Clause 147 - General functions of OFCOM in relation to radio spectrum
Communications Bill
9:45 am
Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)
We have set out a changeover plan—available on the web—that addresses all the issues that must be resolved in order to achieve a successful switchover. The hon. Member for Maldon and East Chelmsford referred to second sets and video recorders—those must be addressed. We must also address the points that my hon. Friend the Member for Rhondda (Mr. Bryant) made about availability. One of the criteria set out by my right hon. Friend the Member for Islington, South and Finsbury in 1999 was that everybody who can currently get the main public service broadcasting channels in analogue form must be able to receive those on digital systems. It is essential that questions about access are resolved successfully by all those who are working on the switchover, including the industry, the regulator and the Government. I am confident that we will be able to do that successfully.
The hon. Member for Sheffield, Hallam asked me to comment on the valuation of the spectrum. Undoubtedly, the figure assigned by the market would be lower now than it would have been some years ago, but I do not want to give a figure at the moment. The valuation will continue to vary. However, the issue is significant for making decisions on how digital spectrum will be allocated across the country in order to enable the switchover to take place.
There are some quite difficult questions and cost-benefit issues relating to how digital spectrum will be allocated to facilitate digital television. There are more expensive options that would free up more spectrum, and less expensive options that would free up less spectrum. A cost-benefit view will need to be taken on the valuation of the freed-up spectrum, so that a decision can be taken on how much investment is warranted if that spectrum is to be released. Those issues are being considered.
We are not driven by revenue-raising ambitions; I give hon. Members that reassurance. At no point in the Bill have we introduced measures simply because we think that there is an opportunity to raise extra money. That is not the concern driving the clause, or any other part of the Bill. My hon. Friend the Member for Milton Keynes, North-East wondered whether the arrangements set out for the relationship with the Treasury will be a problem. I do not think so; the arrangement included under subsection (7) is entirely conventional, and I do not think that Ofcom will have difficulty working successfully under it.
My hon. Friend and others asked about the grant-making powers under the clause. Those mirror existing powers under section 5 of the Wireless Telegraphy Act 1998. It takes time to move assignments by regulation because of the need to consult and give due notice, and grants can accelerate that process by smoothing the way for incumbents in part of the spectrum to move voluntarily. Such grants are subject to value-for-money and additionality tests. Also, they require Treasury consent under section 5, and must comply with state aid rules, so there are constraints on what can be done.
Those are the reasons why the powers exist. They have existed since 1998, but no grants have yet been paid, although some cases are under consideration. The Radiocommunications Agency announced at the end of November that the Treasury had approved £2.5 million for grants to support research into improving radio spectrum efficiency in the coming financial year. The possibility of grant-making is also under consideration in the context of accelerating the reformatting of the spectrum for fixed wireless access, although the agency has not yet make a commitment to that.
Finally, I shall respond to the points raised by the hon. Member for South Cambridgeshire. I shall say more on spectrum and the accounting arrangements that he asked about when we reach clause 386, but I give the hon. Gentleman and the Committee the assurance that an arrangement will be put in place that broadly translates the existing arrangements, which he rightly identifies as being different in respect of the
Secretary of State and Ofcom. The Treasury and Ofcom are currently discussing the precise handling of those arrangements, but I can assure the hon. Gentleman that spectrum management functions will be adequately funded—as they are now.
Question put and agreed to.
Clause 147 ordered to stand part of the Bill.