be given the exceptional powers to introduce infrastructure where, to their mind, it is already in place.

Mr Michael Fabricant (Lichfield, Conservative)

I was especially fascinated—indeed, I woke up—when the hon. Gentleman spoke about mast sharing. Channel Five found itself unable to put transmitter antennae on masts on sites that were operated by the BBC, now Crown Castle-operated, and by the Independent Broadcasting Authority, now NTL-operated. That meant that many people had difficulty in receiving Channel Five without an additional aerial. Does the hon. Gentleman feel that that situation would not have arisen if the provisions he wants had been in effect?

Mr Richard Allan (Sheffield, Hallam, Liberal Democrat)

The hon. Gentleman makes his own point. I am not familiar with the details of why agreements were not reached in that case. The distinction is really between whether anyone should have powers under the electronic communications code and whether additional powers should be conferred on them to introduce new infrastructure. It is not about whether commercial agreements can be reached between people who own sites and those who wish to introduce new infrastructure. Another set of questions is contained in that issue.

The legal status of codes of practice is another key issue. The mobile phone operators have been trying to overcome resistance to some of their current activities under the telecommunications code by conforming to a code of practice. They believe that their roll-out of infrastructure will be more acceptable to the public because they are considering some issues on an area-wide basis, including the possibility of sharing. As for people who dig up the roads, it is important to note that local authorities carrying out roadworks are worse offenders than telecoms operators. Telecoms operators often get the blame, but they are not the biggest offenders in terms of hours lost—they tend to get in and out fast and they try to conform to codes of practice.

If we are trying to deregulate, perhaps some of the compliance management, with a condition to allow preferential access to land to install infrastructure, should contain some recognition of where operators

have tried to do that properly and have adopted codes of practice. There should be some relationship between such good behaviour and the application of the electronic communications code. I hope that the Minister will elaborate on some of those points.

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

I agree with the hon. Gentleman that the electronic communications code is an important part of the Bill. I am grateful to him for giving me the opportunity to say something about it.

For the most part, the Bill will continue to apply the telecommunications code set out in schedule 2 to the Telecommunications Act 1984, but it will adapt that for the new converging electronic communications regulatory regime. Like the 1984 Act, the electronic communications code gives network operators the rights that are essential if they are to build and maintain networks in a cost effective and efficient way. That remains important because civil engineering—digging trenches, making good roads—often constitutes more than 60 per cent. of the cost of extending a network.

Without the ability to apply the code, the additional costs and delays would raise the hurdles so high that the investment needed, especially for broadband and for the new mobile networks that the hon. Gentleman referred to, might make the cost prohibitive. That is particularly the case, not so much in Sheffield but in the more remote parts of the country where the business case for market investment is often quite marginal.

Earlier on in the debate, perhaps on Second Reading, the hon. Member for Maldon and East Chelmsford, or one of his hon. Friends, mentioned that the Broadband Stakeholder Group, in its November report, called for changes to enable the provision of civil infrastructure by third parties as an important step in facilitating investment in broadband. That is an important part of the reason why we are making the change that the hon. Member for Sheffield, Hallam (Mr. Allan) talked about. The change is a deregulatory move to allow the code to be applied not only to companies operating electronic communications networks, as was the case in the past, but to those offering access to conduits or other infrastructure to network operators.

Ofcom will be able to apply the code to a person who is not operating an electronic communications network, but who is in a position to contribute to the provision of such networks by providing the basic infrastructure. I hope that that will lead to a lower cost of roll-out of new networks. The hon. Gentleman asked whether that change is likely to be local or national in its impact. I expect that it will more often be taken advantage of in specific local circumstances.

Let me give some examples of possible developments. Existing utilities companies—gas or water companies—might want to take advantage of work that they plan to carry out for their own purposes to make available conduits for telecommunications networks. Local authorities—this might prove especially significant—might provide managed services directly as part of their activities as local highways authorities for the

promotion of well-being, and might set in the ground infrastructure that can be taken advantage of by network providers in the area. There might be public-private partnerships, in which a local or regional authority procures a managed infrastructure service for the promotion of well-being using the power now available to them. Purely commercial businesses might choose to construct infrastructure that network operators can take advantage of.

The change seems to be relatively small, but its impact could, as the hon. Member for Sheffield, Hallam says, be quite big. It could remove some of the current barriers to establishing the new infrastructure that we all want. The provision could be operated nationally, but I should think that it would more frequently be used locally.

The hon. Gentleman asks whether we might compel people to use infrastructure provided in that way. I do not think that we can do that. If a network operator thinks that it is better to construct a whole new network of its own than to use facilities already in place, it needs to have that opportunity. However, there will be a huge cost incentive to take advantage of any existing infrastructure rather than build new infrastructure, with the expense and the time involved in doing so. It would not be appropriate to force people to use existing infrastructure, but I think that the hon. Gentleman accepts that there are big commercial cost benefits if the opportunity to do so arises. The provision could give rise to a large and beneficial change and bring in some of the new investment that we want.

Mr Michael Fabricant (Lichfield, Conservative)

I understand the Minister's point that Ofcom could not compel people to use facilities, but could it act as a facilitator if there were contractual difficulties, or if one party thought that another was being unreasonable? Again, I give the example of Channel Five, which felt that the BBC and independent broadcasters were being unreasonable in not permitting Channel Five to put little dipoles on top of existing masts. The reasons given were that wind loading would cause masts to collapse, even though most chartered engineers who considered the matter thought that an impossibility. Channel Five's theory was that it was in the interests of the BBC and independent broadcasters to try to limit the coverage area as much as possible. Does the Minister see an opportunity for Ofcom to intervene and, if not to compel—to use the Minister's word—at least to encourage joint sharing of conduits or antennae?

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

I think that Ofcom will want to encourage sharing in that way. If the hon. Gentleman takes a look at clause 103(4)(c) he will see a reference to Ofcom having to have regard to

''the need to encourage the sharing of the use of electronic communications apparatus''.

That statement is made in the context of whether to apply the electronics communications code in any particular case. However, the Bill states that Ofcom should play a role in encouraging sharing of that sort, and the hon. Gentleman might take encouragement from that.

Mr Michael Fabricant (Lichfield, Conservative)

I am encouraged, but would there be any sanction if, despite the encouragement, Ofcom were ignored?

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

No, I do not propose such a sanction, but such encouragement is important, and we expect Ofcom to take considerable interest in that. The new directives encourage that as well. It is clear to everyone that if there can be sharing of that sort, costs—the amount of investment that is needed to achieve the desired outcome—will be significantly lower. There is a public interest in encouraging sharing of that kind.

Mr Andrew Lansley (South Cambridgeshire, Conservative)

I am slightly confused. I thought that in the circumstances to which my hon. Friend the Member for Lichfield referred, access-related conditions might be applied to Crown Castle. It therefore appears that it is possible for conditions to be imposed—and, thereby, for sanctions to be applied.

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

I will need to reflect on that point. I think that the answer to the question of whether, under clauses 102 and 103, Ofcom could compel people to use particular facilities is no. I will have to give some thought to whether other parts of the Bill would apply if the issue with the BBC were to arise again.

Question put and agreed to.

Clause 102 ordered to stand part of the Bill.

Schedule 3 agreed to.

Clause 103 ordered to stand part of the Bill.