§ Lord Orr-Ewingasked Her Majesty's Government:
Why, in view of their commitment to increasing competition, the Telecommunications Bill provides that British Telecom and Mercury are free to offer unrestricted real time services while their competitors have to delay or alter messages before passing them on.
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§ The Chancellor of the Duchy of Lancaster (Lord Cockfield)The Telecommunications Bill makes provision for the Secretary of State or the Director General of Telecommunications to license any person to run any form of telecommunication system and to authorise any person running such a system to provide any form of telecommunication service. The Bill does not in itself make specific provision for "real time services" or for services to be provided by British Telecommunications or Mercury.
The Government's policies towards telecommunications, which will guide the Secretary of State and the director when exercising their powers under the Bill, are set out in Clause 3(1) of the Bill. This lays down the first priority of securing that telecommunication services are provided throughout the United Kingdom whenever practicable to meet all reasonable demands for them and of securing that those who provide such services are able to finance their provision. Clause 3(2) of the Bill makes it clear that all the Government's other telecommunications policy objectives, including the promotion of effective competition, are subject to the first priority.
In exercising his existing licensing powers under the British Telecommunications Act 1981 the Secretary of State has taken account of British Telecommunications' need to finance the provision of services in rural areas, its losses on public call box services and the current state of its tariff structure under which leased circuits are provided at a substan-tial discount to the cost of equivalent calls made over the switched trunk network. He has concluded that the licensing of private operators to provide basic conveyance services over circuits leased from British Telecom or Mercury could lead to a substantial diversion of trunk call traffic to leased circuits and that the resulting loss of revenue could reduce the subsidies available for loss-making services.
Consequently the General Licence for Value Added Network Services granted under Section 15 of the Telecommunications Act 1981, which permits private operators to use leased circuits to provide fixed link telecommunications services to third parties, does not give operators authority to provide the service of conveying messages for third parties but limits them to providing services which add value, whether by the storage of messages for later delivery or by processing them in some way. No such restrictions are placed on the provision of services by means of mobile telecommunication systems.
The same considerations will cause the Secretary of State to include similar limitations when he revises the General Licence following the enactment of the Telecommunications Bill.