Information society : agenda for action in the UK : evidence received after 31 March 1996 / Select Committee on Science and Technology.
- Great Britain. Parliament. House of Lords. Science and Technology Committee.
- Date:
- 1996
Licence: Open Government Licence
Credit: Information society : agenda for action in the UK : evidence received after 31 March 1996 / Select Committee on Science and Technology. Source: Wellcome Collection.
197/324 (page 499)
![18 June 1996] [Continued Lord Gregson contd. ] indicated earlier, that is going to continue to be in a more traditional form. Lord Gregson] Can I remind you how quickly the Walkman overtook the whole of the world. Chairman] It seems to me, Mr Davey, the Committee may think that the future is more imminent than you do. Having said that, we should probably move on. Lord Haskel 939. Lord Craig raised a question on universal access and you told us about your commitment to universal access. Given, as you Say in your evidence, that small towns and villages are not economic for the franchise, how are we going to include these people into universal access and should BT be allowed to operate a local radio loop service which is probably the cheapest way of including them in? (Mr Davey) Can I say that in relation to the country as a whole, it may well be extremely difficult to embrace many of those who live in rural areas within the availability of the kind of services that we have via broad brand cable. Our franchising process is trying to find as much of the country as possible that can be dealt with in that way. It may be, I think, that thereafter one has to say, “What existing networks are there in the areas concerned?” And usually in most areas there is the telephone line anyway and one could change the rules to say, it is proper to stop the franchising process and to leave those other areas to be served perhaps by BT. I am not quite sure exactly what technology you had in mind when you were talking about the local radio loop. At the moment of course the government has allocated certain frequencies for the distribution of television to the home by what is called MVDS. It is the 40 Gigahertz band. That is available to anybody who obtains a licence from us. If BT wish to provide services of that kind it could seek licences from the ITC to do so. The use of other frequencies for that purpose might be more problematical. That would be a matter of decision for the government about making other parts of the spectrum available to provide television to the home. 940. It is as much a question of economics as technology. If, as you say, the BT cables are in there would you visualise BT having the right to transmit the services which are provided by the cable operators via their twisted pairs? (Mr Davey) 1 would envisage that as a matter of regulation. It is then a case of what is possible via that technology, how economic it is going to be to make the investment that would be necessary to use those telephone wires. Lord Hollick 941. You stated earlier that the promotion of competition was one of the objectives of the ITC. It seems that the provision of cable services to the home is an area that would benefit from competition. That is how I would see it as a consumer, if I may introduce a personal note, and yet you have supported a view that BT should be prevented from competing until 2001 notwithstanding the fact that many of the cable franchises will be more than ten years old by that time. Surely a bit of competition in the local loop in the provision of cable would be beneficial to the economy and beneficial to the consumer? (Mr Davey) I think the big problem there is that the economics of the cable business are still subject to some question marks, albeit fewer question marks today than in the past. The slow development of the cable industry in the past has been because of substantial doubts by investors on the return to be gained from that investment. And in_ those circumstances it has seemed to us that premature competition in the provision of cable television services would be damaging to the confidence which is currently leading to a massive investment in broadband cable systems, an investment currently meaning that two million homes a year are being newly passed. All that investment is being made on the basis that those operators have the right to compete with BT, or indeed anyone else, in the provision of telephone services and for the time being have exclusive rights in their area to provide cable television. Now there is always a question, I think, as to how valuable an opportunity anyone else like BT would regard providing cable television in competition with a cable operator, but I think there has been a very substantial danger that if you said to BT, “You may now compete with cable operators”, that would diminish confidence to the extent that the remaining cable systems would not be built according to the current timetable. Bear in mind, of course, that the construction of cable is less than half done. There is a lot of investment to come over the next five years, another ten million homes to be passed, and I think the enormous investment that that requires does, in our judgment, justify protection for the relatively short term. We are not thinking long into the future, but there needs to be protection in the meantime from competition by other providers such as BT. Lord Gregson 942. Given the advance of technology, does it matter that those cables are not put in? Some people would argue that technology has overtaken it and therefore we are just flogging a dead horse and spending a lot of money which will be never be recovered putting cable into the ground which is not necessary? ‘(Mr Davey) Whether there is money to be recovered from that investment I think is a judgment. 943. The investment has not been made yet, the cable is not installed. (Mr Davey) There is an enormous investment being made on the basis that there is a return to be gained from the investment. Yes, we all recognise that technology in all areas—in radio-based services as well as wire-based services—is leaping ahead in dramatic fashion. Most people, I think (and obviously this reflects the judgment of those people who are making that commercial investment at the moment) is that it is unlikely that radio based services, given the constraints on the spectrum, could compete with the sort of capacity which optical fibre](https://iiif.wellcomecollection.org/image/b32218631_0197.jp2/full/800%2C/0/default.jpg)
