Shared Rural Network

Statement

My Lords, with the leave of the House, I will repeat a Statement made by my right honourable friend the Secretary of State in the other place. The Statement is as follows:

“Mr Speaker, with your permission, I would like to make a Statement to the House about connectivity and our recent announcement about the shared rural network. Last month the Government announced £5 billion to accelerate the rollout of the highest-speed internet across the country, including our rural heartlands. The money is being targeted toward the hardest-to-reach areas of the UK, so they will not have to wait for their homes and businesses to be connected to fast, reliable broadband. They will be given connections capable of download speeds of 1 gigabit per second, to take advantage of everything the next generation of new technology has to offer.

Connectivity on the go is equally important. Mobile phones are revolutionising our day-to-day lives and are crucial for businesses as they compete and grow. Half of adults say that they would miss their mobile phone the most of all their devices, and one in three now says that they never use a computer to go online.

Yet there are too many areas of the country still waiting for high-quality mobile coverage. Today, only 66% of the UK land-mass has geographic coverage from all four mobile network operators, and 9%, largely in rural areas, has no coverage at all. So I am pleased to inform the House that last week the Government announced support for a shared rural network programme, subject to binding legal agreement being concluded. This proposal has been brought to the Government by the four UK mobile network operators: EE, Vodafone, Three and O2. It sets out their ambition to collectively increase 4G mobile coverage throughout the UK to 95% by 2025.

Under this proposal, areas which have coverage from only some providers—known as ‘partial not-spots’—will be almost entirely eliminated. This means that you will get good 4G signal anywhere, no matter which provider you are with. It also promises to deliver greater coverage in total not-spots—areas that currently have no mobile phone signal at all. The network will result in 95% of the UK getting coverage, including additional coverage to 16,000 kilometres of roads and 280,000 premises.

The biggest improvements will be felt in Scotland, Wales and Northern Ireland. The four operators will commit up to £530 million to get rid of the partial not-spots, but we recognise the difficulty of building infrastructure in remote locations, so the Government are sharing the cost and are prepared to provide a further £500 million to eliminate total not-spots, too. The Government’s investment will provide new digital infrastructure in areas that are not commercially viable for operators, to ensure that this new service provision continues for at least 20 years. It will also cover the cost of upgrades to the emergency services’ infrastructure, making it available to commercial operators. This announcement is great news for consumers and a big step forward from the mobile network operators. It will be underpinned by legally binding commitments from each operator to reach more than 92% UK coverage by 2026.

The mobile network operators will adopt new coverage obligations within their existing spectrum licence conditions to ensure that the outcomes will be delivered. If they cannot demonstrate that all reasonable efforts have been made to comply with these obligations, there are penalties for the operators, with a maximum fine of up to 10% of their annual turnover.

Although 2025 is the target date, many consumers will feel the benefit of the programme long before its conclusion. Annual coverage improvement targets will be published, and Ofcom will report regularly on the shared rural network’s progress in its Connected Nations publication. The UK has a vibrant telecoms industry and we are keen that the shared rural network proposal reflects that. This programme would be delivered jointly by all four mobile network operators, but it is expected that organisations across the industry would have the opportunity to get involved in the delivery of the programme at various levels of the supply chain, building the required infrastructure in an open, fair and transparent way.

The mobile network operator proposal is conditional on Ofcom removing its proposed coverage commitments, which were included in the design of the original auction. I have written to Sharon White, chief executive of Ofcom, setting out the Government’s support for this programme, subject to a binding legal agreement being concluded. It is for Ofcom to decide on how it wishes to proceed with the auction. This morning, Ofcom opened its consultation on an alternative auction design without coverage obligations. I have also made it clear to the mobile network operators, and to Ofcom, that the Government retain the right to support the original Ofcom auction if a final and legally binding agreement on the shared rural network is not reached.

I have considered the shared rural network proposal carefully, along with my right honourable friend the Chancellor of the Exchequer, and I am satisfied that the proposal improves on the coverage obligations set out in Ofcom’s proposed auction and should deliver good value for money. However, until a final agreement is reached, I have made it clear to the mobile network operators that the Government’s support does not make a legally binding arrangement or contract, and does not create any expectation that the Government will act in this way. In the coming months the DCMS, Ofcom and the mobile operators will work to finalise the legal agreements so that we can get on with the important job of improving mobile coverage. The operators share our ambition and I am confident that this proposal is the answer. I expect to be in a position to update this House early next year.

This is a world-first deal that means consumers will be able to rely on their own provider’s network to use their mobile phones, wherever they are. It will make patchy coverage a thing of the past and mean that more people in rural areas can benefit from the speed and efficiency of coverage on the go. This Government are committed to giving rural areas the digital connectivity needed to flourish and to making the UK a world leader in new 5G technologies. That is what this landmark investment will do”.

My Lords, that concludes the Statement.

My Lords, I am grateful to the Minister for repeating the Statement made in another place. Before I start on a detailed response, I should say that I find it hard to work out exactly what has been announced today. The money that the Minister was talking about was already announced. I am not in any sense accusing her of simply repeating a previous announcement, because there is a focus to it that was not there before. However, if the money was already available and there was nothing new in it, the arrangement seems conditional—this sounds a bit like Brexit—on a legal agreement being established in an uncertain timeframe, with uncertain consequences if it is not so done. It is therefore a sort of precursor, or perhaps a preheating, of an announcement yet to be made that an agreement has been so made.

The agreement that is being announced is one that the operators seem to have come to themselves. As was clear from the Statement, it has caused a bit of a problem. Rather unusually, it has caused the Government to suggest to Ofcom that the previously announced spectrum auction, which it has been working on for six to nine months, has to be changed at rather late notice to ensure that there are not unfortunate geographical restrictions placed upon it. If it does not all come together in an appropriate timescale, and if we do not get the solution from the operators that the Government are clearly signalling, then the whole thing goes back to square one. We will be back where we were before, with a patchy and not very satisfactory solution despite the money. I am sounding downbeat about this because, while I want to welcome it, I am a bit confused about the overegging that appears to be happening here of what is a good idea but which certainly has not yet been delivered. It is rather unusual for the Government to take steps this way forward. Perhaps there is an election coming and they wanted to get some news out. Maybe that is what it is, so perhaps I am being silly about this.

My Lords, on these Benches, we welcome the Statement in so far as it goes, but we also note that it is not yet a done deal. I had the privilege to chair your Lordships’ Rural Economy Committee. We very quickly discovered that, on connectivity, rural areas have been left way behind. The Government told the committee that they have always recognised the need for rural areas to benefit as much as anywhere else from digital infrastructure to transform the economy. Yet, as the Statement acknowledges, it is rural areas that have really lost out. There has perhaps been recognition of a need, but so far there has been no action to cater for it.

This Statement, as some other recent Statements have done, suggests a welcome, if belated, change of heart. But it will take until 2026 to eradicate partial not-spots and reduce the total not-spot land-mass from 7% to 3%—way longer than was originally promised by the Government. Will the Minister continue to look at the option of mobile roaming in rural areas to provide at least an interim solution to help with the partial not-spots?

The shared rural network deal includes dropping the coverage requirement in the forthcoming auction of the spectrum that is to be used for 5G. Given that this deal has not yet been signed, can the Minister explain why Ofcom has today announced the start of a consultation on a new auction arrangement that does not include any coverage obligation? What will happen, for instance, if this deal does not get signed? The Minister says that she is satisfied that this deal improves on the originally proposed coverage requirements. What is the Government’s analysis of future 5G coverage? If we are still going to go by percentages, will she at least acknowledge that, if we eventually get to 55% 5G coverage, rural areas will still be losing out? Surely it would have been better to include a “rural first” requirement, so that rural areas do not get left behind?

My Lords, I am grateful to both noble Lords on the Benches opposite for their welcome for this announcement, despite the numerous questions raised. I was expecting one noble Lord to raise the subject of coverage in your Lordships’ House, where we all struggle with the signal, but maybe that will come later.

The noble Lord, Lord Stevenson, asked why we were going ahead with this plan and about the implications for the auction. The noble Lord is right that the money had already been committed. In fact, more money has notionally been committed for the original auction plan. We are pleased that we are going to get better coverage at a lower price with this approach and with a real priority for rural areas. I am sure that the noble Lord will concur with that.

I may have misunderstood but, given the very low population density in the 5% of areas that will not get coverage at the end of this, the percentage of homes covered will be higher than 95%, even though the percentage of the country covered will be lower. But we can argue about the maths of that later.

Both noble Lords asked about the link with 5G. As I am sure they are aware, its deployment will rely heavily on the use of the existing 4G infrastructure, so the shared rural network is essential for paving the way to a 5G future. Having a robust 4G infrastructure will be a major asset as we introduce 5G in the coming years.

Both noble Lords asked about our plans for roaming. We do not intend to introduce roaming; this plan will introduce shared infrastructure. The noble Lord shakes his head, but my understanding is that there is a much greater risk of calls being dropped with a roaming system and that the quality of the connectivity and the customer experience will be much better with the approach that we are putting forward.

Both noble Lords asked about targets. We are expecting mobile network operators to come up with some very detailed plans in the coming months, and I am more than happy to update that House on those when they become available. Clearly, targets are important within this.

My Lords, I thank my noble friend for repeating the Statement this afternoon. I stress my disappointment at the timetable—it could perhaps be a little more ambitious.

Will my noble friend clarify one remark she made? I understood her to say that commercial mobile phone networks will have access, when this new procedure is in place, to the emergency service infrastructure. I pleaded that the North Yorkshire Police mobile phone communications system could be made available to the commercial phone networks, and I was told that was not possible because of the security implications. Can my noble friend put my mind at rest in that regard? She will appreciate that North York Moors is one of the most sparsely populated rural areas and has now achieved the nomenclature “super sparse”. Much like the noble Lord who chaired this House’s Rural Economy Select Committee, next door we had a number of reports from the EFRA Committee pleading with the Government to improve connectivity. There is a safety aspect: there are now no fixed phones—they have all been removed by BT—so we are entirely dependent, in these rural areas, on mobile phones.

I thank my noble friend for her question. She describes the North York Moors as “super sparse”; I would say they were super beautiful when I was last there. On using the emergency services infrastructure, I will write to my noble friend if my understanding is incorrect, but where she is absolutely right is that the priority in terms of the use of emergency services infrastructure is for emergency services personnel. Nothing we are planning should interrupt that and there should be no disruption to the emergency services network as a result of this proposal, but we believe that, where it is possible and appropriate, that infrastructure should be made available to share with commercial operators to deliver the coverage improvements that are needed.

My Lords, the noble Baroness remarked that the impact on your Lordships’ House had not been raised. I would like to raise the impact on my house—I declare an interest in having a property on a hillside in Wales with very limited mobile coverage provided by, I think, one company, and very poor internet coverage. I very much welcome this Statement and I share the concerns raised by the noble Lords, Lord Stevenson and Lord Foster, about the detail of how this is going to happen.

I am not at all clear whether this is just about mobile phone coverage and a gigabit of that, or whether it is meant to solve the broadband problem as well, because that is equally crucial. Secondly, I am not terribly happy about having to wait until 2025, which I think is much longer than was originally thought. Is the Minister considering some sort of interim targets between now and then? Thirdly, I am extremely worried about finding myself in the 5% and not benefiting from this at all when it happens. Can the Minister say what the Government plan to do about that remaining 5%— even if it is only 3%, as she says—because I may be one of those people?

I will try to clarify those issues for the noble Lord. This Statement is purely about mobile coverage in rural areas. The Government have made a number of other important Statements on broadband investment, again focusing on those parts of the country least well served today, but the two are separate. On interim targets, I can only repeat what I said earlier: we will be getting detailed plans from the mobile operators, and when we have them we will be working to agree targets. I am afraid I cannot give the noble Lord particular hope on the final 5%; there are currently no plans to cover that because of the costs involved.

My Lords, the Minister leads me very neatly on to my question. It is important that we remember previous pledges, one in particular about broadband. When standing for the leadership of the Conservative Party, the Prime Minister described the previous Prime Minister’s pledge to have full- fibre broadband in all homes by 2033 as “laughably unambitious”. That appears to have been completely dropped. Do we now consider that the Government’s policy is still laughably unambitious?

On this side of the House—obviously, I cannot regulate other sides—we certainly do not think it laughably unambitious. Superfast broadband coverage reached 96% of premises in April this year, which is up from 45% in 2010. That means that over 5 million additional homes and businesses have superfast broadband available, thanks to the Government’s investment in the superfast broadband programme. We have talked about the universal service offer and I hear noble Lords’ reservations, but it means that from March next year customers will be able to request broadband connections. In addition, we have announced £5 billion of funding for the next stage of the Government’s broadband buildout. I see that as anything but laughably unambitious.

My Lords, I have often nagged away about this subject because it is vital to international competitiveness and modern public services. I welcome the Statement, our industry’s initiative and the mast sharing that seems to be implicit in what we have heard today. However, can I press my noble friend on what coverage we can expect both from broadband, which she touched on—how many people will actually have it on a reasonable timescale and at reasonable speeds—and from mobile? Who and where are the 5% in the figures she announced—or 8% if you want connectivity to the big four, which I think most of us probably do—and who will miss out? Is it people and businesses, in which case I would like to know what numbers we are talking about, or just remote rural fields, the tops of mountains and certain rooms in the Palace of Westminster? It would be good to understand a little more clearly what the scale of the problem is and how quickly we can tackle it, because of the overall importance of this initiative, which the Government have rightly grasped.

I think I will need to write to my noble friend with some of the detail on her questions. I understand that the areas that will miss out are genuinely those which are both extremely sparsely populated and look more like the top of a mountain—that is, from a physical engineering point of view, the challenge of building the infrastructure is great. However, I am happy to write to my noble friend to clarify if I have misled her in any way.

My Lords, I declare an interest as chairman of the Cumbrian local enterprise organisation, which probably contains a lot of tops of mountains. The area will probably be, according to independent analysis, the most affected by Brexit of any part of Britain. One of the themes of our efforts to reinvigorate the economy, after what will on any measure be a setback, is proper digital connectivity. Therefore, while I welcome the announcement, perhaps I might press the noble Baroness to commit to the House that there will be a target to cover the entire county of Cumbria with appropriate digital and mobile coverage, so that people there can fulfil their full potential commercially.

I hear the noble Lord’s extremely valid concerns about the county of Cumbria. I cannot confirm 100% coverage from the Dispatch Box today, but I am happy to confirm that in writing. However, I stress that those areas of the country which historically have had much poorer coverage, in particular Scotland, Wales and Northern Ireland, will be the greatest beneficiaries of this investment.

My Lords, may I follow up on some of the previous questions? As I understand the proposal, the idea is that, in return for this commitment to spend money, mobile phone companies should no longer have coverage obligations imposed by the regulator. I declare an interest here as a Cumbria county councillor. Despite the efforts that have been made in our county to improve broadband coverage—they have been considerable, and I myself have been a beneficiary of them—unacceptably large numbers of people are still not covered either by broadband or proper mobile access. That is of economic significance because, if we are going to get new business into these areas, as the noble Lord, Lord Inglewood, said, they have to have this degree of coverage. So what obligation will the Government impose on the operators? When Royal Mail was introduced in the 19th century, it was given a universal service obligation; when radio and television were introduced, there was a universal service obligation; when electricity was nationalised after the end of the Second World War, a universal service obligation was imposed on the companies. Why should these companies be completely free of a universal service obligation?

I am concerned that I may have confused—I hope I have not misled—the House, so I will try to correct any confusion. The companies will have individual service obligations. Each operator will be at 92% individual coverage by 2025, with a combined footprint of 95%—I hope that the noble Lord has the Venn diagram in his mind. Part of the increase in coverage comes from the mobile operators, part comes from the investment of the Government in total not-spot areas, and part comes from the use of the emergency services network. So there will be individual commitments, there is an aggregate commitment, and a greater aggregate footprint, with coverage in areas that today have none whatever.