Clause 151 - Directions with respect to the radio spectrum
Communications Bill
10:45 am
Mr Andrew Lansley (South Cambridgeshire, Conservative)
Of this group of amendments, Nos. 293, 294 and 305 stand in my name. In debating them, we anticipate to some extent the debate on recognised spectrum access, which we first encounter in clause 151, but this may be the right time.
Amendments Nos. 293 and 294 would remove from the directions that the Secretary of State can make reference to what will become section 3A of the Wireless Telegraphy Act 1998, which is about bidding for grant of recognised spectrum access. One would need subsequently to remove the relevant part of clause 156. The amendments would remove the references to recognised spectrum access and the potential for the Secretary of State to make directions in that respect. This is the first of a series of amendments, and we will deal with the views to which they relate in our consideration of subsequent clauses. One needs to disentangle and remove recognised spectrum access from subsequent clauses in order to accomplish the task effectively, which is what amendments Nos. 293 and 294 would do.
The Joint Committee considered recognised spectrum access only briefly, and many of my colleagues found it difficult to understand the nature of the Government's intentions. The Minister assures us that it is not the Government's intention simply to raise money. However, if that is so, it should be clear that the Government seek to achieve better spectrum management by granting recognised spectrum access. That should be apparent not only to the Government, but to the people who use spectrum and in whose interests the more efficient use of spectrum management lies. Most of those who would be affected by the granting of recognised spectrum access say that they see only difficulty and expense arising from it.
I shall not talk at great length about the issue, but it is difficult to build an incentive based on opportunity costs on to a system such as recognised spectrum access that is, in effect, voluntary. Those who want to comply with it will do so happily, because they secure some benefit. However, they may then be charged substantially more than the cost of providing that service. Those who do not see any benefit to them can simply walk away from it. The Government are therefore proposing only to deny them a service with which they were previously provided. We easily return to a situation in which it appears that the Government, by denying a service to people who currently have access to the spectrum, require those people to pay money to the Government to continue receiving a service at levels that are designed not designed simply to recover the costs involved in providing that service, but to reflect the opportunity costs of spectrum, which is not in the Government's gift to give.
The Trade and Industry Committee, of which I am a member, adopted the language of someone who gave evidence to us when it described that system as a protection racket. Where Government undertake the task of allocating spectrum that is in their gift to allocate, it is entirely reasonable that it does so on the basis of efficient use and opportunity costs through administrative pricing. To do so in relation to spectrum that it is not in their gift, however, is excessive. Amendments Nos. 293 and 294 are based on the proposition that the Government should simply give up recognised spectrum access, which many other amendments echo.
Amendment No. 305 applies if the Government believe that there is a continuing purpose for recognised spectrum access, if the material supplied to the Joint Committee and the Trade and Industry Committee seeks to offer illustrations of that in relation to those who receive Met Office data, and if it is conceivable that there are users of spectrum who are not required to have a licence but who receive benefits from the Radiocommunications Agency, or from Ofcom in due course. The amendment also applies if it is reasonable that those people should make some contribution and want to have a handle on the service that is being provided to them.
The amendment relates to schedule 17, which amends section 2 of the Wireless Telegraphy Act 1998 and provides that Ofcom can prescribe sums that are payable for grants of licences and recognised spectrum access. That would enable Ofcom
''to prescribe sums which would be greater than those that would be necessary for the purposes of recovering costs incurred by them in connection with functions under the enactments''.
That is the gateway to the incentive and opportunity cost pricing of the grant of a licence, or the grant of recognised spectrum access. The intention behind my amendment is that section 2(2) should be disapplied in respect of grants of recognised spectrum access. Hon. Members will see on page 489 of the amendment paper that the mechanism for that is a new subsection (2)(a), which disapplies subsection (2) in respect of the grant of recognised spectrum access.
Ofcom would still be able to prescribe sums greater than the costs incurred in respect of the grant of a
licence, so administrative incentive pricing would be unaffected in relation to the grant of licences. Ofcom could make a charge for recognised spectrum access, but only in relation to costs incurred. It would not, therefore, be possible for the whole rigmarole of incentive and opportunity cost pricing to be applied to recognised spectrum access.
In effect, the whole protection racket element would be removed. If someone wished to apply for recognised spectrum access that would be fine. If they wanted a service that Ofcom could provide, it would have the power to charge for the costs that it incurred. There would be no point in bidding, so amendment No. 292, which would remove bidding for grants of recognised spectrum access, would still apply and clause 154, which enables people to apply for recognised spectrum access, would still be in place. Amendments Nos. 293 and 305 are connected in that sense, and they are needed to achieve the objective of depriving the Government of their protection racket and enabling them, through Ofcom, to provide a service to those who want to purchase one.