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Broadband Providers

Volume 489: debated on Thursday 19 March 2009

4. If he will discuss with Ofcom measures to increase the number of providers of broadband to the wholesale telecommunications market. (264473)

Wholesale broadband is closely regulated, and the market is regularly reviewed by Ofcom. That ensures that the UK broadband market remains competitive at the retail level. I can tell the House that there are more than 400 suppliers of broadband services.

I note the Minister’s reference to retail. Given that people up and down the land are facing great and real financial hardship, is it not time that the broadband telecoms market was opened up to true competition—not fake competition—so that the current pretty poor service levels can be driven up and customer prices can be driven down?

The hon. Gentleman may know that a number of companies offer wholesale broadband products and a series of other companies that are in a position to do so are choosing not to do so for commercial reasons. That is one of the reasons why we have made sure that the industry is closely regulated. In those parts of the country where there is considerable competition some of the price controls that have been in place have been relaxed. In other areas, where competition is not as strong as we might like, we have kept that regulation in place. He will know from the work of Lord Carter that this issue is being closely examined in government, with industry and with a range of other players. An interim report has been published and further work is in hand. The hon. Gentleman will be able to judge, with the rest of the House, the fruits of that further work towards the summer.

Surely my hon. Friend will agree that the problem is not the number of competitors in the market, but the uptake. Surely we should be examining what is happening in cities such as Glasgow, which has the lowest uptake of broadband in the country, rather than the number of people who are in the market.

With respect to my hon. Friend, I think we need to look at both issues: the level of competition in the market; and how we can ensure universal access to broadband services and speed up broadband access. He raises an important point, which deals with one of the issues reflected on in the interim report that was recently published by Lord Carter. The issue is part of the further work that is being done, and my hon. Friend, along with other Members of the House, will be able to judge our progress in that work towards the summer.

Does the Minister agree that whether in telecommunications or, indeed, the banking world, the best form of regulation is open competition?

With due respect to the hon. Gentleman, I think that competition is a good thing but that, as he knows, or ought to know, only too well as a result of the economic difficulties that our country faces, there is, on occasion, a strong role for regulation to play too. On the particular issue that we are discussing, I should say that where there is real competition, we have been able to relax price controls, but where there is not strong competition, we have kept those controls in place.

In his discussions with Ofcom and the providers, will the Minister ensure that the needs of businesses working in rural areas are met? High-quality broadband is essential in rural areas and sparsely populated areas, because people need to compete on a level playing field.

I accept that there is an issue about ensuring broadband access in rural areas, as in the rest of the country. As I have said, the question of universal access is one on which the Government are very much focused in discussions with Ofcom, the industry and other stakeholders. An interim report was published by Lord Carter, further work is under way and the House will be able to judge our progress in that sense towards the summer.