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House of Commons Hansard
Machine-to-Machine Communication
08 June 2011
Volume 529

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It is a pleasure and an honour to serve under your chairmanship, Mr Scott.

I believe I have the privilege of being the first Member to raise the matter of machine-to-machine communication in Parliament. Interestingly, the internet was first mentioned in the House in February 1990 by Emma Nicholson, a Conservative MP. At that time, only 3 million people worldwide had access to the internet, mainly academics and the military, three-quarters of them living in the United States. Twenty-one years later, there are an estimated 2 billion regular internet users, only 13% of whom live in the US and 44% of whom are Asian. Those figures will grow.

The internet has revolutionised our world. Machine-to-machine communication is the next stage in the internet revolution. Having connected people, we shall move on to connecting machines and things.

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The hon. Lady speaks of having connected people. May I remind her that 30% of people in this country do not have good access even to a 2 megabit connection? Currently, for only 90% of the time for 95% of people is there decent access to mobile communications. Without infrastructure investment in good fixed and mobile broadband, it will be very difficult to deliver the things that the hon. Lady so rightly mentions.

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I thank the hon. Gentleman for his intervention. He is absolutely right. He does well to remind us that although we shall be connecting machines, we have not yet connected everybody. Given the limits that have been set on mobile spectrum availability, he would not want to share it with trillions of devices, as I shall explain.

Machine-to-machine communications enable the internet of things. Ericsson estimates that by 2020, 50 billion things will be connected to the internet. Other analysts put the number of connected devices in the trillions. What will these devices be doing? Some will be doing what they already do; there will BlackBerrys and iPads, but we will also see, for example, lamp-posts with sensors that detect the level of light and save energy by turning themselves off. We will see smart fridges telling our chosen supermarket that more vegetables are needed. We will see water heaters monitoring the water temperature and deciding that it could be a little less hot for a few minutes because we are stuck in traffic and the national grid is overstretched. We may even see cholesterol monitors embedded in our bodies telling the doctor that it is time for another check-up.

As a self-confessed technophile, I see the internet of things helping to take the dull and the difficult out of our lives so that we can get on with what human beings do best—whatever that may be.

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I am grateful to my hon. Friend for giving way, and I commend her for raising this enormously important subject in Parliament for the first time. Does she agree that the development of machine-to-machine communication raises profound questions about security and privacy? Firm and effective standards on both will be needed if industry and the wider public are to embrace this revolution, which will clearly be of advantage.

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I thank my right hon. Friend. He is right that machine-to-machine communication raises a number of important questions about the way we live our lives, which I shall talk about later. We should be aware across Government of what the issues are, so that we give ourselves an advantage in addressing them.

The question today is whether the Government are doing all they can to ensure the UK economy will benefit from this trillion-pound market of the future? Why is spectrum not being made available, as it was recently in the US, so that UK companies can get on with innovating in this hugely important area and ensuring we reap all the rewards? I hope that the Minister will tell us how the Government aim to ensure that the UK benefits from machine-to-machine communication, because we are in danger of being left behind.

In some areas, the UK leads in machine-to-machine communication; it is otherwise known as M2M, which sounds rather like a pop group. Ofcom, my previous employer, has worked hard to ensure that spectrum is available for machine-to-machine communication. M2M can be divided into three broad areas: near field, home and personal, and wide area. I shall describe each in turn.

Near field means near or short-distance communications. Probably the best example is the Oyster card system. Every morning, at Westminster station, I see commuters holding various purses, wallets, gym cards and, occasionally, parts of their body up to the readers. There is no direct contact with the Oyster card. The reader operates it using radio frequency identification—RFID—over very short distances. Oyster saves us the time and trouble of carrying money, queuing and purchasing tickets for every journey. A few months ago, my local transport authority, Nexus, launched the north-east’s very own Oyster-type system called Pop. We will all be “Popping” about the north-east without having to wait at ticket machines.

We can increasingly expect to see RFID used in many other applications. Oyster has already been extended to support contactless payments for small purchases. In 2008, the St Louis-based Somark Innovations tested an RFID tattoo on cows to monitor stock movements, and RFID devices are being implanted in salmon, so that we can track how they are responding to changes in the environment.

Exciting innovations are possible in the area. In 2005, Ofcom deliberately chose to make spectrum in the 865-868 MHz range available for RFID applications on a licence-exempt basis. Licence exempt means that companies do not have to pay to use it, which means that small companies can think of exciting new ideas without having to pay out huge amounts to buy spectrum. That is why innovative businesses can try out new applications, and we can expect to see UK companies playing a big part in the RFID revolution. Therefore, when it comes to near-field communications, the UK is good to go.

The next area of machine-to-machine communication is home and personal, which is still over short distances, but more than a few millimetres. It enables personal area networks, which are networks around the human body, as well as home networking.

We all now think that it is a basic human right to be able to browse the internet from the garden thanks to wi-fi. There are other protocols that enable communications between devices in the home and in the office. For example, many of us use Bluetooth headsets, which wirelessly enable us to go hands free. There is also a protocol with the lovely name of ZigBee, which has been developed to enable wireless lamps. Increasingly, it might also be used by our fridge to tell our smart meter how much electricity it is using and whether it would be okay to turn the freezer off for a few milliseconds so that we do not have to bring on another gas power station every time “EastEnders” finishes.

ZigBee, wi-fi and Bluetooth all operate in licence-exempt spectrum. There are challenges in home and personal networking. In some cities, people are finding that the wi-fi is often congested. Interestingly, that is not because there are too many people uploading photos on Facebook. It is caused by people using wi-fi to transmit satellite or cable programming around their home, so that can be a disadvantage of licence-exempt spectrum. Some new application can come along and hoover up all the bandwidth. None the less, in general, we have a home environment with innovative applications competing to improve our lives.

Unfortunately that is not the case for wide area communication, which is everything from down the street to across the world. Mobile broadband, smart meters and the global positioning system are forms of wide area communication. Wide area applications are really where the huge innovative potential is. Smart cities need wide area machine-to-machine communication. I want to live in a world where the traffic lights on the Tyne bridge going into Newcastle can respond to traffic conditions on other bridges in the city so that we avoid gridlock. I would like to know exactly when the Number 10 bus will get to the bottom of Kenton lane.

It would be progress indeed if people with chronic illnesses could lead more independent lives because their condition was constantly monitored, and help was immediately on hand through telemedicine applications. I want a smart national electricity grid, where sensors in turbines on wind farms in the North sea calculate our energy production moment by moment and change the level of usage in homes across the country as a result. That is the obvious big win. Every form of energy production now has big costs and risks associated with it. We have the technical complexity, cost and unpredictability of wind and solar power; the emissions associated with coal and gas power stations and the potential dangers and long-term costs of nuclear power.

We need to ensure that we are using as little energy as possible. Machines use a hell of a lot of energy—whether in industrial processes, all the kettles switching on every time a soap ends, electric cars and transport or the giant server farms around the world that support cloud computing.

By using machine-to-machine communications to reduce the amount of energy being used, we reduce the number of power stations we have to build. To a certain extent, the Department of Energy and Climate Change is aware of that. It acknowledges the importance of smart meters and ultimately of smart energy grids.

My concern is that in this area, unlike in the others I have spoken of, we have no suitable licence-exempt spectrum and no well developed plans to bring it about. One reason for that is the very success of mobile telecommunications, which are everywhere—though not so strongly in the constituency of the hon. Member for Penrith and The Border (Rory Stewart). Everyone has a mobile phone; many people have two. Given that, why would we possibly want more wide area communication? Have we not got enough? The answer is no, and I hope that the Minister will be good enough to acknowledge the reason. In fact, I hope that he will acknowledge all my points, but on this one, I specifically expect a response.

The Minister is not a machine. He does not look like a machine. He does not carry out his duties like a machine and he certainly does not communicate like a machine. Why then should he think that machines communicate in the same way as he does? Machines do not get annoyed when there is a busy tone. They do not become upset by congestion, or infuriated by delay.

Putting billions of machines on to mobile networks designed for people is an incredible waste of valuable infrastructure. That is why we need spectrum, which allows machines to communicate with each other. We need some of that spectrum to be licence exempt so that we have innovation.

Will the Minister tell me what assessment he has made of the potential economic benefits of machine-to-machine communications? Does he agree that it is important that there should be licence-exempt spectrum to support them? Does he agree that we urgently need clarity from Ofcom about when spectrum will be made available?

The Minister may say that it is not for the Government or Ofcom to determine the use spectrum should be put to, but for the market. He has said that before in response to questions that I have tabled, but the market cannot determine the use spectrum should be put to if it is not made available.

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Given the enormous importance of these machine-to-machine communications, surely the hon. Lady agrees that we should not exclude large parts of the country and millions of people from accessing all the incredible benefits that she has listed. Surely, it is about not just making spectrum available to machines but making it available to people in those areas of the country, otherwise we will have real social exclusion.

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I thank the hon. Gentleman for that intervention. Once again I agree with him; access to the internet will be an important part of enabling humans to reap the benefits of M2M communications. He is absolutely right that discussion of M2M communications is part of a wider argument about ensuring that the benefits of technology are available to all our citizens.

The Minister may claim that Ofcom should not intervene to support particular technologies but, as I have already suggested, I argue that M2M communication is not one technology but a huge market—in fact, it is a range of markets—and that the purchase of spectrum is a huge barrier to entry by small innovative firms. The Minister may also say that he does not have a stream of people coming to see him to ask for this spectrum, but the small innovative firms that I talk to do not have that kind of access to Departments.

Personal and near-field communications have licence-exempt spectrum in which to innovate, so why is there none for wide range applications? I yield to no one—not even the Minister—in my praise of Ofcom. Under the Communications Act 2002, Ofcom is required to encourage investment and innovation, and specifically to use spectrum for that purpose, so I would like the Minister to tell us and Ofcom about the importance that he places on that requirement to encourage innovation, especially given the cross-party consensus that innovation will help to secure the recovery. Will the requirement to encourage innovation be retained and indeed strengthened in the new communications Bill, which is currently being drafted?

I am sure that the Minister shares my view that M2M communication is a very important area and I look forward to hearing how he will encourage the innovation and the economic benefits that it will bring.

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I am grateful to you, Mr Scott, for giving me the opportunity to speak. This is the first time that I have served under your chairmanship, and it is a great and significant honour to do so.

I am grateful to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) for securing this debate. She knows, from remarks that I have made about her before in the House, that I am not surprised that she is the first MP to raise this important issue. She has referred to the last innovative MP, Emma Nicholson, who raised the issue of the internet for the first time in Parliament. I only hope that the career of the hon. Member for Newcastle upon Tyne Central does not follow that of Ms Nicholson and that she does not end up as a member of the Liberal Democrat party. I say that with all due respect to the coalition, of which I am a full and supportive member.

The hon. Member for Newcastle upon Tyne Central is an expert in the House on this issue—she had a distinguished career in Ofcom. I mean it as a compliment when I say that this debate has perhaps been more like a seminar than the type of rambunctious debate that we are used to in this Chamber.

The hon. Lady has discussed machine-to-machine communications, or M2M. As she has rightly said, M2M sounds almost like a pop band, perhaps one that was competing in the Eurovision song contest. We also talk about M2M as “the internet of things”. It is an incredibly important subject and in some ways it is the “new new thing”, if I can put it that way, of the internet. It is something that people are now starting to talk about. As she elaborated on in her excellent speech, the possibilities of the internet of things are almost limitless, and they will transform how we live our lives. However, as both the right hon. Member for Oxford East (Mr Smith) and my hon. Friend the Member for Penrith and The Border (Rory Stewart) have rightly said, the internet of things will also bring complex social issues that will attract the interest of politicians, notably privacy issues but also other important issues such as social exclusion.

Today the hon. Lady has shown that she has another string to her bow. She managed to secure this debate, and we know how difficult it is to secure a debate in Westminster Hall, let alone a particular timing for a debate. However, she has secured this debate on M2M on IPV6 world day. For those MPs who do not know what IPV6 is, it is internet protocol version 6. Effectively, sitting behind the internet addresses that we all use is a string of digits, like a telephone number. At the moment, we use internet protocol version 4, or IPV4, and we are about to run out of IPV4 addresses. I do not want anyone to panic about that for a moment, but this autumn the wholesale sale of internet addresses in Europe will come to an end and in the next two years we will experience a shortage. Consequently we need to move to IPV6, which is a longer string of digits.

I held a seminar this morning with key figures in the UK who are involved in this transformation to IPV6. One of them described the transformation to me in a very clear way, by saying that moving from IPV4 to IPV6 in terms of increased capacity is like moving from a golf ball to the sun. We might not need all the capacity that the sun would bring, but we will certainly need significantly greater capacity. Given that IPV4 only has 4.3 billion internet addresses, the increase in capacity in the future will be driven by the internet of things. As the hon. Lady has pointed out, that will include things such as smart homes, smart meters and connected cars. For example, I learned today something that is pretty obvious once you are told it, namely that every new car that is sold has its own internet address, to allow it to communicate with computers. There will also be e-health, smart cities and many other variations of things.

As the hon. Lady indicated, a number of companies have made predictions about the number of internet addresses that we are going to need. Ericsson has said that we will need 50 billion internet addresses by 2020 to cope with the internet of things. Some people talk about trillions of devices or connections. The debate is very fast-moving, and nobody can be certain what will happen. To be frank, predictions are fairly pointless, except to say that we will need a lot more internet addresses.

I want to use the opportunity that this debate provides briefly to speak out to those watching, particularly companies and businesses, and ask them to start preparing their websites and information systems for IPV6. Although that change is not an immediate issue for them, they will need to be on top of it in the next few years. In fact, the slogan that I came up with this morning, which I thought was rather neat, was, “Don’t panic, but do start to prepare”.

The hon. Lady has asked me whether I have estimated the economic value of the internet of things. I have not done so, and as far as I am aware Ofcom has not done so either. However, as one might imagine, various estimates are knocking about. Some people have estimated that the value of the internet of things is about €200 billion a year. Again, however, I say with some caution—given that we are, as it were, in the “known unknown” territory—that it is impossible to put a realistic value on the internet of things. As she has indicated, however, virtually any device that business or consumers use will be internet-enabled in the coming years. For example, the most immediate example that right hon. and hon. Members will probably be aware of is the idea of smart metering, which the hon. Lady has discussed at length. Other examples include radio frequency identification, which relates to the near-field issues that she has discussed.

The thrust of the hon. Lady’s speech was about whether or not we should make spectrum available, particularly for entrepreneurs to take advantage of the growing internet of things. My hon. Friend the Member for Penrith and The Border has rightly reminded us of the need to set in place proper infrastructure for the internet of people. Both the hon. Lady and my hon. Friend will be fully aware of the Government’s plans to support broadband roll-out and that we have set aside about £500 million for that programme. Our objective is to bring superfast broadband to 90% of homes and businesses, and a minimum of 2 megabits per second broadband to all other premises, by the end of 2015. My hon. Friend is also making firm representations about the forthcoming spectrum auction and the need to increase coverage in that respect. As the hon. Lady has indicated, wireless will also be an important part of M2M communications, and, as she knows, we are well on track to get that spectrum auction up and running at the beginning of next year.

As the hon. Lady has said, spectrum is absolutely vital for the future of the internet of things, and it is incredibly important that we make as much spectrum available as possible. As I am sure that she knows, we have committed to releasing a significant amount of public spectrum to the private sector. In March, just after the Budget, we published our detailed plans to release 500 MHz of public sector spectrum below 5 GHz by 2020. That will be a complex task, bringing together a number of Departments. We must also ensure that the spectrum that we make available is internationally compatible and that we make it available with the minimum of disruption to the public sector, be it transport, security or defence.

As the hon. Lady has predicted, although I believe that much of this spectrum will be suitable for M2M communications, it is not for me, nor indeed, in my view, for Ofcom, to decide how best to use both the spectrum and the infrastructure available to meet the demands for communications. That is for the market to decide. She is right to point out that the United States is making advances in this area, but I think that we are keeping pace.

The hon. Lady is well aware of the duties of Ofcom and of its light-touch approach to regulation, and those duties include encouraging investment and innovation in relevant markets. In addition, the European Union’s radio spectrum policy programme, which we debated at the Telecoms Council last week and which is currently generally under discussion, also includes the principle of promoting innovation in telecoms. Ofcom is the independent regulator charged with managing spectrum in the UK, using licences when users want rights and unlicensed spectrum when rights are not needed. The use of wi-fi is a very good example of successful unlicensed spectrum use.

The hon. Lady made it very clear in her speech that Ofcom has made spectrum available for M2M use, such as that which allows intelligent transport systems to operate without licence in a European harmonised band, aiding the development of those systems. Ofcom is also considering whether the 872-+876 MHz spectrum paired with the 917-921 MHz one might be suitable for M2M communications, and it is working with the European Commission and European regulators to see whether such services could operate without interference to adjacent bands. We also have, of course, the so-called white space spectrum, which might be suitable for machine-to-machine communication.

Ofcom frequently consults on spectrum matters. I absolutely take the hon. Lady’s point that a lot of the small entrepreneurial businesses that could make use of this spectrum are not necessarily in a position to lobby Ofcom, but I assure her that there are many organisations out there that bring their thoughts about spectrum availability and how it can be used to the table. I hope that this debate will also highlight the fact that this is a very live issue and that it is perfectly possible to contact me or the hon. Lady, or indeed Ofcom, to make points. In my experience as a Minister, small and entrepreneurial businesses are often the ones that come forward with radical and interesting thoughts, so I encourage businesses engaged in this issue to make their views known not only to me but to Ofcom.

It is absolutely right that we should be ahead of the curve, aware of what is coming and looking beyond the horizon regarding how this spectrum could be used, but as well as first-mover advantage there is potentially first-mover disadvantage with spectrum. We, as the United Kingdom, have to align ourselves with our European partners, and being the first to make a band available for unlicensed spectrum use could end up being costly, if decisions are then made to harmonise different bands. I do not want to give the hon. Lady the impression that we are complacent; we are absolutely not—this is a very live issue. I do not, however, want to be in the position of rushing forward with decisions that we later regret. Our planned release in 2020 of the 500 MHz is a very good example of that, because we are pushing ahead our plans but are very conscious of the fact that we have to keep in step with our European partners, while at the same time pushing European member states to move on spectrum decisions.

I am confident that Ofcom’s approach to innovation and to spectrum management will continue to take account of its duties and will be both proportional and appropriate. It is important to recognise that machine-to-machine—

Sitting adjourned without Question put (Standing Order No. 10(11)).