My Lords, Amendment 29 was moved, as Amendment 56B, in Grand Committee by the noble Baroness, Lady Thornton, and supported by the noble Lord, Lord Best, and my noble friend Lord Stoneham. It is an important amendment and, although I was not able to be in Grand Committee, in view of ministerial replies and subsequent statements by Ofcom, the Internet Telephony Services Providers’ Association and I thought that it deserved a better answer.
The amendment is designed to prevent ISPs blocking or discouraging use of services within the legal internet that compete with their own. It would prevent mis-selling of internet services and strengthen the power of the open internet code. At the core of the problem is consumers’ understanding of the services they should rightly receive within their internet contract. Customers assume that they can use all internet services, when in actual fact there are either specific terms and conditions preventing use of services like VoIP or extra charges are incurred to do so.
At present, internet service providers have no obligation to allow their customers to access the entire legal internet, despite selling internet access to their consumers. Some mobile operators have used this to block, degrade,
impede or surcharge certain services simply because they compete with their own. It is very much in the interests of consumers and the economy that internet users have open access to all the legal parts of the internet, on the basis of fairness for consumers and to facilitate innovation in online services.
Although it disapproves of this anti-competitive behaviour, Ofcom has repeatedly stated that it does not have sufficient powers to prevent the blocking or surcharging of internet services. The amendment would resolve this problem by creating consequences for ISPs that claim to offer internet access but then restrict what the internet means through terms and conditions. The amendment dovetails with the industry’s open internet code of practice to ensure that the UK maintains an open internet for both consumers and industry, but the code is effective only if Ofcom is able to intervene if it is breached. Nothing in the amendment restricts the ability of ISPs to block access to illegal material or implement content blocking at the request of the customer.
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The Government have put forward a number of arguments against the amendment, saying that the UK communications market is extremely competitive and consumers can switch if they are not happy. However, Ofcom’s own research in September 2013 clearly outlined that consumers were not aware of traffic management practices undertaken by ISPs and whether these would affect specific services that they use via their internet service.
The Government also say that the necessary steps are in place for the creation of both the transparency code of practice and the open internet code of conduct, which the vast majority of industry has signed up to. The open internet code is a good code but on its own does not have enough teeth.
The Government say that powers already exist within the Bill. The DCMS seems to believe that the Bill has the powers to resolve the issues of concern. But on 4 November, Ofcom’s CEO Ed Richards gave evidence to the Commons Culture, Media and Sport Committee. In response to a question from Philip Davies MP, he stated that Ofcom did not believe that it had “definitive powers” to prevent blocking. He went on to say that he thought it would be “better” if Ofcom did have such powers. These views are consistent with the views expressed by Ofcom to ITSPA over the past three years. Whether or not Ofcom is right is by the way. If it is not confident that it has the powers, it will not act.
Ed Richards reiterated the view that Ofcom does not currently have clear powers to prevent anti-competitive blocking behaviour on 18 November in a further evidence session to the House of Lords Communications Committee, of which I am a member. I said:
“There has been a debate about blocking by mobile operators of VoIP services and so on. Do you think you should have the ability to be clearer in your requirements, effectively, in legislation?”.
Mr Richards replied:
“My preference and the preference that I have articulated on Ofcom’s behalf before is that it would help us if we were crystal clear that should we think it was necessary we could stop the blocking of access to legal sites”.
He went on to say:
“There are different circumstances that one would want to make sure you had assessed and thought carefully about first before invoking it, but a backstop power to make sure that you could stop genuinely bad behaviour that was misleading the public about what they were buying feels to me like the sort of power the regulator should have”.
Is the Minister going to say that the CEO of Ofcom is wrong and that it should be denied these powers?
It is very disappointing that despite my noble friend Lady Jolly’s offer in Grand Committee to convene a meeting before Report, the meeting on this amendment with the Minister Ed Vaizey will not take place until Thursday 27 October. Even though that discussion has not yet taken place, I hope that the Government will consider their position, especially in the light of the strong statements by the CEO of Ofcom on at least two occasions. I beg to move.