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Communications: Digital Britain

Volume 707: debated on Thursday 29 January 2009


My Lords, with the leave of the House, I will now repeat a Statement made in another place by my right honourable friend the Secretary of State for Culture, Media and Sport. The Statement is as follows.

“Last October, the Secretary of State for Business, Enterprise and Regulatory Reform and the Secretary of State for Culture, Media and Sport announced that I would undertake a comprehensive review of Britain's digital, communication and creative sectors and make recommendations to place the country in a position to prosper in the digital age.

Today, the Government are publishing the interim findings. The interim report starts from the recognition that these sectors are both important in their own right—worth more than £52 billion a year, with 2 million to 3 million people directly employed—but fundamental to the way all businesses operate and how we all increasingly live our lives. Capable communications systems can help all British businesses become more efficient and productive, offering the potential to reduce travel. High-quality information and entertainment enhance our democracy, improve our quality of life and define our culture. In short, building a digital Britain is about securing a competitive, low-carbon, productive and creative economy in the next five to 10 years.

It is worth reminding the House of Britain's traditional strength in these industries. The world wide web was invented by British ingenuity. It was here that GSM was created and established as the global standard for first-generation digital mobile communications. But this strength is not just in our distribution and communications systems. Our television, music, film, games, advertising and software industries are world-leading. As Digital Britain points out, the OECD estimates that the UK cultural and creative sector, at just under 6 per cent of GDP, is relatively more important then its equivalent in the US, Canada, France and Australia; UNESCO considers the UK to be the world's biggest exporter of cultural goods, surpassing even the United States.

However, we cannot be complacent. The online age is rewriting the rules, changing the way all of us access content and the old business models that have underpinned Britain's creative industries. The challenge now is this: how to build the networks and infrastructure that help businesses and consumers get the most from the digital age; and funding the quality content that enhances our culture and our economy.

The Government’s thinking in these areas has been shaped by a series of important reviews, including: the Caio review, on next-generation broadband access; the work of the digital radio working group; the Byron review, on children and new technology, which led to the establishment of the UK Council for Child Internet Safety; the convergence think tank; the digital inclusion action plan; and the Creative Britain strategy.

Digital Britain brings these strands of work together into a clear and comprehensive framework with five public policy ambitions at its heart: first, to upgrade and modernise our digital networks—wired, wireless and broadcast—secondly, to secure a dynamic investment climate for British digital content, applications and services; thirdly, to secure a wide range of high-quality UK-made public service content for UK citizens and consumers, underpinning a healthy democracy; fourthly, to ensure fair access for all and the ability for everyone to take part in the communications revolution; and fifthly, to develop the infrastructure, skills and take-up to enable widespread online delivery of public services.

The interim report makes 22 recommendations to achieve these objectives, and I will set some out for the House today. Britain must always be ready to benefit from the latest advances in technology, so we will establish a group to assess measures to underpin existing market-led investment plans for next-generation access networks. An umbrella body will also be set up to provide technical advice and support to local and community networks. To facilitate the move to next-generation mobile services, we are specifying a wireless radio spectrum modernisation programme. In addition, the Government are committing to enabling digital audio broadcasting to be a primary distribution network for radio in the UK and will create a digital migration plan for radio. We will consider how the digital TV switchover help scheme can contribute towards this agenda.

We will maintain our creative strength only if we find new ways of paying for and sustaining creative content in the online age. We will therefore explore the potential for a new rights agency to be established and, following consultation on how to tackle unlawful file-sharing, we propose to legislate to require internet service providers to notify alleged significant infringers that their conduct is unlawful.

Our third objective, high-quality UK-made public service content, will be achieved by sustaining public service broadcasting provision from the BBC and beyond. The report identifies news at local, regional and national level, and children's programming as among the key priorities.

The BBC as an enabling force is central to this: strong and secure in its own future, working in partnership with others to deliver these objectives. We will also explore how we can establish a sustainable public service organisation which offers scale and reach alongside the BBC, building on the strength of Channel 4. We will consider options to ensure plurality of provision of news in the regions and nations, and we are asking the Office of Fair Trading, together with Ofcom, to look at the local and regional media sector in the context of the media merger regime. We will also consider the evolving relationship between independent producers and commissioners to ensure we have the appropriate rights-holding arrangements for a multi-platform future.

Our fourth objective of fairness and access is, of course, crucial to delivering the Government's policy of an inclusive society where new opportunities are available to all and nobody is left behind. So we are developing plans to move towards a universal service commitment for broadband and digital services to include options up to 2 megabits per second, building on the approach to postal services and telephones in centuries past. We will also ensure that public services online are designed for ease of use by the widest range of citizens.

Lastly, to help people navigate this vast and often changing world, the report makes recommendations to improve media literacy and, in particular, to give parents the information and tools necessary to protect children from harmful or inappropriate content.

The Government have today set out a vision to make sure that Britain reaps the full economic and social benefits of the digital age. An intensive period of discussions with industry partners and others must now begin to turn these initial conclusions into firm solutions. A final report will be presented to Parliament by the summer.

In publishing this interim report today, and making this Statement to the House, we seek to invite Members from all sides of the House to engage in the debate around these fundamental questions that will shape our country's economy and society in this century”.

I commend the Statement to the House.

My Lords, I thank the Minister for repeating the Statement and for the advance notice of both the Statement and his report. However, I am sorry to say that it was something of an anti-climax. The report will be greatly disappointing for anyone looking for concrete action from the Government to equip Britain for the digital economy.

We all recognise the huge value of the digital and communications sector to the United Kingdom. It is vital for our long-term prosperity that we develop a world-class, highly competitive and universally accessible digital sector. Indeed, given the Government’s deepening recession, I should have thought that it would become a priority to look at that sector, which has huge potential for growth in productivity.

Britain has great natural strengths in creating digital content, but we do less well on the delivery of that content. We have fallen down the league table of digital adoption skills. Indeed, 40 per cent of households have no broadband at all, with connections even falling last year. Yet the interim report published today conveys no sense of urgency. There are no concrete pledges and only eight new reviews. Does the Minister not recognise that the digital, communication and creative sectors of our economy, and indeed far beyond, will have been waiting to hear what steps the Government will take to help usher in a fully digital age, and that the promise we have received of more reviews is hardly inspiring? Is there any chance that the full report, which is promised for the summer, might be more positive?

The overall impression given by the interim report is that this Government are treading water. We have already had numerous reviews on these issues: from the Cox review of creativity in business, in March to December 2005, to the Caio review and report, The Next Phase of Broadband UK, in February to September 2008, and the ongoing Broadband Stakeholder Group, among others.

I hope that the Minister can answer questions on matters which the interim report did not make clear. The report says that the Government will,

“work with … operators … to remove barriers to the development of a … wholesale market in access to ducts”.

If BT, which owns the ducts, does not co-operate, will the Government force it to open them to other suppliers, as we Conservatives have pledged?

On copyright protection, instead of a solution, the Government propose to set up a new quango with a new tax on internet users. Why do we need another agency when Ofcom is already equipped and able to do that job? And why should legitimate internet users have to pay for the copyright infringement of transgressors?

On the universal service obligation for broadband, we welcome the long delayed commitment to ensuring that everyone has access, but who will pay for this? The aspiration is a fine one, but we really need to know what the Government’s strategy is. The Government say that the commitment should be for 2-megabit access. Given that the national average access speed is 3.6 megabits, is not the scale of the Government’s ambitions pitifully low, saying simply that they want to ensure that the whole population has access to half the current average speed by 2012? It is one thing to promise universal access to broadband, but if it is too slow to be useful, especially in rural areas, the exercise is entirely pointless.

On peer-to-peer file sharing, the Government talk about consulting on legislation, but can the Minister tell me how ISPs are supposed to identify illegally shared files, given what happened in France, where many users simply reacted by encrypting their files when the French Government introduced similar measures?

These are just some of the questions that must be answered, so I am dismayed that all that we have been offered is the promise of more reviews. A Conservative Government will make it a major priority to ensure that over half the population has access to high-speed broadband within five years, providing a platform for thousands of new businesses and jobs. Does the Minister agree that this should be an objective that they will deliver? The country should not have to wait for a general election for this to start; the Government need to take action now.

My Lords, I join the noble Lord, Lord Luke, in thanking the Minister for repeating the Statement. In a sense, it was almost not a repetition of the Statement, as it is his own Statement in many ways.

I very much welcome the Government’s new focus on the digital economy and the creative industries. It is perhaps because of the rather reduced state of our financial services industries that we are now constantly reminded, not least at the Golden Globe awards, of the importance to Britain of those industries. I welcome the review’s emphasis not only on the economics of the creative industries and digital Britain, which are important, but on the very important matter of fairness. Access is vital, and inclusion is a key objective. In all this, inclusion is one of the big challenges that we face. The problem with the review, which is much more interim than many of us expected, is that its conclusions are rather thin on the ground and it gives rise to more questions than it answered.

My comments today from these Benches are rather more about the plumbing than the poetry of the report, to echo a phrase used by the Minister. For a start, we are very pleased with the affirmation of support for the BBC. We are also pleased with the statement that there must be a plurality of provision in public service broadcasting. The BBC should definitely not be the sole provider of PSB, and there is a clear recognition that the economic models of public service broadcasting are changing.

Our own preference on these Benches is for partnership between the BBC and other public service broadcasters, not for top slicing. We are also completely of the view that a merger between Channel 4 and Five is not a viable option. We are rather baffled by the fact that there is no statement in the report either about top slicing or about the inadvisability of any kind of merger option. We favour some kind of co-operation between Channel 4 and BBC Worldwide, but there is very little detail in the report on that, despite the fact that Ofcom reported only very recently on precisely those aspects. This lack of conclusion about PSB is very disappointing.

There is recognition in the report that content perhaps needs support. Indeed, support is vital in the context of particular parts of the creative industries where there is market failure of some kind and the British product is disadvantaged. We are thinking particularly about children’s television and computer games. I very much hope that the Minister can assure us that he is in deep discussion with the Treasury on these issues, because tax incentives for these content-driven industries are absolutely vital.

We also welcome some of the statements made about the migration to DAB universally, but there is very little detail in the report on the Government’s aspiration for the switchover date.

I must admit that, despite being a lawyer, I am rather confused by some of the interim review’s statements about copyright. There is a statement that internet service providers will be obliged to notify individuals that their conduct is unlawful, but what happens after that? Who will be responsible for prosecution? A new rights agency is proposed, but I cannot for the life of me see why the Intellectual Property Office should not carry out those duties. Mr Lammy has stated previously that the UK will not legislate on piracy, so I find the whole set of statements in the review extremely confusing.

Universal access to broadband is absolutely crucial. There is a lack of ambition, however. As has been mentioned, the average speed currently experienced by broadband users is something like 3.6 megabits per second, so why are we not aiming for the universal provision of super-fast broadband instead of broadband at 2 megabits per second?

Briefly, I also welcome some of the elements of section 5.1, on education and skills in the broadband area. I welcome some of the current projects, such as Find Your Talent, which is a very welcome initiative that recognises that times are changing and that we must inspire young people to find their own way to a creative future. There is a difficulty, however. We know that there has to be personalisation and participation and that parents need to get involved, but in addition to worthwhile projects there must be an overall strategy that includes equipping teachers with the right approach and skills. We also need to encourage partnerships with cultural institutions and the creative industries. How much cross-government co-operation is taking place between the DCMS and the DCFS?

Decisions were promised at this stage. It is disappointing that there is so little detail on PSB. We are in danger of getting behind the curve. The competitive situation with other countries has been mentioned. We must speed up our decision-making. I hope that the Minister can reassure us in that respect that the final report really will be definitive.

My Lords, I thank both noble Lords for their responses to the Statement. If we are trading disappointments, I am rather disappointed by their respective disappointments. The report clearly says that it is an interim report. We have been clear from the beginning that this process would come in two stages because we were seeking to resolve some significant questions. I can but imagine what the response from the two noble Lords would have been had we brought determinative answers on every single one of these issues without any form of proper analysis, consideration or consultation.

As both noble Lords have identified, these are profound questions about connectivity, infrastructure, content, rights and legality. We have been working on this project for 11 weeks. I struggle with the notion that we are being slow.

The noble Lord, Lord Luke, asked specific questions on where we have offered certainties. We have offered real certainties on at least eight of the 22 areas. We have said determinatively that we will commit to digital audio broadcasting and radio. We have said determinatively that we will commit to the funding and creation of a second public service provider alongside the BBC. We have said that we will commit to the creation of a universal service commitment in broadband for the first time.

On the point about speed raised by both the noble Lords, Lord Luke and Lord Clement-Jones, “up to 2 Mb/s” is the phraseology in the document. That would be the most ambitious universal service commitment of any country in the world. However, to be clear in the interests of the debate, we are in no way, shape or form suggesting that “up to 2 Mb/s” should be the ambition for what the country should have; far from it. We are saying that, in 2009, it is time for us as a country to consider removing the universal service commitment that is currently only for telephony and replacing it with a universal service commitment for connectivity.

I would be the first to say that that is a bold step. I have been working in this industry for 10 years. Only eight and half years ago, we sold the first ever broadband connection in this country. Only four years ago we introduced the framework to give us the most competitive market in the world. To introduce the suggestion of a universal service commitment today is a significant step, and one that will be welcomed by industry and users alike.

The next-generation access question, raised by the noble Lord, Lord Luke, is a significant infrastructure question for the United Kingdom. We make a clear case in the document that there is good evidence that the market will provide significant investment for up to 60 per cent of the country, and perhaps more. Of the remaining 30 per cent, however, there will probably be a question of the case for public incentives. We make it clear that we will do the work on that and bring back our answers before the summer.

On rights and content, I absolutely share the view of the noble Lord, Lord Clement-Jones, that the creative and content industries are a powerhouse sector in the British economy and one of which we should be rightly proud. We must find a way to find a platform for those industries to continue to innovate, be the envy of the world and thrive in the new world which we describe in the report, while giving them a legal framework.

To describe the rights agency as a quango is both inaccurate and unhelpful. It is, as suggested, a co-regulatory industry grouping. We have four examples of that already in the communications sector, which work extremely effectively. We have, in the mobile telephone sector, ICSTIS, now PhonepayPlus, paid for by a small levy: 0.34 per cent of revenue of any participating company. It provides a safe framework for the development of the mobile telephony industry, giving it freedom to adapt with the changing circumstances of technology. In the advertising industry we have the BACC, a clearance and screening group, again paid for by a small, level levy, to provide a point of gathering for the industry to share technology standards and applications that could help resolve the content and peer-to-peer filesharing questions.

The legislative backdrop on infringement is necessary. We have listened long and hard to the content industries and believe that we have struck the right balance between providing a legislative backdrop while at the same time not trying to put in place in legislation what might be unworkable firm solutions.

On the BBC, we are clear in the report that the BBC will be a mainstay of any future market. We are equally clear that it needs to continue to accelerate its approach to partnerships and engagement with the rest of the industry. However, we are, I hope, also clear that we wish to create a second large-scale public service provider. Indeed, there has been much discussion in the broadcasting industry, and two significant reports of substance from Ofcom, the latest only received last week, on this question.

We have made a clear statement in the report that we accept those recommendations, that we commit to the creation of a second large-scale provider, and that, between now and the summer, we wish to do the work, the due diligence, on how to construct that and create an organisation that is sustainable as well as conceptually desirable. That is a significant task of work. It is not an easy thing to do and must be done with due care and attention, not least because we are talking about the value for money questions of public assets. We will do that work, and I am confident that, when we have done so, we will end up with a recommendation that we can bring to this House and the other place to give us two large-scale UK content businesses of which we can all be proud.

My Lords, I have two quick questions. First, will the Minister confirm or deny the report in the Times this morning that:

“Top executives from media and telephone companies will go to 10 Downing Street to hear about Digital Britain before the plans are presented to Parliament at lunchtime”?

Did they do that? Of course, if they did, that would have been smack against the Ministerial Code. We all get into problems when rules are not observed.

Secondly, following the important point of the noble Lord, Lord Clement-Jones, will the Minister explain what is meant when the Secretary of State says:

“We will also explore how we can establish a sustainable public service organisation which offers scale and reach alongside the BBC, building on the strength of Channel 4”?

“Public service organisation” sounds like much more than partnership, which is what the noble Lord, Lord Clement-Jones, was actually arguing for. It seems to imply some kind of merger for Channel 4. The Government and others have already floated ideas of Channel 4 coming together with either BBC Worldwide or Channel 5. Is not the essential problem there that BBC Worldwide hates the idea of the former and Channel 4 hates the idea of the latter? Both those options appear to have been torpedoed.

As we are in a consultative period, and leaving aside the licence fee, can we take it that, in planning forward, no new public money will be available to help Channel 4? Is that the implication of what is being said? It is important that we are clear where the Government stand on this.

My Lords, on the noble Lord’s first question, there was indeed a breakfast this morning in Downing Street. I assure the noble Lord that, much to the frustration and disappointment of the people at the breakfast, there was no prior disclosure of the report or discussion of its recommendations.

We exchanged pleasantries over pastries, my Lords, and had a broad and far-ranging discussion about the future of the communications industries. We touched on some of the broad themes that one would touch on in the introduction to any discussion on this industry, which the noble Lord will know as well as, if not better than, me. The noble Lord would have been pleased to see that we were assiduous in following what one participant described as the analogue parliamentary convention; namely, that these things should not be discussed before they are presented to the House, and rightly so. He can be assured on that question.

On the substantive question around the second public service organisation, I divine a slight sense of frustration from the noble Lord, Lord Fowler, and other noble Lords about the wording in the document and a yearning desire for clarity. Believe you me, no one has that desire more than me. We have chosen the words carefully because, at this stage, we are right to. What do we know for certain? We know that Channel 4 exists today as a statutory corporation funded almost entirely by advertising revenues. We also know that, on any independent analysis, that business is facing significant short-term and medium-term challenges. We also know—the noble Lord, Lord Clement-Jones, made this point—that having competition to the BBC is desirable. That is a generally held view, which this Government endorse.

Therefore, the question is how you evolve from where you are to something that has scale and earns its money, its profitability and its revenue from things other than just broadcast advertising, given what is happening to that market structurally and cyclically. To do that, there are a number of options, some of which involve what might be described as publicly owned assets and some of which might involve a contribution from the private sector. In the report, we are clear that there is a case for the creation of a new second player in the market, which is a public-service organisation in terms of its remit. However, the way in which it would be constructed and its funding models is work that needs to be done between now and May and June. We are absolutely open to people’s views on that. We have detailed analysis from Ofcom, although that is, by its nature, policy-based analysis rather than financial-based analysis. But when you are moving to the point of conclusion, the financial-based analysis is as important if not, in truth, more important. That is the next stage to which we are moving.

My Lords, I declare an interest as an employee of ITV and a freelancer of the BBC. Does the Minister agree with Ofcom’s analysis that regional news on ITV will not be sustainable after 2011, even with the benefit of sharing facilities with the BBC, and that alternative arrangements will be needed to ensure plurality in regional news thereafter?

My Lords, I hope that the noble Lord, Lord Bragg, knows my views on this question because I have been clear in many places, including in this House. There is clear evidence that the challenges facing commercial-funded broadcasters are accelerating. That creates a number of issues and where, perhaps, we feel that most sharply is around regional news, which is why in the report we make it clear that when we look at this second public-service organisation, one of the parts of the remit that we would look to consider as part of its responsibility is a significant commitment to news, national news, local news and regional news. Between now and then, there are other things that we could look at and, as the noble Lord knows, we are doing so.

My Lords, will the Minister give more information about media literacy and content harmful to children, an issue that was raised by the noble Lord, Lord Clement-Jones? The Minister will remember that during the passage of the Communications Act 2003, many of your Lordships were keen to expand the role of Ofcom to take account of rather more than media literacy as far as what was going on on the internet was concerned? Has he ruled out any more effective legislation on this or is that one of the options? This is a very important subject, and children are far more adept at accessing this material than any parents are likely to be.

My Lords, if my children are anything to go by, the noble Baroness is right. On media literacy, this House was prescient. I remember the debates, and one could politely describe the provisions in the Communications Act as limited. It is clear in the report that, if there is to be this expansion of capability and this explosion of speed and distribution, and if we are going to establish a universal service commitment and these services are going to be available in a much less controllable way, you must have a corresponding commitment to looking at literacy and standards. We are specific that we wish Ofcom to come back with recommendations on whether we should legislate for that. My personal view, for what it is worth, is that I am not sure that that is a responsibility that sits most neatly with the industry regulator, but we can return to that in the final report.

My Lords, I declare an interest as chairman of RNIB. I can assure the Minister that, on the fourth ambition on accessibility and inclusion, we will be very happy, indeed anxious, to work with the Government and the industry to help to deliver that ambition. The Minister may be aware that there is a particular problem of accessibility of digital audio broadcasting radio sets as regards the visual displays and read-outs of programme content information et cetera. It would be very helpful if the Government were willing to use their good offices with the industry to help us resolve those problems.

My Lords, I thank the noble Lord, Lord Low, for his comments. As I hope he knows, in previous lives this has been an issue close to my heart, particularly in relation to accessibility on television. I am aware of the question that he raises. We would very much welcome an opportunity to work with parties, including his own organisation, with expertise in this area. We would welcome their input.

My Lords, the Minister has explained what I might describe as his bipolar vision for public service broadcasting. But is not the easy bit explaining the vision, and the difficult bit, bearing in mind that two of the four public service broadcasters in this country are private entities, putting that vision into place? Does the Minister have any suggestion on how it might be done?

My Lords, suggestions have been made by interested parties. Recently, the industry regulator put forward three options, or possibly four, depending on how one reads the document. A number of private sector parties have declared an interest in being part of a public/private partnership in creating a second entity. There have been—as I think the noble Lord, Lord Fowler, alludes to, although he puts it slightly strongly when he suggests who likes what—various options put forward by the two entities which might be called publicly owned. I hope we are saying clearly as the Government that, between now and the summer, we intend to design and devise a structure that we believe works; namely, one that reflects value for money for the taxpayer for publicly owned assets, which is sustainable, which has an ownership structure that we believe will allow it to thrive, and which has sources of income that will be sustainable in a fully digital age. We have said that we are open to declarations of interests from all parties and we begin that formal design process as of next week.

My Lords, I welcome this report, however interim it might be. It is both comprehensive and radical in its proposals. The Minister will not be surprised to know that I welcome in particular the commitment to broadband to all in the country. Does he agree that this must be the first priority? Internet services in entertainment, information and individual commercial operations carried out by individuals are essential to all if we are not to have a divide between the rich and the poor in this area. Does he further agree that the internet is just as important as motorways in providing the services that we need in this country, economically and culturally? Will he therefore make a commitment that we should have at least some public funding for this?

My Lords, I thank my noble friend for his constant enthusiastic support for this agenda. As he knows, I share his passion for it. Perhaps I may be allowed a brief reflection. I recall that when broadband services were first being sold in this country, the major player in the market took a public position saying that there would never be a market for broadband in Britain. Three years later, when the regulator decided to unbundle the local exchanges, the general view of the media was that it was an unnecessary piece of regulatory intervention in a perfectly functioning market. The evidence suggests that if you have a view, take a position and have a clear direction, the market will follow.

The internet is a truly revolutionary network. I agree with my noble friend that providing inclusion and access for all has to be the policy of a Government who believe in inclusion, and this Government certainly do. He will not be at all surprised to hear that I can make no comment on guarantees of public funding, but he can rest assured that I have strong views on the question.

My Lords, first, I am disappointed with the statement that the speed of broadband is aimed to be two megabits a second, particularly since, as I understand it, parts of Europe are offering broadband speeds of up to 16 megabits per second. What are the Government doing to try to speed things up? Secondly, what is being done to prevent the drop-off in speed the further from the exchange that the computer operating on broadband is? For those living in the countryside with long distances between their computer and the exchange, this can be quite a serious matter. Can the Minister also tell us whether there are plans to recable the country with fibre optics, which I understand are a lot faster than metal cables, and would therefore help the situation? In asking these questions, I should declare an interest as a director of a charity that uses IT to provide specialist medical advice to doctors all around the world.

My Lords, I turn first to the universal service commitment because this was what I would call a point of confusion in an earlier discussion. We have stated that we wish to establish a floor of provision, not a ceiling. It is already the case that in certain parts of Britain, rates of up to 50 megabits are available. The noble Lord should not take from what we are recommending any indication that we are trying to cap the market; far from it. We are trying to suggest that, as with the water supply, there should be a basic level of quality and that that basic level should be universally available. Why have we set it at the notional rate of 2 megabits? We have done so because in today’s world, despite its limitations, two megabits is a rate at which one can get resilient data and video services. However, in no way, shape or form are we suggesting that it is the ceiling of our ambition, because it is not. They are quite separate things.

On the noble Lord’s point about capacity, which is largely a function of how networks interconnect in their design, we recognise absolutely that network capacity is an issue. It will be a central part of our analysis of next-generation networks because they are the way to resolve the issue; namely, to put into the middle or core of the network more capacity for the services he has described.

British Telecom has announced that it is going to deploy some new fibre optic cables, and I am certain that the technology it will deploy for this will be of the new variety described by the noble Lord. We also say elsewhere in the report that we shall ask for an examination of the case for opening up access to cabling ducts and other ways of distributing the fibre optics so that it is not always necessary to dig holes in the ground; rather it can be done through access to the existing infrastructure, whether it be current telecoms infrastructure or that of alternative utilities.

My Lords, reverting to the question of media literacy, is my noble friend aware that his affirmation of the importance of media literacy today will be extremely welcome, as is the emphasis on that matter in the report? Does he agree that there is too much facile disparagement of media studies courses? While it may be the case that some media studies courses are not as good as ideally they would be, is it not absurd to suggest, given the power of the media in influencing the development of public opinion in our politics and given the ubiquity and power of digital media in our emerging culture, that people should not be educated in media literacy? Is he aware that 100 years ago, the innovation of English literature in academic studies was rather comparably disparaged, and is not the situation today equal to that? Will my noble friend continue to do what he can to encourage his colleagues to promote good media education?

My Lords, as the Minister for broadcasting and communications, I share my noble friend’s view that it is the highest calling. I remember the slight reluctance in my parents’ household when I gave up a career in the law to pursue one in the media. I managed to persuade them that it was a good decision only when I finally gained entry to this House. However, I certainly share his view about the quality of the calling.

My Lords, I welcome my noble friend’s Statement, and in particular his support for Britain’s creative industries. Given the difficulties facing the commercial public broadcasting sector, can he suggest ways in which investment in the sector can be encouraged?

My Lords, that is one of the trickiest questions. Although it was said at a private breakfast meeting, I think that I am allowed to quote the Director-General of the BBC, who this morning described this as one of the tricky tensions of the new world. In this country we rightly take the view that the sector merits and benefits from public subsidy. That public subsidy is provided in the main by the licence fee, but there are other sources. In the report we ask the question—noble Lords may criticise it as an open question, but I have never felt that asking open questions is a bad thing; I was always taught that they were a good thing—as to whether we should identify alternative funding streams. Alternative funding mechanisms for quality content are available in other countries, and we need to find answers to this question.

My Lords, will the Minister accept the deep concerns that some of us have about the creation of a second public service broadcasting organisation, particularly, if that is required, to be funded by the transfer of assets from the BBC?

My Lords, if I am on my feet, I will take the time that I have, if the House wishes to listen to me.

Channel 4 was supposed to be that second public service broadcaster and it has received hundreds of millions of pounds to become such an organisation. Does the noble Lord recognise that he will have a tough argument in this House to persuade many of us that more resources should be taken away from the success of the BBC to be given to a new organisation whose mission he cannot define and whose structures he has yet to put in place? It will be a tough job to get that through this House, and I wish him the best.

My Lords, if I am allowed to say so, few noble Lords are as renowned in the creative industry as the noble Lord who has just asked a question. He does not need me to tell him, therefore, that when you are trying to create something new, at times you are exploratory. Being exploratory in a creative process is difficult because you have to leave options open. I am well aware of the strong views on this question, not just in this House but in many places, but I would reiterate the position that the Government have clearly stated today: based on the evidence and the analysis we have seen, there is a case for looking again at what a new public service organisation, including a recast remit for Channel 4, would look like for the digital age. There are very real and difficult questions to be asked about how it would be structured and funded, and we will welcome the contribution of the noble Lord and those of all others.