§ 33. Mr. HENRY M'LARENasked the Postmaster-General what is the approximate average cost of the telephone to subscribers in rural districts in Switzerland and Norway; and whether the telephone service as a whole yields a profit in these two countries?
§ The POSTMASTER - GENERAL (Mr. Herbert Samuel)The various rates in force in the two countries are given in the House of Commons Return, No. 316, of 1910. The accounts of the telephone service are not separated from those of the telegraph service in Norway. In Switzerland the telephone revenue allows of some provision for depreciation and for interest on capital, but the Government recently prepared an increased scale of charges, although it has not yet been put in force. Presumably, therefore, the present rates are regarded as inadequate.
§ 34. Mr. H. M'LARENasked the Postmaster-General how the sum payable by a subscriber in a country district for the installation of a telephone is calculated; what interest is charged on the cost of his line; whether the cost is defrayed by the subscriber, and, if so, over how many years; and whether the sum is calculated on the actual or estimated cost of the installation?
§ Mr. HERBERT SAMUELAll subscriptions for telephone service, whether in country districts or elsewhere, are based on the average cost of the kind and quantity of service required by the different classes of subscribers. The cost of the line connecting a subscriber's house with an exchange is only a part, 580 although an important part, of the cost of his service, and for this and other reasons it would be impracticable to base the charges to individual subscribers solely on the cost of such lines. In settling rates of subscription interest is charged on the capital expended on construction. In the Post Office service this rate was formerly taken at 3 per cent., but recently it has become necessary to take 3½ per cent., the rate actually paid for capital. Besides the cost of day-to-day maintenance, subscriptions also cover provision for the renewal of plant calculated according to the lives of the different kinds of which it is composed and the actual amounts expended.
MARQUESS of TULLIBARDINEIn regard to the putting up of a new telephone line, is the right hon. Gentleman prepared to allow it to be done by the owners of property who can prove to the satisfaction of the telephone authorities that they can do it cheaper?
§ Mr. HERBERT SAMUELNo, Sir. That practice has not been adopted on account of the friction to which it gives rise between the telephone administration and the owners of property, each trying to put the responsibility on the other for any defects in the service which may result from the provision of the plant by the subscriber himself.
MARQUESS of TULLIBARDINEHas the right hon. Gentleman any objection to the proprietors making an offer to the telephone authorities to put up the line to their satisfacion and to pay the bill, if they can do it cheaper?
§ Mr. HERBERT SAMUELI should like to have notice of that question. It raises an important question of principle.
§ 35. Mr. H. M'LARENasked what was the capital cost of the Post Office telephone service per subscriber on 30th December last, allowing for all expenditure that had previously been charged to capital account; what was the approximate corresponding figure for the National Telephone Company's service, valuing that service at the sum paid for it by the Government; and what is the corresponding figure in the United States of America?
§ Mr. HERBERT SAMUELThe total cost of the Post Office telephone exchange 581 system including private lines and land and buildings on the 31st December, 1912, was £7,992,078. The purchase price of the National Telephone Company's system is £12,470,264, but that sum represents its depreciated value and not the original capital expenditure which, in accordance with the findings of the Arbitration Court, may be placed at about £16,000,000. I know of no corresponding figure for the United States where exchange expenditure is not separated from trunk line expenditure. In 1911, the total expenditure in that country on telephone plant of all kinds including long distance or trunk lines as well as exchanges was estimated by a competent authority at about £191,000,000. Owing to the varying number of lines and telephones rented by individual subscribers no average of capital expenditure per subscriber would have any useful significance and no statistics are kept on this basis either in this country or in the United States.