Digital Economy Bill

Written evidence submitted by the City Remembrancer’s Office, City of London Corporation (DEB 62)

DIGITAL ECONOMY BILL

House of Commons

Public Bill Committee

1. The City of London Corporation is an advocate for the City, London and the UK as a global hub for financial and professional services. The City owns commercial and residential property and provides a free service which provides national and international businesses with help to locate and occupy premises as well as advice on planning and infrastructure matters. The City also provides local authority services within the Square Mile.

2. As frequently stated by former Minister Ed Vaizey, current Minister Matt Hancock and the Prime Minister in her speech to the Conservative Party Conference, digital connectivity is essential for all businesses and should be treated as a utility. Independent statistics support these assertions, with for example in 2012 the OECD finding that 89.2% of UK businesses used broadband [1] .

3. One of the main obstacles to providing connectivity for businesses is the time taken to install digital infrastructure. To overcome this problem the City of London led a group including the City of London Law Society, all leading telecoms operators, major landlords, developers and professional associations such as RICS and INCA, to create a standardised ‘Toolkit’ designed to be used in each case where a wayleave is required to access private land in an urban area. The Toolkit can be found here [2] . The Toolkit tackles connection times for fixed line infrastructure. Other initiatives such as the connectivity rating scheme developed by WiredScore [3] also help in this area.

4. It is important that the Bill encourages better connectivity through all forms of technology. It is necessary to consider wireless technology such as satellite and wimax solutions as well as building on the excellent speeds available over mobile.

Universal Broadband Service Obligation (USO)

5. According to the House of Commons Library [4] , London ranks 26th out of 33 European captials measured by download speed. The well-respected Akamai’s ‘State of the Internet’ report for the second quarter of 2016 [5] records that the UK is ranked 20th globally in terms of average connection speeds, behind Romania, Bulgaria and Belgium. The evidence is clear that connection speeds in London and across the UK are poor.

6. The OEDC’s report ‘Digital Economy Outlook 2015’ [6] highlights the importance of digital infrastructure as a "foundation" for business and commerce and describes telecommunications infrastructure as the most important "key pillar of national digital economy strategies" [7] .

7. In this context, a USO which sets an ambitious target for connection speeds across the UK should be welcomed but has been criticised as lacking ambition [8] . It seems likely that the USO of 10mbps by 2020 will be achieved but, as the IoD has explained, this is because the target is excessively limited and much of the country already achieves speeds in the region of 10mbps. In a sector where policy moves slowly yet demands change rapidly, a series of targets within the USO would help to future proof the UK’s digital infrastructure. By way of example, a target of 10mbps by 2020 could be followed by 50mpbs by 2030.

8. Importantly, a USO should set a speed for upload and download speeds. Whether used to submit complex forms to the Government’s online portal, gov.uk, or to send digital media to a commercial client, upload speeds are a crucial component of the connectivity needs of business. A recent survey of business use of the internet provides evidence of the significance of upload speeds with 45% of businesses identifying upload speeds as important [9] .

9. If the Government’s definition of superfast broadband is to be used as a way of gauging the roll out of superfast connectivity around then UK, it should be defined as more than 24Mbps. However, this speed measurement dates from 2013 and is reflective of older technology, whereas the Bill needs to focus on the roll out of new technology to provide superfast speeds.

Service Quality

10. A USO is the first substantive step towards bringing broadband within the same regime as other utilities. In this context, one approach that the regulator, Ofcom, might take would be to treat telecoms operators in the same way as other regulators treat the utilities they regulate. The Bill could require Ofcom to introduce a regulatory framework under which the timely delivery of connections is measured and regulated. This links, by a parity of treatment, to the regulatory obligation on other utilities that users are connected within a reasonable time.

Planning

11. The changes made to the General Permitted Development Order (GPDO), that allowed the siting of poles and cabinets to enable superfast broadband roll out, are subject to a sunset clause. The Bill proposes to make that change permanent so that equipment would always be within the scope of the GPDO. While in principle making this change permanent should help the rollout of broadband connectivity, the danger is that operators will deploy out-dated technology. One way that the Bill could mitigate the risk of this happening would be to create a requirement that the GPDO powers would be available only when an operator proposes to use the latest superfast technology in the pole or cabinet. The details of the minimum requirements for the technology could be set by Ofcom.

Electronic Communications Code

12. The Bill proposes changes to the Electronic Communications Code (ECC) which, while relevant to fixed line connections, has most impact on mobile digital communications infrastructure. It is helpful that the proposed Code clarifies that the Code should not overlap with the 1954 Act.

13. Landowners regularly balance the advantage of deriving an income from unused parts of their buildings with the difficulty of removing that apparatus once installed. While mobile operators point to the undoubted existing powers of removal it is clear that many investors - including very large institutional investors and asset managers - will not purchase property where telecommunications equipment has been installed. Land owners cite the problems of mobile equipment preventing potential refurbishment/redevelopment of properties. Without a change in the scheme, the Government’s objective of increasing mobile coverage is likely to fail.

14. Commercial property relationships are, for the most part, governed by the Landlord and Tenant Act 1954. The features and operation of the 1954 Act are well known to landlords, agents and commercial tenants. The main concern is that property owners and operators should be able to contract out of the Code (comparable to the ability to contract out of the security of tenure provisions in the 1954 Act). Such policies would help to encourage landlords to allow mobile apparatus on their premises and give operators certainty that their tenure is protected. It seems unlikely that one side would be prejudiced over the other in this regard – both landowners and operators are sophisticated. Overall, permitting contracting out is likely to result in greater willingness on the part of landlords to host apparatus on their properties.

15. The Code should also regulate situations where operators share equipment with each other. When operators share, they tend to create new Code rights that affect the landowner. At present, however, operators may share equipment without notifying the landowner. This adds further weight to landowners’ general reluctance to allow mobile equipment onto their premises.

October 2016

 

Prepared 21st October 2016