The new ‘Digital Economy’ will move a step closer in June, affecting land and property owners. That’s when the Digital Economy Bill is due to receive Royal Assent and pass into law a few months later – a move that heralds big changes for land and property owners and the telecoms industry.
With so much uncertainty for all parties, what are the facts regarding the bill? How will current arrangements change? And what reaction, if any, should we expect from land owners and operators?
The bill aims to realise the government’s long-stated ambition for widespread fibre optic broadband coverage, or superfast broadband, an area where the UK is falling behind other countries, damaging its competitiveness.
The Chancellor, Philip Hammond MP, announced several improvements for broadband connectivity in the United Kingdom in his first full budget last month, including boosts for 5G Mobile and another &200m for “full-fibre” (FTTH/P) networks. He also pledged last autumn to provide a new &1 billion Infrastructure Fund and work with operators to ensure 98% of the country is covered by superfast broadband by 2019.
The aim of the new legislation is to incentivise operators to provide wider and higher quality network coverage across the UK and to get both broadband and telecoms coverage to those areas where previously operators have not invested.
However, property and landowners fear that rents paid by operators will fall significantly and they may even lose control of their land and negotiation powers.
I can reassure you however that any arrangement between landowner and telecoms operator will be a ‘consensual arrangement’ and only in extreme cases where the parties cannot agree will the matter be fast tracked to a tribunal for determination.
Henceforth, leases will be value-based on a ‘no scheme approach’, ignoring the fact that a telecom operator is occupying the land. The new legislation envisages that operators will be able to share, assign and upgrade their equipment with limited consultation with landowners, to speed up the process and increase UK-wide coverage.
However, any changes made by operators can take place with limited consultation only if there is minimal adverse impact on the landowner's retained property. Land and property owners will now have more limited means of breaking a tenancy agreement with an operator. The previous reason of simply wanting to use the land themselves will no longer be a valid reason for terminating a tenancy agreement.
Whereas a valid planning consent for a housing or business development would be a valid reason to terminate, though the land or property owner will have to give 18 months’ written notice to operators.
The Digital Economy Bill once passed will apply only to new arrangements, while agreements already in place and with time to run will continue under the current 1984 Telecommunications Act.
You can find out more on how the Digital Economy Bill may affect you, by visiting the UK Parliament website.
Chris Hicks – Partner
christopher.hicks@fishergerman.co.uk