This is a shortened version of the 2009 Conference Address adapted for the Parliamentary Information Technology Committee (PITCOM) meeting at the House of Lords on the same day.

CMA Chairman, Carolyn Kimber, said:

My Lords, ladies and Gentlemen: When I gave the Chairman’s address to the CMA’s annual  conference earlier today I had little idea I’d be asked to repeat it so soon. 

We live in interesting times:

• Last week the Council of Ministers met in Prague to discuss the future structure of telecoms  in the EU.  It’s not clear they made much progress.
• Last week, BT’s share price fell to an historic low.
• The growth of broadband take-up has slumped to a relative trickle.
• Some mobile operators are still cautious about any attempt to refarm 2G spectrum.
• The broadcasting sector is in disarray.

Who would be a regulator in such times?  Indeed, who would be a politician in these times ?  Who can steer the UK’s businesses – so dependent on digital network investment  – in these ‘interesting times’ ? 

But, at challenging moments like this, we rise to the occasion.  We find the right people and the right solutions for intractable problems. To quote Ed Richards :  “Governments in this area works in cycles. This is the point in the cycle where you need some urgency - some vision - and some decision-making from government.” 

The interim report on Digital Britain is an example of this process:

• We have a Minister who is a real expert at his business.
• We have a series of visionary proposals.
• We have some new thinking – coming from his office.
• And we have powerful examples from many other European countries to demonstrate the commercial and societal imperatives of investing in what President Obama called: “the digital lines that feed our commerce and bind us together”    

OK.  We know that Lord Carter’s interim report hasn’t been universally welcomed but an interim report is   ……  an interim report. The report has raised as many questions as it’s provided answers.  We are, at best, uncertain about the target of “up to” 2Megs.  We would like to see a commitment to national roaming for basic mobile voice and data calls.  But, at least, we think it reflects what is,or was 4 weeks ago, politically possible. Getting all government departments to buy in to the Digital Britain report was a major achievement in its own right.  It’s a step in the right direction. We also applaud  the revision of government policy on spectrum auctions. 

CMA will contribute to the final version of Digital Britain. We hope many of you will also play your part in deriving and in driving the new policies that UK businesses and citizens need for the next decade.   

The CMA began that process today when we  launched our first-ever Manifesto. It’s packed full of proposals for changes that will benefit British enterprise and, through that, the national economy. The CMA is a national charity, so this manifesto isn’t politically partisan.  We bring to the attention of legislators, of all varieties, what needs to be done to enable British businesses to be at the forefront of international competition.  

Our manifesto is built around five fundamentals. First - the need to address a significant failure in our national ICT policy. Everybody here knows that the structure of government is unavoidably complex. But the structure fails to acknowledge that ICT, like finance, is all important and all pervasive  - again – “the digital lines that feed our commerce and bind us together” . 

This lack of any central remit for ICT policy has an impact that might be compared to

• the lack of centralised financial authority in the Treasury,
• or centralised Energy policy,
• or a focus for environmental issues.
• or any other essential infrastructure. 

ICT policy-making is spread between many departments. It lacks continuity and stability in ministerial appointments. Lord Carter of Barnes has now been appointed as our first-ever Communications Minister.Excellent -  but he reports to two masters.  Responsibility for broadcasting and content is centred on DCMS in Trafagar Square. The technical and economic aspects of telecoms are at the other end of Whitehall in BERR. The physical distance  – maybe a brisk 10 minute walk – stretches across a gulf of non-convergent confusion. 

Activities that really should have been carried out in government have been outsourced to the regulator.  The regulator is becoming visibly under-resourced and over-stretched.   Governments deal in policy and regulators in policing that policy.  If the resources of Ofcom are diverted into policy-making (and, we now hear, into regulating the postal services) there is a vacuum at the top. Further distortion is introduced when we remember that, as an independent regulator, Ofcom isn’t responsible to government at all, but to Parliament. Industry is visibly converging at high speed.

The economy demands a high-speed converged approach to policy-making at the top reaches of government,  It demands a properly resourced, fully independent regulator. It demands a clear division of responsibilities between these two.   Other countries like Japan already have a converged Ministry.  Is it any coincidence that this focus has driven Japan towards a fully-fibred access network ? 

Second in our Manifesto’s fundamentals is the urgent need for a new Comms Act.Two-thirds of the revenues received by the telecoms industry comes from public and private enterprise.  Despite unceasing pressure from CMA over the last 5 years the political and regulatory focus is still on protection of the “citizen-consumer” rather than recognising, or even understanding, the needs of the business user.  Ofcom is belatedly recognising the problem and is trying, albeit far too slowly, to do something about it.  But the culprit, -  the Communications Act 2003 – doesn’t give Ofcom much leeway.

The Act fails to recognise the significant differences between Granny Jones and UKplc.The needs of big businesses were excluded from the present Act because politicians believed that big business was well able to look after itself and that the primary duty of the legislation was to protect the citizen-consumer.  Events over the past five years show that there are many very real differences between the needs of domestic and business consumers; and the concerted lobbying power of the suppliers far outweighs anything that their business customers can bring to bear.  We need fair recognition of the interdepencies between citizens and the needs of commerce – again – “the digital lines that feed our commerce and bind us together”.  

The 2003 Act has failed UKplc.  If a new Act is not being being prepared then it is urgently overdue.  The next version should place a legal duty on Ofcom to address the needs of enterprise users in its consultations and decisions. 

The third of our Manifesto fundamentals is the need of UKplc for next generation broadband access networks to reach every part of the country. Five years ago, Lord Currie, in his speech to the CMA’s 2004 conference, didn’t pull any punches on this issue.  I quote: “as a Nation we have set ourselves a target for the roll-out of ‘broadband’ without having the physical infrastructure for a true broadband access network in place. We can stretch the POTS to being a mid-band network. And DSL is that ‘stretch’ on copper wire. But true broadband it ain’t. ….  it is not the major, life-changing experience that broadband should be.” End of quote. 

Lord Currie resisted any wishful thinking for state intervention.  He called for progress towards 10Megs through competition. Successive reports from the Broadband Stakeholders Group, from Francesco Caio, and now, at long last, from Digital Britain, have all echoed Lord Currie’s 2004 thinking.  Dithering is not an option - we must do something about it.

Do we see any encouraging signs?  Ofcom has announced that BT will be allowed to make a reasonable return on investment in VDSL.  Ofcom has also said that it is tearing up – sorry – adjusting – its previous dogmatic dedication to free-market auctions for spectrum.  Efficient market theory seems to be increasingly recognised as a deficient market theory. 

But universal broadband access isn’t enough, by itself, to guarantee our future.  Unless effective policies are in place to prevent anti-competitive restrictions on the use of the new networks, we could face a return to a monopoly, in both infrastructure and services. 

Our fourth fundamental is in the Manifesto because we’re thoroughly fed up with the inadequate coverage provided by the existing GSM networks.  3G coverage is even worse.We recognise that recovery and reallocation of the 2G spectrum to 3G services is going ahead, but we are not convinced that national coverage will be improved. 

Last week Ofcom announced that the 3G operators have all met their coverage requirements imposed as part of the auction process.  Job done?    I don’t think so. The implication is a bit like saying we have 100% broadband -  so not a not-spot in sight? We are demanding roaming of basic services between national operators. 

We challenge Ofcom’s allegation that this will reduce competition.  If Digital Britain recommendations are to mean anything in practice, this is the minimum condition that must be imposed on the MNOs who, on the face of it,  enjoy a sort of collective Significant Market Power in the UK market   

For our fifth and final fundamental, we seek reassurance from government that it will, over the next five years, actively encourage  the European Commission in its pursuit of a clear roadmap, complete with milestones and targets, towards a single market in ICT goods and services across all 27 Member States. 

So, to summarise, our manifesto says:

• Address the need for converged, ICT policy making at the top of government;
• Bring forward new or revised legislation and place a responsibility on the regulator to address the full needs of UK plc;
• Adopt, without delay, a national policy aimed at the provision of a universal broadband access infrastructure to which all service providers have open access unconstrained by technical architectures;
• Ensure real, effective and sustainable competition in the supply of telecommunications goods and services;
• Promote a mobile communications network that provides better than 95% geographical coverage and allows roaming of basic services between national operators.
• Pursue a Single Market in telecommunication goods and services across and within all 27 Member States of the European Union, based on a harmonised and rationalised system of sector-specific regulation and competition law.

 My lords Ladies and Gentlemen, there’s more in our manifesto than I’ve been able to cover tonight.  The common ground is that we all need to see  greater infrastructure investment in the digital lines that feed our commerce and bind us together” 

It’s a very simple but powerful line - but remember that when President Obama used those words in his inuagural address he linked it with several areas of basic infrastructure investment.  We ask of government only that they do not, inadvertently let go of something that they might not yet have fully grasped. 

Please take away this basic idea.  Broadband access is a basic utility and quite distinct from the array of competitive services that can be delivered through those digital lines that feed our commerce and bind us together. 

Thanks again for the opportunity to speak here tonight.

 [transcript ends]

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