The rollout of 5G broadband is an important endeavour, designed to give us faster download speeds, more capacity, and boost connectivity for billions of devices – all of which are vital for any global digital economy.
But delivering 5G for the whole of the UK has proven difficult, and been made worse by clumsy government regulation.
5G requires network equipment, such as masts and cables, to be erected nationwide. This is nothing new. What is new is how much landowners are compensated by telecom companies for planting unsightly metal rigs on their property.
Before 2017, landowners came to consensual agreements with companies who wanted network infrastructure on their property – the system worked well. It was regulated by the 1984 Electronic Communications Code which oversaw the arrangements and contained provision for compulsory siting of equipment at judicially-assessed rents.
Inconsistency in the application of the Code meant it became necessary to amend aspects of the legislation. But rather than fixing just that, the government of the day changed the basis on which rents could be assessed.
The new Electronic Communications Code 2017 changed the basis of land valuation and lowered compensation for landowners. Thousands of small and large landowners have had their income slashed – in some cases, by over 90% – according to the campaign group Protect & Connect.
Indeed, Protect & Connect has brought to light a number injustices the 2017 legislation has visited on landowners. Without any warning or consultation, a rugby club in Aylesbury was told the rent they received for housing a mobile mast would be cut from £6,000 to just £750 a year. This is not an isolated case; hundreds of community groups, churches, and clubs have seen their income reduced to a pittance.
Lower compensation has predictably led to proprietors refusing access to their land and the resulting legal action has slowed down the 5G rollout. The solution to this government-induced mess? More government intervention, apparently.
The Product Security and Telecommunications Infrastructure Bill, now before Parliament, is attempting to make it easier for telecommunications companies to force compliance from landowners. Not only is this an egregious abuse of property rights, it also demonstrates that the Government has failed to understand the crux of the problem.
The issue is clear, the landowner is no longer compensated enough to give up parts of their land and will therefore, rightly, fight for more rent or refuse.
The answer seems obvious: the state must ensure landowners are fairly compensated for the use of their land, as recommended in a recent paper by Dr James Forder, Academic & Research Director at the Institute of Economic Affairs.
His solution is to allow proprietors to come to a mutually beneficial agreement with the telecom companies by restoring the valuation principles used before 2017. He rightly points out that the pre-2017 Code was deficient only because it contained ambiguities and led to legal uncertainties, not because it mispriced land – a point seemingly lost on policymakers.
Arguments that lower rents will create savings for consumers and that a totally free market would allow landowners to hold network providers over a barrel by demanding ‘ransom prices’ fail to stack up with reality, and go against the advice of the Law Commission.
The Government has chosen a deeply unconservative approach, which looks progressively more like property seizure than responsible policy. By allowing the market to function, they could avoid ill-will and litigation that is delaying the roll-out of this essential service.
This issue speaks to a larger problem within UK politics – more state intervention is not the solution to most problems, indeed it often is the cause. For a government that seems to have lost its way, it’s worth remembering that the price mechanism can often do the job much better than any state-led scheme.
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