Telecommunications Infrastructure (Leasehold Property) Bill

Baroness Pitkeathley Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 19th May 2020 Lords Chamber

Amendment 10 withdrawn.

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

My Lords, we now come to the group consisting of Amendment 11. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. It would be helpful if anyone intending to say “Not content” when the Question is put made that clear in debate. It takes unanimity to amend the Bill in this Committee; the Committee cannot divide.

Amendment 11

Moved by

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[Baroness Barran]

I thank the noble Lords, Lord Clement-Jones and Lord Fox, for tabling this amendment. The noble Lord, Lord Clement-Jones, asked for a positive and ambitious response—I think those were his words. I hope to give him a positive response, but I fear that it will be a practical one.

This amendment seeks to understand our thinking on the key concepts of connected land and common ownership, and the impact of this link on the speed and ease of the rollout of gigabit-capable broadband. As the noble Lord, Lord Livermore, outlined, the concepts of connected land and common ownership form a vital underpinning of the Bill.

It may be helpful to noble Lords if I give a slightly more technical explanation of the concept of connected land. In technical terms, let us consider land in respect of which an operator wishes to have code rights, which we will call Land A. In order for Land A to be “connected land”, it must satisfy both limbs of the definition set out in paragraph 27B(3) of the code. It is not enough that it is used for access to, or otherwise in connection with, the target premises—limb (b). Land A must also be in common ownership with the target premises—limb (a).

The concept of common ownership as drafted in the Bill therefore stands and falls with the need for Land A to be held or used for access to, or otherwise in connection with, the target premises, as contained in limb (b).The definition of “common ownership”—as set out in paragraph 27I(2) of the code, towards the end of Clause 1—will catch two pieces of land which have the same freeholder, or which are held under a lease of any sort by the same person. It will also catch two pieces of land where the same person owns an interest in each but at a different level; for example, where a person owns the freehold of one but is the lessee of the other. I am happy to give practical examples of that point if that would be useful to your Lordships.

The connection set out in paragraph 27B(3) of the code is a conjunctive test, so both limbs (a) and (b) are needed for the concept of “connected land” to work. Without that, the essence of the concept of connected land is removed, and it is completely integral. The amendment would remove the requirement for the land to be in common ownership, thus allowing operators to use this policy on any land that exists between their exchange and the target premises. In practice—this is the key reason why the Government do not support the amendment—it would give operators code rights to access land where a landlord was not responsive. A landlord who has no connection to the properties where the operator is going to make their installation could be opened up to potential Part 4A orders, which we believe is disproportionate.

There are other, technical points which could affect the powers in the Bill with the amendment as currently drafted. Paragraphs 27I(2) and (3) seek to define “common ownership” and “relevant interest”. This was designed to ensure that the Bill worked within the different ideas of land ownership in Scotland. The amendment would render those paragraphs ineffective and affect the efficacy of the Bill, particularly in Scotland.

While I recognise that operators are encountering significant problems gaining access rights in situations other than multiple dwelling buildings, this Bill is not the right vehicle for a change as profound as this. My officials have engaged with them, and representatives of landowners, on these points and we are considering what, if any, action could be taken to support delivery if evidence emerges that further interventions are necessary. With that reassurance, I hope that the noble Lord will agree to withdraw the amendment.

[The Deputy Chairman of Committees]

I understand that the noble Lord, Lord Fox, has indicated that he wishes to speak after the Minister.

[Lord Fox]

I thank the Minister for her anatomical explanation of the situation. Large lumps of Victorian and Georgian cityscapes have been converted into a multiplicity of dwellings and flats, many of which are going to find themselves unable, within the definitions of limbs (a) and (b) and the rules set out in the Bill, to request access. Is that correct? There is obviously complicated ownership in all such places: perhaps the need to go through one flat to get to another; there may be leaseholds and freeholds muddled up. However, the point of the Bill should be to get gigabit broadband capacity to as many people as possible, rather than rule out everybody except a very pure clay of candidates. Perhaps the Minister is grasping—albeit eloquently—at the wrong end of this stick.

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Amendment 11 withdrawn.

[The Deputy Chairman of Committees]

We now come to the group beginning with Amendment 12. I remind noble Lords that anyone wishing to speak after the Minister should email the Clerk during the debate. It would be helpful if anyone intending to say “not content” if the question is put made that clear in the debate. It takes unanimity to amend the Bill in this Committee; this Committee cannot divide.

Amendment 12

Moved by

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[Lord Stevenson of Balmacara]

My Lords, I move Amendment 12 and will speak to Amendment 13. Taken together, these amendments probe in a little more detail the way in which operators and property owners will be able to come to some sort of deal. While the Bill sets out to provide a mechanism under which, if necessary, the courts can supervise an arrangement so that access can be provided, the truth is that most operators would wish to have a voluntary arrangement through which they can deal face to face with the person responsible, in order to satisfy the potential user of the new equipment about what they are trying to do. In a sense, it is a slightly strange mixture.

The Bill seems incredibly one-sided in the way it approaches the rights of the owner of the property. We had this debate when considering previous amendments, and I am still a little uncertain as to why this should be. Throughout the discussion, the Minister has tried to make it clear that it is a balance between three competing interests: the rights of the owner of the property, those of the user and those of the operator. But I do wonder whether the balance is right in this respect.

The bar set by the Bill for a landlord to be engaging with the network builder—this is the dialogue that we are talking about—seems to be set a bit low. As I read it, the only requirement of the landlord is that they acknowledge the request notice in writing. That does not give any confirmation that the landlord will negotiate the terms of access to the property in good faith. Can the Minister say in more detail what the Government have in mind here? Could the landlord simply say, “Thank you for your letter—I will get back to you”, and the whole process stops at that point because there is no way of unlocking the arrangement?

In responding to the original consultation, the Government said that a substantive response from the landlord would be enough to take them out of the scope of the Bill, but the Bill as drafted does not require a substantive response. I agree that this might be a definitional issue but if so, why is no definition included in the Bill? This issue was discussed during the Commons stages of the Bill. Amendments that could have addressed it were discussed extensively but the Government rejected them, confirming their view that, by definition, in responding, a landlord ceases to be unresponsive. While I absolutely agree that there is an element of truth in that, it does not solve the problem, which is that if landlords want to play this long and get out of it without committing, it looks as though they can do so. It would sensible either to have no recommendation at all, as per the amendment, or some form of time-limited arrangement under which further action could be taken to resolve the issue. I beg to move.

[The Deputy Chairman of Committees]

Lord Clement-Jones?

[Lord Clement-Jones]

I will not be speaking to this amendment.

[The Deputy Chairman of Committees]

Lord Adonis?

[Lord Adonis]

I will not be speaking to this amendment either.

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The Bill, like the code itself, aims to provide a balance between the rights of the landowner and of the operator. I believe that the amendment would have the opposite effect of what it hopes to achieve. Rather than encouraging landowners to enter into negotiations, I suspect that it risks leading to landowners responding with a knee-jerk refusal. The Bill as drafted incentivises the landowner to respond to an operator by either agreeing to or refusing access, or otherwise acknowledging the notice in writing. Only if they fail to do so will the requirements for the operator to apply to the court crystallise. We hope that this strikes a balance, providing time for the landowner to consider the operator’s proposals carefully, while providing the operator with the certainty that, while they might not receive a simple yes or no, their request for access is nevertheless being considered. With that, I hope noble Lords are content, and I beg that this amendment be withdrawn.

[The Deputy Chairman of Committees]

I have received no notification that anyone wishes to speak after the Minister, so I return to the noble Lord, Lord Stevenson.

[Lord Stevenson of Balmacara]

My Lords, I will read carefully in Hansard what has been said and reflect on it. I am bound to say that, as the noble Lord, Lord Clement-Jones, pointed out, we are back in the land of unintended consequences, which is not really an appropriate argument to use against what is essentially a probing amendment. We do not intend it to go forward into the Bill as it stands. Simply raising the spectre that it might have unintended consequences has not advanced the discussion.

The Minister’s main point was that the Bill’s intention, which I recognise, is to incentivise a situation in which discussions with the operators and others are brought up when people do not reply to requests for information. In a sense, what is in the Bill is an answer to people who have gone AWOL or died and are not able to answer their letters, rather than encouraging dialogue and leading to a conclusion, which is what we are all trying to get to if we are ever to get to the full gigabit-ready internet that we all look for. I do not think that is the answer, but having said that I will reflect on what has been said. I beg leave to withdraw the amendment.

Amendments 13 and 14 not moved.

[The Deputy Chairman of Committees]

We now come to the group beginning with Amendment 15. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. It would be helpful if anyone intending to say “not content” when the question is put made that clear in debate. It takes unanimity to amend the Bill in Committee. This Committee cannot divide.

Amendment 15

Moved by

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[Lord Adonis]

The purpose of the amendment is to probe the Government’s thinking and provoke some debate on the issue of competition and open access in the provision of services on the back of the new infrastructure which the Bill makes possible. It is the same amendment that my colleague Chi Onwurah moved in the Standing Committee in the House of Commons. I draw colleagues’ attention to the very interesting debate in that Committee on 11 February 2020 at cols. 20-23. The interesting point about it is that the amendment itself is almost motherhood and apple pie. It is very weak. It is a declaration of what those of us with a history of engagement in telecoms competition issues think is the state of play anyway. The amendment says:

“Any operator exercising … code rights is obliged to ensure that alternative operators can easily install the hardware needed to provide their own electronic communications service … The definition of ‘easily’ … to be provided by Ofcom”,


the regulator.

The significant thing about that debate is that the Government opposed the amendment. Indeed, it was pushed to a Division in the House of Commons Standing Committee and there was a straight vote on it. Highly peculiarly, given the usual position of the parties on these issues, all the Conservatives voted against having any requirement for open access and competition in the Bill, even though Chi Onwurah’s amendment, as I read it, was a statement of existing government and Ofcom policy.

Reading the Minister’s response—this is Matt Warman, the Under-Secretary in the department of the noble Baroness, Lady Barran—left me more concerned than before. I would like to probe the noble Baroness further on two particular points that came out in his response. First, he made a straightforward anti-competition declaration about the policy intended to result from the Bill. In col. 22, he said:

“Far from improving competition in access to gigabit services, the amendment”—


this amendment I am now moving before your Lordships—

“may actually have the unintended consequence of doing the opposite. As the hon. Member knows, much of the cost of connecting premises is in the initial installation. The amendment could therefore seriously undermine the case for operators to make that initial installation, as they risk being undercut by second or third movers who would not have to bear the same costs.”—[Official Report, Commons, Telecommunications Infrastructure (Leasehold Property) Bill Committee, 11/2/20; col. 22.]

That is a classic statement of the reason that operators, including Openreach, always give for not allowing others to be able to access their wayleaves and technology, but it is not one that the Government have supported in the past. Do the Government believe that allowing operators to ban competition and introduce anti-competitive requirements in contracts is justified as a means of getting this investment? That is a direct question for the Minister. I would like to know what the Government’s policy is. Do they support anti-competitive practices?

On the operation of the existing law, in col. 21 Matt Warman said:

“The Bill aims to support leaseholders to access the services they request from the providers they want”—


a straightforward statement of pro-competition policy.

“It already ensures that leaseholders are not per se locked in to services provided by a single provider; nothing in the Bill prevents a leaseholder with an existing gigabit-capable connection from one service requesting an alternative network to come in and request code rights as well.”—[Official Report, Commons, Telecommunications Infrastructure (Leasehold Property) Bill Committee, 11/2/20; col. 21.]

Can the Minister point me to the provisions ensuring that

“leaseholders are not per se locked in to services provided by a single provider”?

How does that provision square with the Government’s resistance in the House of Commons to this amendment, on the grounds that anti-competitive practices were justified to support operators making investments in extending fibre to the home? I beg to move.

[The Deputy Chairman of Committees]

I call the noble Lord, Lord Haselhurst. He is not there. We will move to the noble Lord, Lord Liddle. I beg your pardon; I call the noble Lord, Lord Stevenson of Balmacara.

[Lord Stevenson of Balmacara]

The case has been so well made by my noble friend Lord Adonis that I have very little to add. I thought, as he did, that the exchanges in the Commons were extraordinary. We need some better explanation of what has been going on there. This is an area where there may be some case for a bit of guidance being issued by the Minister, and not necessarily in regulatory form.

I have recently moved house and have had exactly the same problem of trying to take over an existing line from the previous owner and being told that I could not switch operators and had to stick with the same equipment, even though it is clearly not right for our type of use. I am sure that this a pro-competition and pro-choice amendment which the Minister will want to support—there is a bit of a get-out here which she may want to think about.

[The Deputy Chairman of Committees]

Apologies for skipping over you, Lord Stevenson. We will try the noble Lord, Lord Haselhurst, again. He is not there. Lord Liddle? We go then to the noble Lord, Lord Fox.

[Lord Fox]

I am grateful to the noble Lord, Lord Adonis, for introducing this, because it throws up a sort of paradox—although the noble Lord did not mention it—and I am interested to know the Government’s view on it. In certain categories of installation government money is going across either directly or through local authorities into investment in installation and hardware. Are the Government suggesting that state-subsidised and state-supported hardware would not be mandatorily interchangeable?

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We also have technical concerns about the drafting of the amendment, which I can cover if noble Lords would like or write to them about. The Government sympathise with some of the intention behind the amendment—namely, to allow operators to compete on comparable terms as the best course of action. However, I ask that the noble Lord withdraws his amendment.

[The Deputy Chairman of Committees]

I have received no notification that anyone wishes to speak after the Minister, so we return to the noble Lord, Lord Adonis.

[Lord Adonis]

I am extremely grateful to the Minister. As she says, there are drafting issues, but I am sure that if they were the only concern we would all be happy for the Government to do the drafting for us. There seems to be a contradiction in the Government’s position. May I ask the Minister to clarify it? Is she saying that under the Bill as drafted, and the terms of the agreement with the proposed Part 4A order, alternative operators will or will not have easy access to new infrastructure? To prevent people unfairly undercutting initial investors, it is important that they should not. It is not clear to me and that point seems to go to the heart of the Government’s argument. Are they arguing that operators will have easy access, so that what is proposed here is irrelevant; or that operators will not have easy access, which is intentional because if they did, there would be undercutting? Which of those is the Government’s position?

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Amendment 16 not moved.

[The Deputy Chairman of Committees]

We now come to the group beginning with Amendment 17. I remind noble Lords that anyone who wishes to speak after the Minister should email the clerk during the debate. It would be helpful if anyone intending to say “not content” when the question is put makes that clear in the debate. It takes unanimity to amend the Bill in this Committee. The Committee cannot divide.

Amendment 17

Moved by