Digital Economy Bill

Written evidence submitted by the British Property Federation (DEB 52)

Digital Economy Bill submission to the Public Bill Committee

The BPF represents the commercial real estate sector – an industry with a market value of £1,662bn which contributed more than £94bn to the economy in 2014. We promote the interests of those with a stake in the UK built environment, and our membership comprises a broad range of owners, managers and developers of real estate as well as those who support them. Their investments help drive the UK's economic success, provide essential infrastructure, and create great places where people can live, work and relax.

Background and position – the Electronic Communications Code

1. The Electronic Communications Code (the ‘Code’) enables electronic communications network providers to construct electronic communications networks. The Code enables these providers to construct infrastructure on public or private land. The current Code is a complex, technical piece of legislation severely in need of an update and, as such, we support the implementation of an updated Code.

2. We have been particularly supportive of the following changes:

· The new ability to take a new Code court case to Tribunal instead of just the county court.

· The ability to enter into authorised guarantee agreements [AGAs] with the main Code operator helps track who is on the site for cases where the main operator assigns Code rights to other operators.

· The new provision allowing the removal of a site operator if the landlord intends to redevelop all or part of the land to which the Code agreement relates.

3. However, we are worried that the new Code does not address the concerns that we have raised. For the guaranteed efficacy of the new Code, particularly in urban environments, these concerns need to be addressed in order promote partnership between digital infrastructure providers and landlords.

4. The BPF’s concerns regarding the new Code have been as follows:

· the new Code is inconsistent with the Landlord and Tenant Act 1954 [L&TA]; for instance, an 18 month notice period is required to end an agreement, compared to the 12 months set out in the L&TA to end a lease.

· There are new rights for providers to update equipment without permission, and also to share – effectively sublet – a site with other providers without the consent of the property owner with no compensation for the landlord.

· It will not be possible to contract out of much of the new Code, including provisions relating to our other concerns above and below.

· Government has decided to amend the basis of market valuation for a site so that the valuation only reflects the value of the site to the operator.

5. All of these points link to a key factor - landlords highly value control over their properties. The need for control can be for many reasons, varying from being able to respond quickly and effectively to a tenant’s needs or the need to retain flexibility in order to retrofit for new sustainability provisions. Without an in-built flexibility into the landlord’s negotiating position with operators, many will simply refuse to entertain the prospect of a Code deal, especially given the limited financial returns a Code deal now offers.

6. Our asks have been couched in our overall view of digital connectivity, that better mobile signal and broadband speeds are achieved through a free market. This view is illustrated through our endorsements of initiatives for similar challenges. We have endorsed Wiredscore, who provide a free market solution to broadband connectivity by providing a service that rates broadband connection speeds in buildings, and the City of London’s standard template for fixed line wayleaves, which is designed to speed up the access agreements required to get digital infrastructure connected to buildings. These solutions focus on improving relationships between landlords and operators through common agreement or by incentivising the deployment of digital infrastructure. Both of these projects have been met by both the landlord and operator communities alike with support.

Where we are

7. The Code on the other hand takes a different direction than the aforementioned initiatives, choosing a solution which forces landlords to receive less remuneration for less control of their premises. All of this means that property owners will be less likely to enter into voluntary agreements as the proposed Code stands, meaning that:

· less new infrastructure will be delivered where it is needed the most, and;

· the relationship between electronic communication providers and property owners will move away from a framework agreed by consent to one that has to be enforced by the courts.

8. We recommend that a more amenable approach to the Code that allows for landlords to retain more control of their premises as laid out in our key concerns is more likely to speed up the roll-out of digital infrastructure than the current Code does.

October 2016

 

Prepared 19th October 2016