SECOND READING. (Hansard, 3 August 1899)

THE POSTMASTER-GENERAL (The Duke of NORFOLK)

My Lords, this Bill is introduced with a view of extending the facilities for telephonic com- 1244 munication which already exist. There has been a growing feeling for some years that the facilities are not sufficient. A Committee of the House of Commons considered the matter in 1895, and they reported the evidence taken before them, but they did not produce any further Report. Last session a Committee was again appointed to inquire into the matter, and they reported that the facilities at present existing were not satisfactory from a general point of view, and were not likely to become so as long as the only medium of telephonic communication was the National Telephone Company, which had practically assumed a monopoly in this matter. They recommended that competition was desirable, and that it should take the form of more active competition on the part of the Post Office, and that municipalities, where they desired to do so, should have facilities for entering on telephonic work. This Bill empowers a loan of £2,000,000 to enable the Post Office to carry on competition where it is desirable, and if the Bill is passed the Post Office intend, as quickly as possible, to enter into active competition in London and in places where they have already got exchanges, such as Newcastle, Cardiff, &c. The Bill further enables corporations and urban authorities to use their rates for promoting telephonic work. Having that power, they have to obtain for the purpose a licence from the Postmaster-General, and that licence will only be given on the condition that no preference will be shown among those who come to them as users for the telephone. Their plant must be approved by the Postmaster-General, and the rates must be between a minimum and maximum, also to be approved by the Postmaster-General. If any municipality obtains a licence, the National Telephone Company may also receive a licence for the same term of years in the exchange in which that corporation exists, but they must come under the same conditions—the conditions I have just stated—except in cases in which they have no way-leave granted them by the municipality, and in those cases the minimum of their charges will be at their own discretion. If in any exchange in which the company are also granted a licence they have a grant of way-leave from the corporation, that grant is extended to them during the period of the licence, and cannot be taken away by the 1245 corporation. If the corporation in an exchange takes a licence, and the company elect to take a licence also, that licence will extend throughout the whole area of the exchange although the boundaries of the corporation may not be coterminous with the area of that exchange. If the licence extends to eight years beyond the present term of the licence, which is 1911, the company having that licence is bound, under certain rules to be drawn up by the Postmaster-General, to grant inter-communication to those who are on the municipal telephone, and the municipality, on the other hand, are bound to extend the same facilities of inter-communication to the company. The company is not permitted to create any fresh exchange without the sanction of the Postmaster-General, and no company may obtain a licence in any exchange without the sanction of the municipality within whose boundaries that company would work. We trust that this Bill will tend in the direction of bringing the boon of telephonic communication to certain wide classes of the community who hitherto have been unable to enjoy it; that it has been framed as far as possible to give great benefits to the community without infringing unduly the rights of the company, who have laboured for many years to promote telephonic communication; and that it will encourage municipalities to come forward and create the competition which we think is so desirable.

* LORD HARRIS

My Lords, I should be grateful if I might be allowed to offer a few remarks on this Bill. It is not usual for a member of the Government to offer anything in the shape of criticism of a Government Bill, but my remarks are so very mildly critical that I hope they may be excused on that ground. Before venturing to criticise the Bill, I took the advice of the noble Marquess, who said that if it was necessary I certainly had his permission. This is a highly important Bill, apart from the fact that it involves an expenditure of£2,000,000. It is very much in the nature of an experiment, and believing that your Lordships are always anxious that important measures should be discussed as amply as possible, and 1246 especially by those who know something of the matter, I venture to offer a few remarks. I am a director of the National Telephone Company, and have learned something about telephones; but I approach the consideration of this Bill entirely from the point of view of a telephone user. I cannot help thinking that the noble Duke will not object if I offer a few remarks from that point of view. As the noble Duke has said, the object of the Bill is to promote telephonic communication and to make it of wider use. The groundwork of his proposal is, I fancy, the Report of the Committee of the House of Commons which sat last year, and which eventually found that the supply given by the National Telephone Company was insufficient and inefficient. What I have to observe on the use of those expressions is this, that the National Telephone Company is not the only body that supplies telephone service in this country. The Post Office also supplies a service. A very large proportion of England, Ireland, and Scotland is mapped out into exchange areas, and within each of those areas the Telephone Company supply the service. But if a subscriber in one area wishes to speak to a subscriber in another area he has to go upon the lines worked by the Post Office, which are called the trunk lines, and I can assure the noble Duke that if he would appoint a committee of impartial persons who use the telephone to report on the trunk service, that committee would report that that service was insufficient and inefficient. Only the other day a friend of mine, a Member of this House, who is on a telephone exchange in Yorkshire, and also in London, wanting to speak from his own house in Yorkshire to his house in London, was kept waiting an hour and a half. He complained bitterly, as if it was the fault of the Telephone Company. I made inquiries, and ascertained that the delay had nothing whatever to do with the company, the Post Office was responsible. As £2,000,000 are to be obtained under the Bill for the extension and improvement of the telephone service, I trust it will be possible for the noble Duke to utilise some portion of the money in improving and extending the trunk lines. If he would do that he would earn the gratitude of a very large number of telephone users. There is another point to which I would like to call attention. The Post Office has the power, or at any rate 1247 it claims the power, of refusing to allow the National Telephone Company's wires to cross railways, and the result is that not only in those towns where the Post Office is in competition with the company, but also in London, where it is not at the present time in competition—and I should doubt the possibility of its being able to come into thorough competition for two or three years at the earliest—a considerable number of people are unable to obtain telephone service at all. I submit that if these would-be subscribers are to be taxed, as they must be under this Bill, for the purpose of improving the telephone service of the country, it will be a hardship if the refusal of the Post Office as regards these wires crossing railways is continued, and these would-be subscribers prevented from coming on to the only service that can be given to them. At present the Post Office declines to put some towns on the trunk service; that is to say, it declines to extend its trunk wires to these particular towns unless the company will guarantee the Post Office against loss. Last year, if I remember rightly, the noble Duke reduced the amount of the guarantee which the Post Office had up till then demanded from such persons as required a private telegraph. Well, the telephone is a telegraph. It has been found so by the courts, but the noble Duke has not reduced the amount which is required from the National Telephone Company for guaranteeing against loss. Take the important and populous town of South end. That town would not at the present moment be on the trunk service if it were not for the National Telephone Company having guaranteed the Post Office against loss. As this large sum of money is being taken for improving the telephone service of the country, I trust it will be possible to find enough money to extend the trunk wires and relieve the company of this incubus. It is not for me to criticise the provisions of the Bill, which I think the noble Duke must admit is an experiment. The experience of nearly every country, including the United States, is that a monopoly can work the telephone best, just as a monopoly was found to work the telegraph best. The National Telephone Company has been held up to ridicule as supplying the worst and most expensive service in the world; but, curiously enough, the Government in 1248 their proposals to improve that state of things have made up their minds that it is wiser not to follow the example of other countries. We shall all look forward with considerable interest to the result of this experiment. As one who, apart altogether from his connection with the company or the system of supply, believes that the telephone is one of the most useful discoveries for the convenience of society, as well as of commerce, that has been brought into use for many years, I sincerely trust that the policy recommended in the Bill will be successful; but I am bound to say that those who know a great deal about the telephone system are by no means confident that the step taken by the Government in this matter is a wise one.