Product Security and Telecommunications Infrastructure Bill

Written evidence submitted by the Littlehampton Sportsfield Charitable Trust (PSTIB07)

Product Security and Telecommunications Infrastructure Bill

The Littlehampton Sportsfield is a charitable trust providing sporting facilities for over 700 local residents.   It barely balances it books.    The Sportsfield has a lease with Cornerstone for the siting of a Vodafone aerial on the southern boundary and this earns the Sportsfield an annual rental of £5,600.   There is a worrying threat that is facing all landowners who host phone masts.   The telecom giants are threatening to cut rents by as much as 90% and this will affect sports clubs, farmers, charities, churches, hospitals and community groups across the country, who will face a huge drop in income because of a change in the law.   And that could threaten the support and services they provide to people who rely on them.    Telecoms companies have used rights handed to them in the 2017 Electronic Communications Code to cut funds just as groups like this already face hardship.   Former Labour MP Anna Turley, the chair of the Protect and Connect campaign, has said: "The proposed changes to the Code are set to have a devastating effect on a whole range of small business owners, farmers and organisations essential to the UK's communities.   And the latest legislative plans will cost the economy £3.5billion by 2022 and cost small landowners an extra £50million per year on top of the £209million the existing changes to the Code have already cost them.   What's more, research shows they will slow down the UK's 5G rollout, with up to nine million people missing out on superfast connections next year alone.   We cannot let the multibillion-pound mobile phone operators profit off the back of our communities while failing to deliver on their empty 5G promises."

But the thousands of small land and property owners – including farmers, charities, churches and community groups – who lease their land to telecoms companies, should get a fair deal for playing their part.   But the telecoms companies are trying to force through huge rent reductions on land and property owners – in some cases by over 90%.   And they are now trying to change the law to further erode the limited safeguards land and property owners have under the current law, and make it easier to pursue them through the courts.   Not only is this behaviour unfair – it will actually slow down, not speed up, the roll-out of faster internet – with far fewer land and property owners set to sign up and help in the face of such unfair treatment.

​In short, anyone who has telecommunications infrastructure on their land now, or may acquire it in the future is directly affected by the Code.   The Code also affects anyone who has an interest in the UK receiving world-beating digital connectivity. If the next generation of digital infrastructure is delayed by unnecessary disputes over equipment sites, ultimately it will be the consumer that suffers when they cannot get 5G.    Rents are being cut due to a revised valuation methodology which offers land and property owners money based on the minimal alternative use value of the land rather than the total value of the telecommunications property, which is often far greater. In rural areas, this means agricultural land prices.

The government has suggested that the ‘savings’ Operators make on the rental payments will be reinvested in new networks and consumer benefits - but instead, unscrupulous operators are keeping the profits for themselves.   In the UK, as well as across Europe, traditional telecoms companies are selling their masts and other infrastructure to third parties for large capital sums. To maximise those sums, the operators are looking to push down the rents they pay to property owners as much as possible. The traditional telecoms companies will then enter into long term service agreements with the third party at levels far in excess of the original rent charged by the property owner.   This process is designed to increase profit margins not to increase connectivity.

So where is this money going, and for what?   Telecommunication companies have already received substantial public subsidies to help them meet the cost of building infrastructure in poorly served parts of the country, including £500m for rural broadband. Handing them yet another subsidy in the form of reduced rents without securing a guarantee the money saved will be invested in 5G is astonishing.   Now the lobbying power of the mobile phone operators means that ministers are about to give them yet more power. New proposals to change the code and the potential forthcoming Product Security and Telecommunications Infrastructure Bill will allow telecoms companies to backdate rent reductions retrospectively to when contract negotiations began. How will the very many ordinary people, sports facilities, councils, hospitals and charities affected afford to fight that? And who would host a new mast now? 

It is not too late for the government to change course and explore options for valuing land fairly and stop trying to fix a market that wasn’t broken.   If they don’t, the current dysfunction guarantees it will never work, the cost to the economy will be vast, and fast 5G will remain out of reach for millions of us.

The Sportsfield Charitable Trust cannot afford to lose this level of income and will not be able to recover the loss without a severe reduction in standards.

Hugh Milner - General Manager

March 2022

 

Prepared 16th March 2022