Telecommunications (Security) Bill
Public Bill Committee, 14 January 2021.
Philip Hollobone (Conservative, Kettering)
Before we begin, I have a few preliminary announcements. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings of this Committee. I would also like to remind Members of the need to observe the rules on physical distancing, both in this room and when entering and leaving via the marked entrance and exit doors. It is important that Members find their seats and leave the room promptly in order to avoid delays for other Members and staff.
Today we will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication, and then a motion to allow us to deliberate in private about our questions, before the oral evidence session. In view of the time available, I hope, but cannot insist, that we take those matters without debate. I call the Minister to move the programme motion standing in his name, which was discussed on Tuesday by the Programming Sub-Committee for this Bill.
Kevan Jones (Labour, North Durham)
I have no problem with the programme motion, because it is sensible, but I want to put it on record that it is frankly nonsense for us to come in today and sit in a room to take evidence from virtual witnesses, as we will do next week as well. There is no reason why evidence sittings, particularly, could not happen remotely. I have attended two meetings this week, including a meeting on Tuesday of the Defence Committee, which took evidence from witnesses virtually.
I understand that things are being done in this way at the insistence of the Leader of the House. I think he is hiding behind the usual channels having sorted it out. I want to put it on the record that that is not true and that objections have been raised by the official Opposition, certainly about evidence sittings being done in this way. If we are to travel long distances, as many of those present have, to get here today and next week, that flies in the face of the advice of not only the Government but Public Health England about moving between areas.
I do not know whether, at this late stage, we could at least consider whether next week’s evidence could be taken virtually, because it is a bit ironic that we are sitting in a room here—I accept your rulings about social distancing and so on, Mr Hollobone—and that the evidence that we shall listen to from the witnesses today and next week will be given virtually.
Philip Hollobone (Conservative, Kettering)
Mr Jones, I note your remarks and know that many others will share your view. As the Chair of the Committee I can operate only under the rules that I have been given by the House.
Philip Hollobone (Conservative, Kettering)
Copies of written evidence that the Committee receives will be circulated to Members by email and made available here in the Committee Room.
Philip Hollobone (Conservative, Kettering)
We will now go into private sitting.
Examination of Witnesses
Philip Hollobone (Conservative, Kettering)
All our witnesses today will be giving evidence by video link. Before calling the first panel of witnesses, I should first like to remind all hon. Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings in the programme order that the Committee has just agreed. For this first panel, we have until 12.30 pm. Secondly, may I ask whether any hon. Members on the Committee wish to declare now any relevant interests in connection with this Bill?
I now call the first panel of witnesses: Patrick Binchy, technical services director at Three, Derek McManus, chief operating officer at O2 and Andrea Donà, UK head of networks at Vodafone. Would the witnesses please be kind enough to introduce themselves for the record?
Philip Hollobone (Conservative, Kettering)
Patrick, I think that was because we were in private session, deciding how we were going to conduct our affairs. You were not cut off out of any rudeness; it was simply that we were going through some procedural matters. May I ask Derek McManus to introduce himself, please?
Philip Hollobone (Conservative, Kettering)
Thank you. Andrea Donà?
Philip Hollobone (Conservative, Kettering)
Q May I ask our witnesses whether they would like to make a short opening statement? It is not compulsory. Then we will go on to questions.
Philip Hollobone (Conservative, Kettering)
Thank you. We have three superb witnesses from Three, O2 and Vodafone. I am now in the hands of Members.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
It is a pleasure to serve under your chairship, Mr Hollobone. I want to start by thanking, as well as the witnesses, the members of the Committee, the officials and the staff of the House, who in coming into Parliament during a pandemic are also taking risks, which we very much regret.Q
I should have mentioned, as an interest, that I spent 20 years working in the telecoms industry within four network operators and vendors, as well as Ofcom, the regulator. I also may know personally some of the witnesses.
Philip Hollobone (Conservative, Kettering)
It sounds like you might be dangerously over-qualified to take part in this Committee.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
You make a very good point, Mr Hollobone. I am going to try to keep my engineering and technical interest as much to the back as possible.
I am the shadow Minister for digital, and I am leading for Labour on this Bill. I will focus on the costs of removing Huawei and the diversification strategy, and Opposition colleagues will be focusing on different areas. I thank you for your presence and expertise. I want to ask two somewhat related questions.
First, some have given estimates of the costs of removing Huawei from your networks, and I want to verify whether those are the most up-to-date estimates. I also want to know whether they include opportunity costs, and the time and resources from your boards and others in your organisations. Are they the full costs, if you like, of the removal of Huawei? How can we minimise the economic impact, in your view? Are there other significant costs associated with the Bill and the implementation of a new security framework?
Secondly, your mobile network procurement is currently made through what I will call full-service providers, such as Huawei, Ericsson and Nokia. They basically design and make a network, and provide it to you—I know it is not quite as simple as that. Do you think the removal of Huawei or the develop of open RAN will change that? Critically, is the Government’s diversification strategy likely to lead to the emergence of significant full-service suppliers that will compete head on with the remaining suppliers, Ericsson and Nokia? If not, what other measures should the Government consider taking? How best can the Government work with partners around the world to achieve their goals? That is quite a lot in two questions.
Philip Hollobone (Conservative, Kettering)
Three Members have indicated that they would like to ask questions. We will take them in the following order: James Sunderland, Miriam Cates and Kevan Jones.
James Sunderland (Conservative, Bracknell)
Gentlemen, good morning. Thank you for coming in. As a military man, you will forgive me for asking a very simple question. Are you satisfied that the framework of this Bill, as it currently stands, satisfies the full requirement for national security, and if not, why notQ ?
Philip Hollobone (Conservative, Kettering)
Thank you. We will come to Miriam Cates next. Then, after Miriam, the order will be Kevan Jones, David Johnston, Christian Matheson, Dean Russell and James Wild.
Miriam Cates (Conservative, Penistone and Stocksbridge)
May I, too, pass on my thanks to the witnesses for appearing before us todayQ ? You have all referred to the significant financial costs to your organisations of removing the equipment from the high-risk vendors, but obviously, given the potential security implications, some are calling for the 2027 deadline to be brought forward. What would be the financial and logistical impacts of bringing forward the deadline on your organisations and your ability to operate? Would that be just too impossible—too difficult?
Philip Hollobone (Conservative, Kettering)
We will come on to Kevan Jones. Now I am getting the hang of this now, I do not think it is fair to always ask Patrick to be the first out of the blocks to answer the questions, so I will try to rotate so that everyone has a chance of going first.
Kevan Jones (Labour, North Durham)
Q What is very clear from the first report from the National Cyber Security Centre is that existing Huawei equipment is a manageable risk. The only things that changed the Government’s stance were US sanctions on semiconductors for future equipment and, added to that, a layer of—I think—lobbying on behalf of certain anti-China parts of the Conservative party to remove the equipment from day one. Personally, I think there is no justification to do that. However, as you said, that leaves you with just two vendors for hardware, and any new entrant would have to meet the conditions in the Bill. What do you think the Government mean by a diversification strategy, and what are the timescales for that?
Having met many of you at a previous Committee and taken evidence from you, it is clear that there is little profit to be made on the hardware side because we all want cheaper phone calls, and you obviously react to customer demand to try to get costs down. What are the realistic prospects of any UK-based company or other vendor coming into the hardware side? On open RAN, I accept that it is for the future, but what timescales are we talking about for that having an impact on how our telecoms networks are organised?
Kevan Jones (Labour, North Durham)
Q So, for the conceivable future, we will be reliant on those two vendors: Nokia and Ericsson.
Kevan Jones (Labour, North Durham)
Q In the near term, it is not going to replace the hardware that we need at the moment, which the two vendors are providing. Are you talking specifically about open RAN, or are you talking about diversification or any strategy to develop a UK hardware supplier?
David Johnston (Conservative, Wantage)
It was widely reported that between 2009 and 2011, Vodafone found back-door vulnerabilities in equipment in Italy, and that you were assured by Huawei that they were being removed. You subsequently found that, in fact, they had not been removed. Do you have any concerns about back-door vulnerabilities in the equipment between now and 2027, and can you give us a sense of your management of that risk and what you do to try to make sure that there are not any?Q
Philip Hollobone (Conservative, Kettering)
I propose drawing this part of our deliberations to a close at 12.30 pm. We have five Members seeking to ask questions. If our panellists keep each of their answers to one minute, we will get everybody in—and we will get all the answers as well. I call Christian Matheson.
Chris Matheson (Labour, City of Chester)
Thank you, Mr Hollobone. In that case, I might take liberties and squeeze two questions into one.Q
Gentlemen, can I assume that you have done an audit—an asset register, if you like—and that you know where all the at-risk equipment is in your networks, so that once the Government push through an order, you know exactly where to go to address the requirements of that order? How interconnected are your networks? Are you as confident as Mr McManus, who says that the integrity is fairly good? Do you all rely on each other to maintain an overall integrity? What if one is insecure ?
Chris Matheson (Labour, City of Chester)
Q So you know where all the dodgy stuff would be, if you were asked to find it.
Dean Russell (Conservative, Watford)
Can you describe in layman’s terms the types of security threats that your organisations face, and how the security framework would address those?Q
Philip Hollobone (Conservative, Kettering)
Gentlemen, we are right up against the clock. We have seven minutes left. Your answers are superb, but they need to be pithy, because we have three sets of questions coming and we need to get the answers in, and I am afraid that 12.30 pm is a hard cut-off; I am not allowed to extend beyond that.
James Wild (Conservative, North West Norfolk)
Hopefully my question has a simple yes-or-no answer. The Bill enables the Secretary of State to issue directions to telcos not to use a designated vendor’s equipment. Does that provide the legal certainty that you need—a direction based on national security—to deal with any contractual issues you might have with those suppliersQ ?
Philip Hollobone (Conservative, Kettering)
Superb—textbook answers.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I ask these questions on behalf of Catherine West. Vodafone runs networks across Europe, and so does Three, whose owner is headquartered in Hong Kong, and O2, which is owned by Telefónica. Does the Bill duplicate or reflect legislation that you have seen elsewhere in your operations? What international comparisons are you aware of? Also, we have talked about standards being a key part of international collaboration. How many people, or what presence, do you have on international standards bodies?
Matt Warman (Conservative, Boston and Skegness)
Q Thank you to all of you for your engagement today and with the Government up to this point. Given the time, I have one, simple question. The Bill is setting up a new telecoms security framework to enhance network security. How confident are you that you will be able to comply with that in full, and what else would you like to see from the Government to enable you to do that?
Philip Hollobone (Conservative, Kettering)
You have 30 seconds, I am afraid, Patrick Binchy.
Philip Hollobone (Conservative, Kettering)
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions. On behalf of the Committee, I thank all our witnesses very much indeed for their evidence this morning.
Philip Hollobone (Conservative, Kettering)
Q We now move on to our second panel, which consists of Howard Watson, chief technology officer, and Alex Towers, group policy and public affairs director, both from BT Group. We have until 1 o’clock for this session. Would our two witnesses please kindly introduce themselves for the record and make a brief opening statement?
Philip Hollobone (Conservative, Kettering)
Lovely. I am now in the hands of Members. I am very happy to give preference to Members who did not ask a question in the previous session. First out of the blocks is Sara Britcliffe.
Sara Britcliffe (Conservative, Hyndburn)
Thank you, Chair. It is just a quick one. What are the most pressing threats facing public telecoms networks, and how does this Bill address them?Q
Philip Hollobone (Conservative, Kettering)
Thank you. The running order is Dean Russell, Miriam Cates, Kevan Jones, Christian Matheson and Chi Onwurah.
Dean Russell (Conservative, Watford)
Q Thank you, Chair. I would like to understand more how the diversification strategy that accompanies this Bill will benefit you as an organisation and the public.
Miriam Cates (Conservative, Penistone and Stocksbridge)
Q You have said in your written evidence that you fully support the objectives of the Bill, to improve security in the networks, but 20 years ago we could not possibly have anticipated the kind of threats that we face today, so it is safe to assume that we cannot perceive the kind of threats that we will face in the future. Do you think that the Bill is wide-ranging and flexible enough for the Government to be able to respond to future threats and, if not, what could be done to make it more future-proof?
Kevan Jones (Labour, North Durham)
Q The debate to date has mainly been around hardware, but you raised the issue—the bigger threat, certainly that I see, is from hacking and the vulnerability there. In terms of diversification, to be honest, we will have two vendors for the next considerable time, so when we talk about the diversification strategy and getting new vendors into the market, what timescales are we looking at? Are we actually putting all our eggs into the open RAN basket? I agree that there is the possibility of advancing that sector in the UK. Realistically, we will have those two, one of which, we know, is financially vulnerable. What difference would having just one vendor make to you?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Thanks very much for joining us. We have heard that open RAN will not be mature for another eight years. Do you agree with that assessment? In that case, as you have outlined, we have two vendors and potential financial concerns about one. Can you say categorically whether it is possible to have network security with only one full-scale vendor to choose from and whether it is possible to have that with two?
Secondly, we heard from Sir Richard Dearlove, the previous head of MI5, that when Huawei was first used as a vendor or equipment supplier by BT, it was not considered worth informing Ministers of that fact, despite what he considered to be evident security concerns. Can you say what in the Bill changes that so that the Government of the day will be better aware of ongoing and future security concerns?
Thirdly, on behalf of Catherine West, on international collaboration, what presence do you have on standards bodies? Can you say what your budget is for research and development so that we can see how that compares with the £250 million on offer?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Do you not think resilience is part of security? Is a network secure if it is not resilient?
Matt Warman (Conservative, Boston and Skegness)
Q Thank you to BT for your engagement thus far. I have two questions. The first is the same question I asked the other operators and is about the telecoms security framework. How confident are you that you will be able to comply with all the strictures in that? Secondly, to develop one of the questions that you have just answered, 2027 is very much a deadline and not a target. It is important that we hear more about your ability to meet that target. How taxing is that? How do you plan to make sure that everything you do can encourage the presence of a third—or more—vendor over the time we have between now and then?
Philip Hollobone (Conservative, Kettering)
Are there any further questions from Members?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I was interested in what you said about the weakest link for networks. I agree wholeheartedly with that. What are your thoughts on fixed networks? While the Government are consulting on fixed networks, apparently they are not minded to require the removal of high-risk vendors from existing fixed networks. You have Huawei in your fibre-to-the-cabinet network. Do you agree with that? Do you think that there is a reduced risk in the existing fixed network? Do you intend to remove high-risk vendors—that is, Huawei—from existing full-fibre build? Do you think that presents a security risk?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Can you say why the risk profile is different for fixed as opposed to mobile?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Finally, with regard to having only two vendors for the mobile network for a number of years, can I ask two questions? I think that there has been a little discussion about resilience versus security, but if you are dependent on two vendors, one goes down and you are dependent on the other, would you say that that network was still secure? And is an increase in prices for equipment likely to accompany the reduction in the number of vendors available?
Philip Hollobone (Conservative, Kettering)
I am afraid you have only about a minute to respond. Which of you gentlemen would like to answer?
Philip Hollobone (Conservative, Kettering)
Gentlemen, I am afraid we have reached the limit of our own bandwidth this morning. That brings us to the end of the time allotted for the Committee to ask questions. I thank both gentlemen for their evidence. The Committee will next meet in this room at 2 o’clock this afternoon to take further evidence. Members will be delighted to know that they will have a far more accomplished and competent Chairman present.
Steve McCabe (Labour, Birmingham, Selly Oak)
Order. We will now hear from Hamish MacLeod, the director of Mobile UK, and Matthew Evans, the director of market programmes at techUK. We have until 2.45 pm for this session, and I will try to alternate as best I can. May I ask the witnesses in turn to introduce themselves for the record?
Steve McCabe (Labour, Birmingham, Selly Oak)
Who would like to have the first question?
James Sunderland (Conservative, Bracknell)
Gentlemen, good afternoon to you and thank you for coming in. A very quick and easy question: how do the challenges of maintaining security in a mobile network differ perhaps from those of a fixed network?Q26
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. Who is next?
Dean Russell (Conservative, Watford)
I would be interested to know whether you agree that strengthening the UK’s telecom security through this Bill is important as we continue to roll out the gigabit connectivityQ .
Steve McCabe (Labour, Birmingham, Selly Oak)
Chi Onwurah, did I detect that you were going to ask questions on behalf of Catherine West?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Thank you, Mr McCabe. I was going to ask on behalf of my colleague, Catherine West, who cannot be here because we have chosen to sit physically rather than remotely. Q [Interruption.] It has been decided that we will sit physically. Her question is about international comparisons. Are you aware of what is happening with other countries’ security frameworks in addressing Huawei and high-risk vendors? Are you aware of any international comparisons?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q So, what are other countries doing that you are aware of?
Miriam Cates (Conservative, Penistone and Stocksbridge)
The Government’s diversification strategy goes alongside the Bill. Obviously, the principle driver of the diversification is security reasons, but it will also open up the networks to smaller operators—I imagine, Matthew, many of your members are much smaller companies. Do you think that it will have a positive effect on the sector, in that sense, and are there any other barriers to entry for the smaller tech companies that you can identify and that could be addressed in the BillQ ?
Kevan Jones (Labour, North Durham)
I think we have heard from the witnesses here now and from other operators that the 2027 deadline is important, in terms of not changing. We hear a lot about diversification, but let us be honest: we are going to have to have two vendors up until 2027 and possibly for a long time after. That is because, regarding the investment decisions taken by mobile phone operators, they are clearly not going to put kit in and then suddenly take it out post-2027. So, being realistic about the diversification strategy, which I support in terms of its ambitions, in practical terms—in terms of influencing what is in our telecoms—it is going to be a long way off yet, is it notQ ?
Kevan Jones (Labour, North Durham)
Q I do not disagree with you in terms of the ambition to invest in open RAN technology, but, realistically, we will have to rip out Huawei hardware and replace it with Nokia or Ericsson equipment. Operators ripping that out just to test something on open RAN is not going to happen, is it? So we are stuck with these two suppliers for a long time yet. There will have to be a business case for open RAN because, if we look back at the history of where we are at with the limited market that we have in hardware—we will not go back to the ancient history of Margaret Thatcher’s silly decision to privatise BT—and if we look at the profitability in terms of hardware, it is not there because we as consumers always want cheaper telecommunications and the companies want to get their costs down. Unless there is a very strong business case for open RAN in terms of deploying that technology, it is not going to happen, is it?
Steve McCabe (Labour, Birmingham, Selly Oak)
Mr Evans, let us go to you first.
Kevan Jones (Labour, North Durham)
Q I do not disagree on that, but let us be honest. Telecommunications is a competitive market. If we want to move to open RAN or make real generational change, the Government will have to intervene quite heavily in the market to change minds. Operators will not do it unless they see a competitive advantage. That is possibly why we have had the situation with the hardware side of it, with China buying into the market by undercutting other people and providing state subsidies, for example. Without support for R&D and actual market intervention, that radical change will not happen quickly.
David Johnston (Conservative, Wantage)
I think we all support diversification in principle, but what does success look like for the two of you? How many companies would it be? We have only two vendors that we can choose from at the moment, so how many do you think is acceptable? Is there an analogous comparison for you, whether in tech or elsewhere, of the much broader choice that we should be aiming for, and how long do you think it will take to get there?Q
Steve McCabe (Labour, Birmingham, Selly Oak)
Do you have anything to add, Mr Evans?
David Johnston (Conservative, Wantage)
Q So you do not want to put a number on it, but is there another sector that you would draw a comparison with that does not have this problem and is, in principle, the sort of thing we should be aiming for here?
Steve McCabe (Labour, Birmingham, Selly Oak)
Anything to add, Mr Evans?
Chris Matheson (Labour, City of Chester)
I want to follow up the point that Mr Jones and Mr Johnston made. The Government are requiring the industry to make these changes for all the reasons that we understand. We are hoping for diversification across the sector to provide innovation. What would the industry be looking for from the Government to assist that and drive it forward? Mr Jones talked about the role of the Government in assisting that. How could they best assist that?Q
Steve McCabe (Labour, Birmingham, Selly Oak)
Mr MacLeod, do you have anything to add?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. I am going to switch to the Minister and shadow Minister. If there is time left, I will come back to other Members, but I want to be sure that we do this fairly. I call Chi Onwurah.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Thank you, Mr McCabe, and I thank our witnesses for joining us. I started out in telecoms in 1987, as a hardware engineer. Since then, as you have indicated, our hardware sector in telecoms has disappeared. Hamish, you have talked about the equivalence with the computer sector, which has experienced a similar demise over the past 40 years. I am interested in whether it is possible to have a secure telecoms supply chain without having secure hardware. What are your views on that? The draft vendor designation talks a lot about the geopolitical influence of China rather than about the technical requirements, and that would be as true for hardware as it is for software. Do you think it is possible to have secure supply chains without having sovereign or friendly hardware capability?
I am also really interested in what you said, Mr Evans, with regard to research and development. I absolutely agree with you that we clearly need investment in research and development if we are to lead in hardware and in open RAN and software. You said that the £250 million was focused on R&D, but it is actually focused on testing. It does not really do much for research at all, as far as I can see. You also referred to the diversification strategy as a strategy and not a plan, so do we need investment in research and development? Is the £250 million, which I think—I am looking at the Minister now—is over five years, a significant amount of investment in research and development for the mobile sector and tech sector generally?
Finally, the Bill gives the Secretary the State a huge amount of powers to set out requirements to remove vendors and for Ofcom to inspect what operators are doing. Do you think that might have an impact on international foreign investment in the UK telecoms sector, and are you confident that the right sort of technical, security and democratic scrutiny is in place? That is three things: hardware, research and development, and scrutiny.
Steve McCabe (Labour, Birmingham, Selly Oak)
Shall we start with you, Mr MacLeod?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q To clarify that point, you are happy with the existing level of scrutiny and involvement of the security services in the development of the framework and the review of the telecoms supply chain, and so on, and you would like to see that continued. When it comes to investment, could you say a little bit about the £250 million over five years, which is, say, £50 million a year? Is that a significant amount of research and development investment in the tech sector in this country?
Steve McCabe (Labour, Birmingham, Selly Oak)
Do you have anything you want to add, Mr MacLeod?
Steve McCabe (Labour, Birmingham, Selly Oak)
I will switch to the Minister at this point.
Matt Warman (Conservative, Boston and Skegness)
Thank you, Mr McCabe, and thank you both for your engagement and for welcoming what we are doing. I am interested to know what you feel will be the best way to work with the sectors that you represent, particularly in taking forward the diversification strategy. It is an increasingly diverse sector. The Government want to get the best they possibly can out of that £250 million initial tranche of diversification money. What are your thoughts on how we have worked with the sector thus far and what more should be going on in the futureQ ?
Steve McCabe (Labour, Birmingham, Selly Oak)
Chi?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I did not think I would get a chance to ask further questions.
I respect your reluctance, if you like, to voice criticisms at this stage, but can I just get a further idea on the level of R&D spend in the sector? We heard from British Telecom this morning that it spends £500 million a year. I imagine it is not the only company to spend. Do you have a view of the level of R&D spend? You talk about the £250 million being a signal. Am I right in thinking that a lot more investment needs to be attracted into the UK telecoms sector in order to really move the dial? That is what we are talking about, is it not—really moving the dial on UK telecoms capability?
Steve McCabe (Labour, Birmingham, Selly Oak)
Does anyone else have any other questions? No. In that case, I thank both our witnesses for their evidence. We are extremely grateful to you. We will end this session and move on to the next panel.
Steve McCabe (Labour, Birmingham, Selly Oak)
We are now going to hear from Stefano Cantarelli, global chief marketing officer, John Baker, head of RAN business development, and Pardeep Kohli, chief executive officer, of Mavenir. Joining them is Chris Jackson, president and chief executive officer of NEC Europe Ltd. We will use the same format as last time, although if you want to direct your question to a specific witness, that might be helpful. We have until 3.30 pm for this session. I ask the witnesses to introduce themselves.
Steve McCabe (Labour, Birmingham, Selly Oak)
Who wants to go first? It looks like it is Mr Johnston. Can I just ask you to say which of the witnesses you are directing your question to?
David Johnston (Conservative, Wantage)
Yes, although I was going to ask them who they think is best to answer it.
Steve McCabe (Labour, Birmingham, Selly Oak)
There is always one.
David Johnston (Conservative, Wantage)
Q We asked the previous witnesses this question. When it comes to stringency on these issues, do any of you feel able to give us a sense of the international comparison between the regime that this Bill creates and regimes around the world?
Kevan Jones (Labour, North Durham)
Q This question is to whoever wants to pick it up. The debate in the UK on Huawei has been around hardware, and clearly open RAN is the future. Can you give an indication of two things? First, what are the timescales for its development and deployment? Secondly, because we have got operators currently taking out Huawei kit and putting in Ericsson or Nokia kit, how do you incentivise those companies to take the open RAN approach in terms of developing a market for that product? Where are we at internationally on open RAN compared with other countries?
Kevan Jones (Labour, North Durham)
Q Which country in the world is at the forefront of open RAN deployment?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am just conscious of time; do any of the other witnesses have anything they want to add to what we have heard from Mr Kohli?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. I am going to Mr Sunderland. I will come back to you if you want to come back later.
James Sunderland (Conservative, Bracknell)
Q I note from the briefing notes that I have here just how much global experience Mavenir has, and that perhaps sets you gentlemen apart from the previous witnesses. Could I therefore ask you this, please? Is there anything, in your experience in this field—particularly, perhaps, in America and the far east—that may require to be better reflected in the legislation?
Steve McCabe (Labour, Birmingham, Selly Oak)
Is this question for all the witnesses?
James Sunderland (Conservative, Bracknell)
Yes, please.
Steve McCabe (Labour, Birmingham, Selly Oak)
Who do you want to go first?
James Sunderland (Conservative, Bracknell)
Mr Baker is the obvious candidate.
Steve McCabe (Labour, Birmingham, Selly Oak)
Anyone else?
Steve McCabe (Labour, Birmingham, Selly Oak)
What about Mr Jackson or Mr Kohli? Do you have anything to add to that?
Steve McCabe (Labour, Birmingham, Selly Oak)
Do we have any Catherine West questions in this round?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Catherine is always interested to understand what international comparisons there are, but I think that that has already been addressed, so thank you; she will be grateful to you.
Steve McCabe (Labour, Birmingham, Selly Oak)
In that case, let us go to Miriam Cates, please.
Miriam Cates (Conservative, Penistone and Stocksbridge)
Q This is a question for Chris from NEC. I think that you have partially answered it already, so do not feel that you have to repeat what has already been said. It appears to me that, if the open RAN trial is successful and the open RAN technology is adopted, it has the potential to significantly disrupt the telecoms market in a way similar to how APIs have disrupted the software market. First, how do you think that it will change the shape of the industry over the medium to long term? And secondly, what experience and capabilities does NEC have that give you the confidence that you will be able to run this trial and it will be successful?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Do any of the rest of you have anything to add to that?
Steve McCabe (Labour, Birmingham, Selly Oak)
Who is next? If there are no pressing answers, I will go to the shadow Minister.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Thank you for joining us today. Having read your bios, I am impressed by the breadth, geographic as well as technical and operational, of your experience. To make this concrete for me and others, let us say we had a new mobile network operator in the UK tomorrow. Could you—I will ask someone to answer on behalf of Mavenir and someone on behalf of NEC—provide a 2G, 3G, 4G, 5G network tomorrow, or in 12 months? As a software network, what physical boxes or hardware would it be running on? As part of that, what UK or other providers would be in your supply chain?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Sorry—say that again. I could not hear that. What is the rest of it?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
It is computing—it is processors.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Who builds the radios?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q So you couldn’t provide a network tomorrow, but you could provide a network in how long—a 2, 3, 4 or 5G network?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q And NEC?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q And who are those other vendors? Are they UK, Europe or US-based?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q You seem to be saying, then, that you are in a position to compete with Nokia and Ericsson as of today. Is that what you are saying?
Matt Warman (Conservative, Boston and Skegness)
Q Again, I thank both NEC and Mavenir for the productive conversations that we have had already about getting involved in UK networks. Obviously, one of the things that was in the diversification strategy is the project with NEC—the NeutrORAN project that we have talked about a little bit today already; and I hope we could do, if possible, something similar in the future with Mavenir. What is striking about the NEC project—it is genuinely significant for UK networks —is that it is a £1.6 million initial jolt of funding. First, Chris—but I am very interested in Mavenir’s perspective as well—will you say a little about how Government can best target the funding? One of the things that we learnt in our previous discussions with you was that this is not solely about the scale of the funding but about the targeting, the way in which we do it and how we get the best value for taxpayers. Chris, will you say a little about that, then we can hear from Mavenir about what the equivalent sort of things might be?
Matt Warman (Conservative, Boston and Skegness)
Q Finally, would you agree that there are plenty of opportunities for us to use those trials and test beds to boost British companies, particularly in software, around open RAN? That is probably where British firms are likely to focus, at least in the first instance, rather than hardware.
Matt Warman (Conservative, Boston and Skegness)
Thank you.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I wholeheartedly agree with that last comment about the importance of competition, particularly in the supply chain. That is my experience as well, in terms of building out networks. I am just struggling to understand why Vodafone, Three and O2 said earlier that there were only two full-service suppliers in the UK, when Mavenir is saying to me that you could supply a 2G, 3G, 4G or 5G network within a year. I am struggling to understand how that works. Is it a question of the network operators not being prepared to commission you? Is it an issue of price, complexity or management? Why are you not considered a full supplier by the existing network operators in the UK?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q That is very helpful. I think you said that a site would connect not with fibre, but with something else.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q That is really helpful. What you are saying is that although you could deliver a full-service 2G, 3G, 4G or 5G network tomorrow, that is not what our mobile operators want. They want an incremental improvement from what they have to what they need to provide services. The cost is a real issue. The transition from 4G to 5G/open RAN is part of the challenge, and we need to understand better how the Government can support that. You talked about making it easier to roll out new open RAN sites. I am interested to know whether there are other ways in which the Government could support that.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Thank you. That is very helpful. That makes me think that there are security issues arising from, for example, having our cloud infrastructure dominated by one vendor, such as Amazon Web Services. Those are perhaps future security issues that we need to look at. I now understand much better what you need to support your transition, so thank you very much for that.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Do any of the witnesses have any final points that they want to make?
Steve McCabe (Labour, Birmingham, Selly Oak)
If there are no further questions, it remains for me to thank all our witnesses. We are extremely grateful to you.
Steve McCabe (Labour, Birmingham, Selly Oak)
We will now hear from Julius Robson, who is the chief strategy officer of the Small Cell Forum, and Dr Louise Bennett, who is the director of the Digital Policy Alliance, and we have until 4.15 pm for this session. May I ask the witnesses to introduce themselves for the record? Julius, could we start with you?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. Dr Bennett?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you very much. Okay, who wants to go first?
Steve McCabe (Labour, Birmingham, Selly Oak)
I think it is possibly better if I get one of the Members to put a question to you first. David.
David Johnston (Conservative, Wantage)
Q That was a helpful teaser of what you think about this legislation. Could you expand on exactly why you have that view on what you see as the inadequacies?
Steve McCabe (Labour, Birmingham, Selly Oak)
I think that is primarily to Dr Bennett.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q I will interrupt you there for a second, but I will come back to you. Mr Robson, do you have anything you want to add?
David Johnston (Conservative, Wantage)
Q Just to be clear, is your critique of this legislation that you feel that something is missing from it? Or, given that you think breaches are a case of “when” rather than “if”, which I am happy to accept, is your critique that no one piece of legislation could totally protect us from this, and that it is about what the whole sector is doing to keep us secure?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am just going to interrupt you there, because I am conscious of time and a couple of Members are indicating that they want to come in. I call Christian Matheson.
Chris Matheson (Labour, City of Chester)
Q Thank you, Mr McCabe. I want to follow on directly from the answer that was given to Mr Johnston. This morning, I asked some of the larger mobile firms whether they had done a proper audit, they had an asset register and, when the orders came through from the Government, they knew exactly what to take out and where it was. Those were the largest mobile firms. They all expressed confidence that they did. Dr Bennett, are you suggesting that at that top level we should be querying that confidence a little bit? Perhaps you are suggesting that that confidence should not be taken as read, as we flow down through the rest of the sector from the top level.
Chris Matheson (Labour, City of Chester)
Q Should there be some form of external audit of asset registers?
Chris Matheson (Labour, City of Chester)
Q And who should do that external auditing?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. Mr Robson, do you want to add anything to that?
James Sunderland (Conservative, Bracknell)
Q Dr Bennett and Mr Robson, thank you for coming in. I have listened intently to what you have said, and it is fascinating. May I offer an alternative view? First, the Bill itself creates new powers for the Secretary of State to make regulations. Section 105A is a duty to take proportionate measures, to identify and reduce risks. Section 105B is a power to make regulations imposing duties. Section 105C is a duty to take appropriate and proportionate measures in response to compromises. Section 105D provides for powers to respond to a compromise itself. The Bill is all about giving the Secretary of State powers to do things; it is not a panacea. So may I ask you to comment on two things? First, what you have referred to this afternoon is valid, but it will be covered in secondary legislation or in powers taken by the Secretary of State after the primary legislation has gone through. Secondly, the Bill should be seen for the framework that it is, and not as a panacea, which it is not.
Steve McCabe (Labour, Birmingham, Selly Oak)
Who wants to go first? Dr Bennett, I think that was mostly directed at you.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q Mr Robson, what is your take on Mr Sunderland’s alternate view that this is a framework and it will be all right in the end?
Steve McCabe (Labour, Birmingham, Selly Oak)
Do you want to come back, Mr Sunderland?
James Sunderland (Conservative, Bracknell)
No. Thank you for the answers.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I am the shadow Minister for the Bill. Let me start by welcoming you and thanking you very much for your expert input. I particularly welcome you, Dr Bennett, for your expertise and the fact that you are the only female witness we have today—it is clear to me, as someone who worked in engineering for 20 years, that the sector’s gender balance has not improved. I hope that Parliament can do more to ensure more balance in witnesses in future.
I have questions for both of you, but let me start with Dr Bennett. I was impressed by your structured list of things that are missing from the Bill, because we are here to scrutinise the Bill and see how we can improve it. I think you talked about the breadth of the security challenge and how this Bill, as it stands, might not meet the full breadth of it. You had four areas, and I think you have run through two of them in more detail. Could I ask you to summarise again the areas that you think are missing? In particular, could you talk a little bit more about the need for improved scrutiny? Could you just summarise that and then go into more detail on the ones where you have not yet?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q To follow up briefly on that, I think what you are saying is that there might be a contradiction between the desire to have a more diverse supply chain, with more smaller players, and increased regulatory and other costs in this. With regard to network architecture and data flows, you make a very good point: we have been concerned about high-risk vendors, designated vendors and so on, but that will not address the issue of securing data flows. Do you have any thoughts, and are you suggesting that more thought needs to be put into that aspect of network security?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
A very good point.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q I just want to check if Mr Robson has got anything he wants to add at this stage.
Steve McCabe (Labour, Birmingham, Selly Oak)
I am just going to go to the Minister; if there is time, I will come back. Minister.
Matt Warman (Conservative, Boston and Skegness)
Q Thank you both for what has been a really interesting discussion. I wanted to ask, partly because you mentioned it specifically: when it comes to looking at other parts of the network, such as the internet of things, are you aware of the work that we have been doing—for instance, in October we published work specifically on regulating smart devices—and do you see that sort of work as being complementary to the kind of work that we are talking about here today in relation to the Bill? Perhaps once you have dealt with that, we can deal with the Bill itself.
Matt Warman (Conservative, Boston and Skegness)
Q In saying that, it seems to me that it supports the point of view expressed earlier, that this piece of legislation should not be expected to do everything. It is part of a broader Government response. You laid out a lot about what you think a secure network looks like and what its characteristics might be. They are not controversial in themselves. The point of debate seems simply to be whether those are for a regulator to define and be able to update on a regular basis, because we need to able to respond, or whether they should be on the face of the Bill.
I would have expected you to say, if I can put words in your mouth, that you would like the agility of the regulator’s ability to update those codes of practice, to be able to say to networks, “This is what secure looks like. If you are complying with these kinds of codes of practice, then we will be able to understand that you are meeting the requirement.” You seem to actually be saying that you want greater rigidity. I am interested to understand whether you would like the codes of practice to have the flexibility offered by the writing from the regulator or whether you would like to see them on the face of the Bill.
Matt Warman (Conservative, Boston and Skegness)
Q I suppose, in a sense, you are already seeing some of that, are you not, with us already publishing the draft designations, the draft directions and some of the secondary legislation that would be enabled by this Bill? I think you are arguing for as much transparency as possible, of the sort that you have already seen from the extensive NCSC blogs on what the standards might look like. I do struggle to see how you would put that on to a statutory footing in the way that you have described without constraining some of the agility. Fundamentally, however, your argument seems to be in favour of transparency above all else.
Steve McCabe (Labour, Birmingham, Selly Oak)
Chi, we have time for another quick question. I think you had a point that you wanted to come back to.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I did have a question. I also wanted to say that I think Dr Bennett’s point is about transparency, but also about anticipation, responsiveness and a fast response regime. My question is to Mr Robson. You are the Small Cell Forum and you have put a big emphasis on diversity in the supply chain. I think you said—I do not want to put words in your mouth—that security requires diversity in the supply chain. You represent potential small providers. Is there anything that the diversification strategy needs to do that it does not do to better support the entry of smaller players?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I would be interested to hear more about what is out of scope, because my understanding was that the Bill covered all aspects of telecoms security.
Steve McCabe (Labour, Birmingham, Selly Oak)
Looking around the room, I think that is it. In that case, I thank Dr Bennett and Mr Robson for their evidence. We are extremely grateful to you. Thank you both very much indeed. That brings this session to a close.
Steve McCabe (Labour, Birmingham, Selly Oak)
We now move to the sixth and final panel of the day, which consists of Dr Scott Steedman CBE, who is the director of standards for the British Standards Institution, and Charles Parton from the Royal United Services Institute. We have until 4.45 pm for this session. Again, I ask the witnesses to introduce themselves for the record. May we start with Dr Steedman, please?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. Mr Parton?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you both, gentlemen. Let us start.
Dean Russell (Conservative, Watford)
Q Many years ago, I used to work in communications and did some work with Huawei as a client. I remember, 10 or 11 years ago, someone told me that about 80% of all electronic communications go through some form of Huawei technology across Europe. I do not know how true that was, or whether it was inflated, but I am interested to understand from your perspective, given the impact of the Bill, how you see what it proposes compared with what is being done in other countries, in particular looking at comparable countries such as our Five Eyes partners.
Chris Matheson (Labour, City of Chester)
Q First to Mr Parton, we talk about Huawei, but is it the case that it is not Huawei but the Chinese state or the Chinese Communist party trading as Huawei? All the focus is on Huawei at the moment, but are there any similar companies, or front companies, that the Bill might have to cover in future? Bearing in mind the view that the Bill can help with diversification among trusted partners in the UK, how did Huawei get into such a dominant position globally? What can we do, perhaps in legislative terms within the framework of this Bill, to avoid that in the future?
Chris Matheson (Labour, City of Chester)
Q How did they manage that dominant position, and what lessons are there to be learned from that, either in stopping other companies from getting that dominant position or in helping us to diversify?
Steve McCabe (Labour, Birmingham, Selly Oak)
I think I might interrupt you there, because we have only until 4.45 pm. I would really like to bring in Mr Sunderland, the Minister and the shadow Minister, so we need very tight questions and very succinct answers.
James Sunderland (Conservative, Bracknell)
Q Gentlemen, I have been a massive fan of RUSI for many years, and clearly I am a recent convert to the British Standards Institute, so thank you for coming in. I have two quick questions, which should be quite straightforward.
Steve McCabe (Labour, Birmingham, Selly Oak)
One quick question, I think. Seriously.
James Sunderland (Conservative, Bracknell)
The important question from me is: what will be the reaction to the Bill within the Five Eyes community?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. I see Dr Steedman nodding assent.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Can I just say that I had been a fan of the British Standards Institute for decades and am a more recent convert to RUSI?
I start with a question to Mr Parton on behalf of Catherine West, which relates to the last point you made. As we know, the Government were moved to ban Huawei entirely from the network following US sanctions instigated by President Trump. What changes do you see the Biden Administration having on the US’s outlook on China, if any? Can you also squeeze in a reference to Chinese influence on academic research and development in this country? Then I have another question for Dr Steedman, which I will ask afterwards, if I may.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
As I said, I am a massive fan of standards development. I have worked in the area, with the ITU. I agree that it is essential to enable open RAN and diversification. The Government have said that standards are driven by vendors. We heard this morning from the network operators that their standards presence was driven by their headquarters—their owners. We do not have a UK vendor. When you say that we need to improve our presence in standards bodies, who is going to do that and how is it going to be funded?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am going to interrupt you. I am sorry, but I want to let the Minister get a last question in. My apologies.
Matt Warman (Conservative, Boston and Skegness)
Q Thank you, Mr McCabe, although Dr Steedman was articulating some of the answers to the question that I am going to ask. Dr Steedman, the diversification strategy, as you described, lays out the importance of our work in international bodies and in international co-operation. Could you lay out what you think the most influential bodies are and where the Government should be focusing there? And Mr Parton, could you talk about how you see this Bill fitting together with the National Security and Investment Bill, to try to tackle some of the issues that you described yourself a few moments ago?
Matt Warman (Conservative, Boston and Skegness)
Q Mr Parton, will you comment briefly on the co-ordination between the NS&I Bill and this Bill in a more wide-ranging response to the Chinese situation?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am afraid that brings the time for this witness session to a close. I think that we could all have done with a bit longer with both of you gentlemen, but thank you very much for your evidence. We are extremely grateful to you. That brings the formal part of the proceedings to a close.