Telecoms operators campaign to reduce rural rents

The new Electronic Communications Code, introduced in December 2017, was designed to help the rollout of rural broadband by giving operators sweeping new powers to acquire rights for radio masts if a consensual agreement was not forthcoming.

But according to telecoms specialist Ian Thornton-Kemsley, based in Strutt and Parker’s Banchory office, that is not what is happening: “Far from improving the rollout of rural broadband, the legislation is being used in such a way that the market for new sites has virtually collapsed. The manner in which operators are using the new code actually appears to be hindering digital rollout.

“Operators are now using code powers to seek new agreements to replace existing leases at substantially lower rent,” he warned. “Whereas government analysis suggested telecom mast rentals would fall by up to 40%, operators are offering rents of £150 per annum based on pro rata agricultural land value in place of existing agreements that average over £5000 for greenfield sites.

Mr Thornton-Kemsley continued: “It is clear that operators are focused on cutting rents at existing sites rather than building new sites to improve coverage. Our own experience indicates that around 90% of current approaches are for changes to existing leases rather than new sites.

“Rather than increase offers to reach a consensual agreement, operators are quick to resort to their new rights by applying to the Lands Tribunal to obtain a compulsory agreement, even where there is little evidence to support any public benefit in the exercise of such powers.”

He reported that there were now more than 20 applications for code powers clogging up the Upper Tribunal in England. While there is only one case before the Scottish Tribunal, that was set to change as a number of statutory notices have been served in Scotland.

Telecoms operators campaign to reduce rural rents was last updated October 4th, 2018 by new-adm-s308
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