My Lords, Her Majesty’s Government want the UK to be a science superpower. Two key planks in achieving this are security and digital connectivity. The UK already influences and shapes global cyber standards and we have committed huge investment to counter cyber threats and to meet our digital infrastructure targets. Back in 2016, we invested £1.9 billion to bolster our cybersecurity, setting up the National Cyber Security Centre and investing in economic resilience, innovation and skills. Now we have gone further, with an additional £2.6 billion being invested over the next three years. The National Cyber Security Centre has stopped 2.7 million online scams in the past year alone, and the new National Cyber Force will proactively counter cyber threats that we face.
Our investment in innovation has seen more than 40 tech unicorns—that is, start-up businesses now valued at over $1 billion—grow outside London, with 100 more in the pipeline. We have invested significantly in superfast broadband, bringing it to 97% of premises, and are now driving investment in gigabit broadband, with over 68% of premises now able to access this technology. But we need to keep investing in emerging technologies to secure ourselves against future threats and realise the opportunities of a digital economy. Monthly broadband use has doubled in four years and continues to rise every year. Cyber threats are proliferating and technology is not always secure by design. That is why we have introduced this Bill.
We want to fulfil our commitment to delivering faster digital connectivity and to ensure that, as we grow, our technology is secure. The Bill will facilitate the extension of futureproofed gigabit-capable broadband and 5G networks, and improve the protection of people, networks and infrastructure from the harms caused by insecure consumer-connectable products. I will start with the telecommunications measures, explaining why they are necessary and what their intended effect is. Following this, I will turn to the product security measures and outline why it is important to consider digital infrastructure and cybersecurity in conjunction.
My Lords, the Product Security and Telecommunications Infrastructure Bill is another snappy portmanteau Bill from this department—or perhaps I should say, in sporting parlance and in deference to the department, it is legislation in two halves. As we heard from the Minister, it is the second half that has attracted most attention in the Commons and, frankly, from the various lobbying organisations—and it is easy to understand why. Bringing connectivity to a reasonable level across everywhere in the United Kingdom is an aim I am sure all noble Lords share in this House, as do all the MPs at the other end. However, as the Minister alluded to, there are balances that need to be brought into play when we bring this objective forward.
I shall start with the first part of the Bill, the security bit. As the Minister outlined, it is designed to enable us to face up not just to the present but to the internet of things or the network of everything, safe in the knowledge that our appliances are safe from hacking. It is not a future problem, as the Minister outlined: it is with us here and now. The consumer organisation Which? very clearly brought this to bear. It tested a range of devices, from baby monitors to smart speakers, with its ethical hackers and found 37 vulnerabilities with those test devices, including at least a dozen rated as “very high risk” and one as “critical”.
At the heart of this problem is that some of these products may have had inadequate security against threats in the first place, or that they have not been effectively upgraded by the manufacturer during the life of the product, which is why they are at risk of being hacked, as the Minister well knows. The Bill is supposed to make provision to enable the Government, via regulations, to require manufacturers, importers and distributors to make sure that their consumer-connectible products meet some minimum standard of cyber requirement before they are placed on the market. This is the problem that I face with the Bill: the majority of this part of it will come through secondary legislation, so it is hard to see at this point the Government’s objective for consumer rights.
My Lords, I support the Bill. This is very technical legislation, but technical does not make for unimportant, even today. In fact, my experience in business is that it is in the detailed technical and operational delivery that businesses succeed or fail—and when it comes to building national infrastructure, the same is true.
The strategy is relatively easy. I spent seven years as the chief executive of a telecoms company and, during that time and in the five years since, I have not found any community, business or politician who wants a different outcome. Everyone wants ubiquitously available, safe to use, affordable and, above all, high-speed connectivity at home, at work and on the move, on an ever-increasing number of devices, everywhere. The direction of travel is not up for debate. What is are the technical details to get us there as effectively as possible, which is what this Bill is about. As technical and detailed as it may be, it is none the less extremely important. It is in the shaping of these detailed laws and regulations that we determine whether we have the effective digital connectivity that we are all so agreed upon.
I am supportive of both parts of the Bill and will speak very briefly on the first half, which, as the noble Lord, Lord Fox, said, is, I suspect, less contentious. I will then speak in more detail about the second half.
I am pleased to see in Part 1 a clear framework for regulating the security of connected devices. I have been involved in a related area of digital regulation—child internet safety—for over a decade, and that experience has taught me that it is necessary to put regulation on to a legal footing. For far too long, technology companies have tried to persuade us that self-regulation is the right route for the digital world, yet we are seeing in every area of digital, as here, that self-regulation leads to no regulation and that we need to do our job as legislators and set the rules of the game. The digital world is really no different from the physical world, where responsible capitalism works best when we set legal guardrails and encourage commercial creativity and innovation within them. As such, I welcome Part 1.
My Lords, it is a delight to follow my noble friend Lady Harding, and a great pleasure to be in the Chamber with her. When I was a Minister, I worked closely with her when she was the chief executive of TalkTalk, so it will be enjoyable to respond, to a certain extent, to some of the points she made.
I begin briefly by outlining my interests. I work as an adviser to a US bank called LionTree, which has advised a UK alt-net provider called Hyperoptic. I am also, amazingly, the patron of the Institute of Telecommunications Professionals. I have no idea how that came about, as I know nothing about telecoms and I am not a professional. I was also chairman of Speed Up Britain, which is one of those lobby groups that the noble Lord, Lord Fox, pointed out in his remarks. It competes against Protect and Connect in trying to persuade your Lordships to take alternative views on how to reform the Electronic Communications Code, but I am no longer its chair; I just wanted to put that in context.
But, obviously, the reason I wanted to take part in this exciting debate—which is really where the action is today—was because of my six years as the Minister for Broadband, where I suffered the slings and arrows of outrageous fortune of people constantly telling me to hurry up and deliver exactly what my noble friend Lady Harding was talking about, which is what everybody wants: ubiquitous broadband everywhere, for as many devices as possible. It was a hard slog, but we made progress.
Like everyone else who has spoken, I will take the Bill in two parts. Starting with product security, I do not think this is a controversial part of the Bill, so it can be skimmed across relatively quickly. I doubt that there will be any amendments to it at all; it is a necessary piece of legislation in an age of digital technology where cybersecurity is at the forefront of our minds. We know that the Government recently published their national cybersecurity strategy. To give this Government, and recent previous Governments, credit, they have invested absolutely correctly in cybersecurity, both at the national security level and in encouraging businesses to take cybersecurity seriously, so the Bill is very welcome.
Wow. My Lords, may I first draw attention to my interests as set out in the register, in particular as a partner in the global commercial law firm DAC Beachcroft.
It is a privilege to follow my noble friend Lord Vaizey of Didcot, who has accomplished a tremendous amount in the area we are now discussing. I pay tribute to him. Whether or not I express some dissatisfaction with having to agree to cookies, which I think had something to do with him, I must acknowledge that, as he stressed, access to reliable, high-quality telecommunications infrastructure is now an essential service. This has never been felt more keenly than in the past two years, with so many of us being reliant on our mobile and broadband connections to work from home and connect with our loved ones.
The intention of the reformed code in 2017, as my noble friend Lady Harding of Winscombe explained, was to bring rents in the telecommunications sector down so that they would be more in line with other utilities such as gas, power and water. The explanation to the noble Lord, Lord Fox, as to why things went wrong is simply this: the market had become inflated and leasing arrangements ever more complex, leading to a significant and deleterious impact on improvements in connectivity. The code, as it stands, is just not working, so the proposed modifications in the Bill are to be greatly welcomed. I just want to concentrate on telecommunications infrastructure.
Under the current system it seems that, too often, operators and landowners are left with little choice but to argue over technical legal points of interpretation, which comes at a cost to both sides in terms of the financial and wider impact of dealing with formal litigation. I have to say that this is of great benefit to solicitors and professional advisers, but benefits no one else.
We have also seen, as my noble friend Lord Vaizey just pointed out, the emergence of large-scale and well-funded intermediary landowners, who he described as “land aggregators”, opportunistically buying up thousands of leases with a view to leveraging them for their own profit. A significant number of the technical legal arguments that seem to be emerging over the existing code are the direct consequence of their intervening influence as they seek now to resist the new valuation regime.
My Lords, it is a pleasure to follow my noble friend Lord Hunt. I begin by thanking my noble friend the Minister for introducing the Bill so ably today. I declare an interest: I was on the Select Committee for the Rural Economy and through that connected with Openreach, which kindly provided us with broadband in our home in the country.
I have to confess that I am no tech expert, and I recognise that there are many speaking today in this debate who have far more expertise than me. However, I wanted to speak today because I recognise that this is a very significant Bill which has the ability to make important changes and a real difference to so many people. Today, technology is central to our world. We all need to be connected—it is hard to function without that. However, it is not just about being connected but being able to access fast, reliable and secure broadband and mobile phone connection.
Connectivity is key to today’s world, whether it is for running a business, for children’s learning or for being socially connected. We have to have secure connectivity. I should think that most of us have received emails through a friend who has been hacked, asking for money. We need to prevent malign access to emails, contacts and files, whether they are personal, corporate or government. The importance of all this has been heightened by the pandemic, with many people now choosing to work from home and having meetings on Zoom, Teams and similar programs. If they do not have good, fast connections, they are at an enormous disadvantage.
Although I understand that connectivity is reasonably good in most urban areas of the UK, country areas are often less well served. So, as part of the levelling-up agenda, it is important that we ensure that all households that wish to be connected are able to be, and that it is possible to run a business from the depths of the country in the same way as it is for those who live in a town or city. However, just being connected is not enough. We have all suffered when broadband is down, or when it is going like a snail and everything takes for ever. Therefore, it is important that, through the Bill, we support full-fibre deployment in town and country alike.
My Lords, it is a pleasure to follow my noble friend Lady Hodgson and to speak in this Second Reading debate, so perfectly introduced by my noble friend the Minister. There can be no levelling up without universal high-speed connectivity that is safe, secure, reliable and available 24/7, like power, energy and water.
If our citizens do not have the skills, comfort or confidence to interact, transact and feel safe and secure online, we can lay as much fibre and have as much connectivity as possible, but we still will not optimise all the economic, social and psychological potential across the nation. At this Second Reading, will the Minister briefly set out in his response what the Government are doing on digital inclusion, which is so important? It is often caricatured as the soft element of this, but it is critical if we are to get the benefit of what is seen as the hard part of it—not the least of which is the fibre which we are discussing today.
Similarly, does this Bill offer us the opportunity to look carefully and reconsider the Computer Misuse Act and the provisions therein? My noble friend Lord Vaizey asked about this. The Act was passed when there was no internet and no smartphones, and the computers of 1981 looked, felt and operated very differently from everything we have in our pockets in 2022. There are many issues within the Computer Misuse Act and many of them are finely balanced. This seems an opportune moment to see whether we have the balance right and whether we are giving everybody who we rely on to keep us safe and secure online everything that they need. Will the Minister give us his views on the Computer Misuse Act?
On the Bill, many of the issues I was going to cover have been extensively and beautifully covered, not least by my noble friends, but I shall touch on a few. When it comes to an individual living in a block of flats, it cannot be right that she or he is in a materially different and potentially disadvantageous position compared with someone who is living in an individual dwelling. On the rural versus urban debate, will the Minister say more on how the Bill will ensure that there are not disadvantages wherever one resides? To echo many of the points that have been raised, I am tempted to say that if it looks like a duct and it works like a duct, we can certainly have shared services through that duct, as the Bill provides. When it comes to poles—one million of them, largely over rural England and urban Scotland—there cannot be a different approach by the very nature of how that fibre goes across the land and comes into all of our, hopefully well-connected, devices.
My Lords, I feel that I am trespassing in this debate—on this rather light-hearted blue-on-blue banter over the way there—but I fear that I ought to join in because this is an important and necessary piece of legislation and, like several of the Bills in the Queen’s Speech, it has been much delayed and is long overdue.
For the most part, we on these Benches support the Bill and wish to help it on its way to the statute book. However, we have concerns over its effectiveness and in places we think that it is wrong and in need of amendment. Part 1 of the Bill, as the Minister set out, relates to powers to introduce mandatory security requirements for consumer connectable products such as smartphones, smart televisions and connected speakers. Historically, the UK has relied on European law to help regulate security requirements. We are now in a position where we are likely to follow where the EU leads on product security. What surprises me is that the Government have been so slow to make progress with their own legislation, given how increasingly important cybersecurity has become.
The other obvious and important point is that, given how quickly technology is evolving in this field, we are always likely to be playing a form of catch-up with legislation. I wonder, therefore, whether the eloquent Minister tell us what plans the Government have to future-proof the legislation, apart from relying on bringing forward regulations following on from the Bill. For example, is work being undertaken with tech companies and manufacturers to anticipate changes to products that will change or weaken, in any way, current levels of cybersecurity? Given that the Government consulted in 2019 on introducing mandatory security requirements for connectable products, and given that legislative proposals were consulted on in 2020, do they think that the current list of products is right, and will they be keeping those excluded under review?
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The Government are committed to delivering digital growth by building a stronger, more connected and more secure UK. This is even more vital as we build back from the pandemic. We have seen rapid growth in the availability of gigabit broadband, from less than 11% of homes and businesses at the end of 2019 to more than 68% today, but, to deliver much-needed connectivity, we must have a legal framework which encourages and enables the deployment of digital networks.
To that end, we are making good progress through a package of measures. Last year we passed the Telecommunications Infrastructure (Leasehold Property) Act to address one of the key barriers to the deployment of gigabit-capable broadband in blocks of flats. We have also committed to legislate to mandate gigabit connectivity in new-build homes. These regulations will be laid as soon as parliamentary time allows. We continue to work closely with the Department for Transport to ensure that street works support deployment of broadband while protecting the road network.
We are working with industry to support its investment and have committed £5 billion of public funding to ensure that no part of the United Kingdom is left behind. We aim to reach a minimum of 85% gigabit-capable broadband coverage by 2025 and to get as close to 100% as soon as possible. We have also agreed a £1 billion deal with the industry to deliver the shared rural network, which is already delivering improved 4G coverage across the UK. The operators and the rest of the industry remain confident that their combined coverage is expected to be delivered to 95% by the end of 2025. We also aim for the majority of the population to have 5G coverage by 2027.
To improve connectivity, in 2017 we implemented reforms to the Electronic Communications Code, which regulates installation agreements between landowners and telecommunications operators. Some noble Lords here today will have been involved in the scrutiny of that legislation. The aim was to make it easier and more cost effective for digital networks to be installed, maintained and upgraded. However, there is still more to be done. We need to go further to realise the Government’s ambitions for digital connectivity and levelling up.
The Bill before us will update the Electronic Communications Code, among other pieces of connected legislation, to deliver these ambitions. Specifically, the Bill aims to optimise the use of existing infrastructure. It encourages collaborative relationships between telecommunications operators and site providers. It gives operators the ability to obtain new rights, which will enable them to take advantage of new technologies and pass the benefits on to customers. It builds on previous measures to tackle the issue of unresponsive landowners and ensures that the price paid to host telecoms apparatus is calculated in a consistent way across the country, preventing a digital divide.
Making optimum use of existing cable and fibre networks has a key role to play in upgrading services and increasing competition. The Bill introduces a new automatic right for operators to upgrade or share apparatus installed before the 2017 reforms. This will be subject to specific conditions to ensure that it will not adversely affect landowners. The measures have been considered carefully to deliver significant benefits to the public while ensuring that there will be little impact on landowners.
Furthermore, the Bill rationalises the way in which expired code agreements are renewed. Currently, an operator has to use one of three different statutory renewal routes. The Bill ensures that, whichever route an operator uses, the terms of the renewed agreement will more closely align with the code as it was reformed in 2017. As a result, there will be greater consistency in how agreements are renewed across the UK.
Making better use of existing infrastructure through upgrading and sharing, and a more consistent and efficient renewal process, will not only improve digital services but reduce the need for new installations. This means less disruption from street works and fewer mast installations in both rural and urban settings, which I am sure will be welcomed in all parts of your Lordships’ House.
We are also introducing measures to facilitate greater use of alternative dispute resolution when parties are negotiating the terms of an agreement to install telecommunications apparatus. This is to ensure that disputes are resolved more quickly and cost-effectively, and that litigation is used only where absolutely necessary. We anticipate that this will encourage constructive dialogue between network operators and potential and existing site providers. It will address situations where landowners may feel compelled to accept terms offered by operators by giving them alternative means of resolving disputes without the need for lengthy and costly litigation.
Finally, in situations where landowners are not responsive, we are creating a new court process. This process will provide a quick and inexpensive route for operators to gain time-limited rights to access certain types of land. Again, these measures have been developed to strike the balance between protecting landowners and ensuring that everyone across the UK has access to reliable and quick digital infrastructure.
I turn now to the product security provisions in the Bill, since the demand for faster broadband is driven by the increasing number of devices we are all installing in our homes. Increasingly, we are streaming more programmes on smart televisions and using telephones and tablets for video calling; half of all homes have a smart speaker, smart watches continue to rise in popularity and smart doorbells and cameras are appearing on every street. The average UK household now has nine internet-connected devices, and over 50% of all UK households purchased an additional consumer connectable product during the pandemic.
With this increased ownership and use of consumer connectable products, there comes a heightened risk of cyberattacks. Cybercriminals have taken advantage of consumer vulnerability during the pandemic, and increasingly target consumer connectable products. In the first half of last year alone, we saw 1.5 billion attacks on connectable products—double the figure of the year before. Thousands of people in the UK have been victims of cyberattacks, leaving many with significant losses of money or private data. As we have seen recently, cybercriminals can now use compromised connectable products to attack large infrastructure. In 2016, the Mirai attack disabled internet access across much of the east coast of the United States of America; we still see variants of Mirai-using botnets attacking businesses and infrastructure today. We have made significant progress to develop the UK’s cybersecurity to tackle threats such as these. In 2018, the Government published a code of practice for manufacturers to improve the security of consumer devices. The UK is a world leader in this area, and our code has since been used by Australia and India, among other countries.
Of course, this progress needs to keep up with the ever-evolving cyber landscape—hence the need to legislate now to ensure that our people and networks are better protected. Taken together, the telecoms and product security measures in the Bill work to create a reliable fast broadband network, and to support the growth of more secure consumer connectable products. The Bill will enable the Government to specify mandatory security requirements to ensure that manufacturers, importers and distributors of smart devices work harder to protect consumers from cyber risks. These requirements will be set out in regulations and are supported by experts, industry and our international partners, with whom we continue to work closely to ensure that everyone is well aware of the initial three requirements.
The first is a ban on universal default passwords. Too often, consumer connectable products come with an easy-to-guess password; this makes them vulnerable and risks compromising a user’s privacy and security. The second is that a manufacturer of consumer connectable products must have and maintain an accessible vulnerability policy, obliging them, as a minimum, to receive and respond to reports of security issues in their products. This is important to ensure that manufacturers can be made aware of, and quickly address, any shortcomings in their products, and to foster good practice to protect society as a whole. Finally, manufacturers will be required to be transparent about the minimum length of time for which a product will receive security updates. This should enhance consumers’ awareness, enabling them to consider the security of products before they purchase them and, in so doing, foster market competition towards enhanced security update periods. Where those three security requirements have not been complied with, businesses will not be allowed to make these products available in the UK. We will be able to monitor, investigate and take enforcement action where necessary.
These are the first steps towards a change in the security landscape for consumer connectable products. We have created this Bill to reflect the need for resilient and adaptive measures to protect consumers and our vital infrastructure. Both the product security and telecoms infrastructure measures in the Bill will be of benefit to the public. We have brought the Bill forward to ensure that, as our digital infrastructure evolves and as we become more connected to the internet, we protect consumers from the dangers which come with this. I hope that noble Lords from across your Lordships’ House will support the Bill, and I look forward to discussing it in detail as we scrutinise it.
I have looked through the Bill—I have tried very hard—and neither the Long Title nor the text of the Bill sets out what a consumer might reasonably expect from consumer-connectible products in their house. What might they be able to expect through the life of that product in terms of security and hacking? Assuming that there is no such thing as absolute security, following the implementation of the Bill and all its, as yet, unseen statutory instruments, what level of security should the UK consumer reasonably expect for their household, and what is their recourse in the event that that is not met?
The Government’s response appears to be a sort of micromanaging process—for example, as the Minister set out, mandating password protocols. The Government are, in essence, pitching the ingenuity of the department and the support that the department gets against the ingenuity of the criminals and hackers and, to a large extent, micromanaging how those device manufacturers respond to that threat. In a sense, that absolves them of being the innovators; it absolves the manufacturers of responsibility for delivering a security rather than meeting a requirement set out in a statutory instrument. In short, they will need only to follow the letter of the process that the department comes up with through its statutory instrument rather than deliver a level of security. In the view of this Bench, there ought to be a minimum standard of security that consumers can expect. From our perspective, we are looking at the wrong end of the telescope with this legislation. At the very least, there should be an up-front clause that sets out what that minimum expectation should be. Then, rather than micromanaging it, it would be up to the supply chain to deliver security, which would be a legal expectation.
That takes us to the subject of policing. Assuming that the Bill stays as it is, I am interested in Chapter 3, on enforcement. Once again, the meat of this provision awaits secondary legislation. The Secretary of State is responsible for enforcement, but it is not clear to me how she will do it. Perhaps the unit will do this and perhaps a new unit will be set up in the department. Could the Minister explain how enforcement will be managed in light of the 20% reduction in departmental head count being enforced on all departments by the Chancellor of the Exchequer? There will be 20% fewer people to do, yet again, a bigger job. Unless the Minister can set out a plan for enforcement, it is safe to assume that consumers in fact will not be safer when the Act comes into play.
Turning to the infrastructure part, as the Minister said, the Government’s commitment is for there to be a minimum of 85% gigabit-capable broadband by 2025. The Levelling Up White Paper of course talks about maximum coverage later on. The Minister talked about there being 100% coverage as soon as possible. What does that mean in reality—or does it mean nothing? The Minister also spoke about a majority of the country having 5G by, I think, 2027. Does that mean 51% or a larger number? There are lots of parts of the country still chasing 4G, never mind 5G. Can the Minister use this Second Reading to update us further about—and perhaps set out in writing—where the country is in implementing both gigabit and 5G across the whole country, rather than use a percentage? To give a percentage of users is slightly misleading because there are less well-populated areas where users remain very much underserviced. I also ask the Minister to update your Lordships’ House on progress in eliminating Huawei hardware from the 5G network. We are interested to know where that is going and when it might be achieved.
As I expected, the Minister portrayed this legislation as a vital piece in meeting the installation target but, before we get to that, can he tell us how the other pieces are going? As I have said, my recent travels to Devon, Cornwall and my home county of Herefordshire indicate that network coverage remains poor at best and is sometimes not there at all. Given that these are some of the more rural parts of the United Kingdom, I take that to be the standard that most rural communities are surviving through. What extra is being done to get better coverage in these places, rather than focusing on the big numbers—the big conurbations, cities and towns? To date, the evidence suggests that this is not successful. It seems to me that the issues in the Bill are not the issues preventing this happening.
The Bill is about access—I think the Minister was a Whip at the time of the last pass on this. Somewhere in the dog days between two of the Covid lockdowns, my noble friend Lord Clement-Jones and I were climbing through the niceties of multiple-occupancy access and wayleaves in the then Telecommunications Infrastructure (Leasehold Property) Bill—another of the Minister’s snappy Bills. Perhaps this should be the starting point. The Minister mentioned it today but, taking that previous Bill as a template, when it comes to access, what worked and what did not work? I get a sense that access is piece of string that the telecoms operators will keep on pulling for ever, so what has sparked this new Bill, and what did not work under the previous ones? Their briefings seek to raise this as a key issue, but is that really the case? Is the lack of access that I described earlier the overwhelming impediment to the rate of installation, or is it something else? Is it perhaps the rate of investment, the skills available or the capacity to do so many projects overall? I suggest that all three are key elements in the rate at which the installation we need is happening. Can the Minister balance those issues with the issue of access, which is the only issue being addressed in the Bill?
Changing access regulations is also an opportunity to drive down costs. If they are being passed on to consumers, that is no bad thing—but are they? Speed Up Britain, a cross-industry organisation, is campaigning for the Government to close the loopholes—very much in the way that they are—and points to benefits. Other campaigners highlight a potentially catastrophic drop in income faced by local community organisations and local authorities in the rent-to-host infrastructure, such as mast licences, which was caused by the last Bill and will be further enshrined by this Bill; those campaigners estimate up to a 90% drop in income. In a meeting, the department puts the fall at around 60% to 65%. Either way, this is a big fall in income for, say, a local football club.
So who is benefitting from the drop in operational costs? Many of the mobile towers are now owned and operated by towercos which sit between the landowners and the telcos. I suspect that changes in the use of shared apparatus, as heralded by this Bill, will drive more of that intermediate role for towercos or similar. Are these towercos passing the savings through? To date, I think it is very hard to see that consumers have seen any benefit from that fall in cost.
The other delicate balance that has to be weighed carefully is the role of BT Openreach and the need to foster genuine competitivity across the sector, rather than having a collection of niche operators and a 500-pound gorilla. Can the Minister please tell your Lordships’ House how the market for full-fibre and gigabit-capable broadband is currently split, and what analysis his department has of how that will be affected or otherwise by this Bill? There is a possibility that the nature of the changes proposed in the Bill will disproportionately benefit the dominant player in the market, so that analysis will be very important.
As we have said, there are two parts to the Bill: there is a serious danger that the second half activates a series of unintended consequences, while I fear that the principal danger in the first half is that it has very little consequence at all. We look forward to working with the Minister on improving the Bill in Committee.
Turning to Part 2, even those stakeholders concerned about it are united in their agreement that enabling the rapid and effective build-out of mobile and fixed digital connectivity is an essential part of modern society. The devil really is in the detail here. I believe the Bill strikes the right balance between protecting property owners’ rights and the broader benefits to the whole of society of speeding up the delivery of faster connectivity.
Again, we should take our cues from the physical world. The Government are right not to move away from the changes in valuation methodology made in 2017, bringing telecoms infrastructure in line with other much older physical utilities, and right to extend this approach to renewals. I appreciate that this has meant a material reduction in rent, but as telecoms matures, surely it is fair to consumers, and ultimately landowners, to treat it in the same way as other essential utilities.
It is also important that, wherever possible, we enable rather than restrict competition in the building of these telecoms networks. When I first came into the industry in 2010, BT was not investing at all in building full-fibre networks. For the best part of a decade, the UK lagged behind many other countries because BT preferred to upgrade its copper, in large part because there was no credible threat to its Openreach-monopoly copper infrastructure. We are in a very different position today, with several alternative fibre providers building scale networks, which is providing consumer choice and spurring on Openreach to invest. It is in the detailed changes to telecoms regulation that this has been made possible; among other things, by forcing Openreach to make its ducts and poles open to alternative providers.
This physical infrastructure access—or PIA, to those of us in the industry—is a very important ingredient in speeding up the rollout of fibre broadband. It has enabled competition, which in turn is driving investment. As currently drafted, the Bill extends the effectiveness of PIA by allowing the sharing of existing ducts under private land, which will significantly speed up and extend rollout, and resolves the anomaly of different rules for cable duct infrastructure if built before or after 2017. However, it is not clear how telegraph poles are treated. This is where the detail starts to really matter. I ask my noble friend the Minister to clarify that operators cannot only lay cable to a telegraph pole and string fibre in the air between poles but can roll fibre up the pole itself. That may seem obvious, but if we do not get this sort of detail right in regulations, you cannot build the connectivity.
Another key area where we need to be careful about protecting competition is in access to multiple-dwelling units, or MDUs. I have huge sympathy with Members of the other place who have proposed amendments aimed at making it easier for Openreach to fibre-enable blocks of flats where it is having trouble contacting landlords. It is so important that we do not exacerbate existing non-digital inequalities in the digital world, which is exactly what happens when the fibre rollout goes past blocks of flats in many communities across London and other cities.
But—and it is a big “but”—there is a very big difference between the cabling in multiple-dwelling units and the ducts and poles in rural areas. Ducts and poles are now part of the PIA regime I mentioned earlier, so competing fibre providers can all use them. Openreach’s existing copper cables in multiple-dwelling units are its to use alone, so relaxing the rules for Openreach in MDUs such that it does not need permission from the landlord to upgrade to fibre is not only an extraordinary power of entry—one we do not even give the police—but gives Openreach a huge competitive advantage. Tempting though it might be in the short run, relatively recent history shows that embedding an infrastructure provider’s monopoly—in fact, embedding this infrastructure provider’s monopoly—is never good for consumers in the end. I encourage my noble friend the Minister to resist similar amendments should they be brought to this place.
With the not inconsiderable challenges our economy faces as we emerge from Covid, we need detailed supply-side changes such as this Bill that will help drive growth across the country via digitally enabled, safe, secure and competitive markets. As such, I am pleased to support it.
Like all other noble Lords who may be taking part in this debate, I have read the briefings that have come in to me from both Which? and a company called NCC Group, and they all seem to make extremely valid points which may well be worth exploring in Committee. For example, Which? has suggested that online marketplaces should be covered so that products that are sold on them reach a minimum standard; that there should be a minimum time period in which a company guarantees to update the software on a connected device; and that connected devices fall within consumer rights law. NCC Group has suggested that there should be some form of third-party verification of online devices to ensure that they are compliant. That seems eminently sensible. It also has a minor obsession, which I cannot really understand, with e-scooters, so my simple question to the Minister is: is an e-scooter a connectable consumer product? I think it probably is, but they can of course be hijacked and the brakes put on remotely. A very interesting and worthy point of debate is the amendment to the Computer Misuse Act to see whether there is a public interest defence to ethical hacking. Those are just some points to put on the record which I would be willing to explore with other noble Lords in Committee, should they be minded to table amendments.
But let us now turn to telecoms infrastructure, where I carry the scars on my back, as it were. In fact, it is probably my fault that we are here debating this at all, because I was in charge of the first reform of the Electronic Communications Code. But as he has not made it to this place yet, let me firmly blame Oliver Letwin for everything that went wrong there, because the minute he got hold of it, it became an All Souls seminar, and it took about three years to get it through Whitehall. However, we did deliver some changes. I make no apology for the changes that were made because, at the time, obviously, the relationship between the infrastructure provider—whether it was a mobile infrastructure provider or a fibre infrastructure provider—was very unequal with the landowner. If you wanted to get your mast or to lay some fibre across somebody’s land, the landlord had all the bargaining chips in their bag, and—quite rightly, of course—they extracted generous rents to provide for their land.
Contrary to what some people may think, the telecoms business is not overly lucrative. For example, the margins for mobile telecoms providers in this country are about 1% or 2%; it is a very fiercely competitive marketplace. In fact, my noble friend Lady Harding is partly to blame, because TalkTalk has ensured that the prices that consumers are prepared to pay for broadband and mobile phones are far lower than you would be prepared to pay on the continent. It is a relatively low-margin business, and there is no doubt that the high rents that landowners were charging were hindering the rollout of infrastructure.
There is an argument—and Protect and Connect put this—that the pendulum swung too far the other way when the Electronic Communications Code was reformed and rents dropped far too precipitously but, if I had to take a side, I would much rather lower rents and investment in infrastructure and quicker rollout than the higher rents that were in place before we reformed the Electronic Communications Code. The simple fact is that if we want mobile and fixed connectivity, it is all about the planning. The technology is actually a complete sideshow; the real pain is getting the planning. I will go off on a slight tangent here. The extraordinary lack of joined-up thinking in many local authorities is a wonder to behold. I was talking to a mobile phone company the other day which, obviously, wanted to put in small 5G masts and was told by the lamp-post department of a London council that the lamp posts were not to be touched, so the lamp-post department was stopping the other departments in the council fast-forwarding 5G in the local authority area.
I was lucky enough to get full fibre broadband in my small village in Oxfordshire, Sparsholt. I wonder how that happened. I pay tribute to Craig Bower from Oxfordshire County Council—I am sounding a bit like an MP here—Martin Crutchley from Openreach and local resident Maia Sissons, who got everyone in a row. I saw over the five to 10 days how much planning, extraction, digging and so on had to take place to fibre up simply a rural hamlet of 100 homes. That is happening all over the place. Whether it is a TalkTalk, CityFibre or Openreach engineer, we are very lucky to have people doing this work. It is difficult, time-consuming and takes a great deal of planning.
If we are to move forward, we must keep that in focus, which is why I would support amendments on the points to do with both telegraph poles and multi-dwelling units. I am told by Openreach that a letter has gone to the Minister setting out a way by which telegraph poles may be brought into the scope of the Bill, which is a very exciting development. If that way can be found, I would certainly support an amendment that would allow telegraph poles to be upgraded. Again, just as a point of interest, in both my home in London, in Shepherd’s Bush, and my home in Oxfordshire, the fibre cables are delivered on a telegraph pole, so telegraph poles are important. Openreach says there are something like 1 billion miles of fibre on telegraph poles all over the country.
I part company with my noble friend Lady Harding on multi-dwelling units. This goes to the heart of some of the issues to do with infrastructure rollout and a problem I had when I was the Minister. I was constantly berated for putting all my eggs in the Openreach basket and asked why I was not fostering competition and all these extraordinary alternative providers, such as TalkTalk and CityFibre, which could really hold the candle to BT Openreach and really take it on. Funnily enough, when broadband came to my village in Oxfordshire, I was alerted by an alt.net provider, and I rang the provider up. I said, “I would love to get broadband from you: I will go through the front door.” It said, “No, sorry, it was a mistake. We put the flyer in but, actually, we’re not interested in fibering up your village.” If you want as much connectivity as quickly as possible to as many homes as possible, you have to put Openreach at the centre of your strategy.
It is a misplaced intellectual argument to say that Openreach cannot upgrade multi-dwelling units where there could be many people living on low incomes who will depend on digital connectivity because, somehow, it is anti-competitive. I also think it is a slightly spurious argument to say that Openreach has greater powers than the police to enter your premises thanks to this legislation. It is not as if someone from Openreach is going to get into your flat and make themself a meal of spaghetti Bolognese while it busily upgrades the telecoms infrastructure in your multi-dwelling unit.
We all know that getting hold of, identifying and getting a response from landlords in multi-dwelling units can be extremely difficult. Making a simple upgrade to increase the connectivity for dozens of people living in those flats seems eminently sensible to me. The argument that it will prevent alt-net providers providing fibre rollout has long since gone. Only yesterday, CityFibre raised £5 billion in debt to continue its expansion. The fact is that alt-net providers have very rich pickings in central parts of our urban environment, whether it is London, Manchester, Bristol, Newcastle or anywhere else where they can put their networks into flats. Where I live, in Shepherd’s Bush, we have had three or four fibre providers digging up the road, one after the other, because they know that it is a competitive enough environment for them to put in an investment.
My next point was mentioned in, I think, the speech from the noble Lord, Lord Fox; although I am obviously not the chair of Speed Up Britain, it is quite clear where my sympathies lie. It is worth pointing out that Protect and Connect is supported by what is known as a land aggregator, an invention from the US, where so many of these clever financial wheezes are invented. It buys up the land where mobile sites are—a sensible business approach—and so ends up having thousands of sites all over the country. It is then clearly in its commercial interests, but frankly not in the interests of UK plc, to ensure that the rents extracted from those sites are as high as possible.
I urge noble Lords to get behind this Bill. I will certainly look at supporting amendments to make it easier to upgrade existing infrastructure in multi-dwelling units. I also hope that my noble friend Lady Harding and I can work together on the specifically denoted “telegraph pole amendment”.
I want to finish on one important point. It is now traditional in these speeches for me to lavish extraordinary praise on our Minister. I note that I have not even mentioned him so far in my speech. In conclusion, therefore, let me say how pleased I am to see the Minister on the Front Bench. I do not know how long he will be there, given what is happening across the way—he may be our Prime Minister in a week’s time, voted in by application—but to see this Renaissance man move from Raphael to Open RAN, from Modigliani to mobile and from Botticelli to broadband is always a wonder to behold. I look forward to his concluding remarks.
The emergence of this sector is all about profit and, as far as I can see, serves no useful social purpose whatever. I am reminded of the claims management companies—other noble Lords may also recollect them—that sought to create a compensation culture until they were effectively regulated. The market has created this situation, which others are seeking to exploit. Such behaviour undermined then and now undermines civility in society.
The purpose of these further modifications to the code, as I understand them, is to try to avoid these pointless skirmishes by simplifying and clarifying the statutory regime and by ensuring that every existing telecommunications installation has a clear and relatively straightforward road to renewal and a consistent basis of valuation. Without these modifications there is a real risk that existing sites will have to be removed and an application to rebuild them made, with all the consequent costs and delay of removal and reinstatement, as well, of course, as the break in coverage for the end users—in other words, unnecessary cost and inconvenience all round. That would make a mockery of the stated intention of the code and these modifications, which is to speed up connectivity.
I stand between my noble friend Lord Vaizey and the Minister, to whom a lot of tributes have been paid. I echo them, but the Minister now has a heavy responsibility to justify our faith in him. As he knows, I believe that further tweaks to the drafting may be needed to ensure that the intention to speed up connectivity is crystal clear in the Bill and, in due course, the Act. We must not miss this golden opportunity to get the code into good order so that the focus can rightly be on building world-class infrastructure and connectivity, as opposed to further endless litigation and delay. I therefore strongly support the Bill and look forward to participating in all its stages.
I understand that the Government have set a manifesto commitment on the UK’s broadband connectivity, aiming to reach 85% of homes by 2025. Openreach tells me that its ambition is to pass 25 million premises with full fibre by December 2026, including at least 6.2 million properties in very hard-to-reach areas. I understand that, so far, it has reached 7 million homes and businesses, including more than 2 million in hard-to-reach areas, so in five years it aims to treble this. However, as we have all heard, one of the particular challenges it faces is in securing wayleaves. I understand that the Government have recognised this and, after consulting on the Electronic Communications Code, have proposals in the Bill to amend the regulations.
Fulfilling Openreach’s goal is not just about new connections; it will need to upgrade some of its existing infrastructure. Although the Bill will amend the ECC to retrospectively add automatic upgrades to existing wayleave agreements, it crucially limits these only to apparatus that is installed underground, and it is more restrictive than the existing provisions for upgrade rights within the ECC, which would apply to new wayleaves it agrees.
As we have heard, these changes will not help deliver upgrades to full fibre to blocks of flats, nor help in rural areas where most of the network is built overhead on poles—I absolutely hear what my noble friend Lady Harding said about going up the poles as well. However, although I understand that there is a debate to be had about the rights of property owners, we are talking about properties where wayleaves have already been granted. Again, I absolutely take my noble friend’s point about competition, but surely it is a balance between competition and quick rollout. For me, the pendulum swings to quick rollout.
Thus, in its present form, this Bill is surely missing an opportunity to really turbocharge the rollout of full fibre to deliver the manifesto commitment. In welcoming the Bill, I hope that consideration will be given to retrospectively apply automatic upgrade rights to existing wayleaves, in line with those that already exist in the code. Through this Bill, I hope that we can help everyone across the UK, including all those in remote areas, to access fast, secure and reliable broadband.
On the timing of negotiations around wayleaves, how will the potential differences between the provisions in this Bill and those set out in the TIL be resolved with, in some circumstances, a difference of six years as against 18 months? What is the situation on fragmentation around wayleaves? How will the Bill resolve those issues, which are often at the trickiest end of the wayleave debate?
Finally, I welcome this Bill, as have other noble Lords, and I intend to take part in all stages and get alongside many of the amendments that will be put down. We have a unique opportunity to connect our nation and enable individuals, citizens, communities and companies to be connected safely and securely and able to interact and transact for economic and social good. I welcome the fact that the Minister is leading this Bill. I think we would all agree that with his sartorial elegance and political eloquence he is a highly connected, smart device.
We particularly welcome the move to bring forward a ban on default passwords, a requirement for products to have a vulnerability disclosure policy—whereby security weaknesses in a product are identified and notified—and the requirement for transparency about the period for which a manufacturer will provide security updates for the product. However, I wonder what guarantees consumers will have that these policies will be adequately policed and that enforcement will be effective. Will additional resource be committed, and how quickly will this regime be introduced? Surely the failure of the 2017 code suggests that action is needed now if product security is to be taken seriously.
Part 2 of the Bill covers the rollout of sites to extend and improve the digital network—something that we are all signed up to—and to ensure that it is capable of delivering digital connectivity to a level and standard which a modern economy demands. The Government’s approach so far raises questions about their judgment on the balance of power between landlords providing sites for installations and the network providers. Clearly, something is not right when companies can almost unilaterally determine the level of rent that they are prepared to pay for sites, regardless of earlier agreements. We are not convinced that the arrangements set out in the Bill get the balance right. Landlord-tenant relationships are complex matters, subject to laws that are often open to wide interpretation. What appears to be missing here is a process for dispute resolution that takes into account the original agreements and accurately reflects the value of the site to the network providers. We will no doubt, with others, seek to probe this during the course of the Bill, ensuring that principles of fairness and equity are properly written into the legislation and, in particular, that the many charitable and sporting organisations that benefit from rental income are not disadvantaged.
This is legislation worthy of support from these Benches and, like others who have been involved in the debate this afternoon, we look forward to bringing forward practical changes and improvements to the Bill which will ensure that, when it is on the statute book, this legislation is effective and assists in rolling out our digital connectivity in a way which will greatly benefit our society. We are happy to engage in that process.