Telecommunications Infrastructure (Leasehold Property) (Terms of Agreement) Regulations 2022

Baroness Merron Excerpts

Thursday 24th November 2022 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I am pleased to introduce the statutory instrument laid before your Lordships’ House on 19 October. The Telecommunications Infrastructure (Leasehold Property) (Terms of Agreement) Regulations are part of the implementing regulations for the Telecommunications Infrastructure (Leasehold Property) Act 2021.

Providing greater access to fast, reliable and secure connections is a priority for His Majesty’s Government. The economic, social and cultural benefits of improving digital connectivity are already self-evident, and improving our digital infrastructure to deliver gigabit-capable connections will enable a profound change in what digital connectivity can contribute to our daily lives.

However, these benefits can be realised to their fullest extent only if they reach every home. For this reason, last year the Government passed the 2021 Act, which will support people living in blocks of flats and apartments, also known as multiple dwelling units, to access broadband services. The aim of the Act is to encourage landlords to respond to requests for access issued by network operators. I should clarify here that the individual who will be the person required to grant rights under the Act could be a landlord but could also be a property management company, depending on the arrangements a particular building has. This person is referred to as the required grantor in the Act, but I shall refer to landlords in the interests of brevity and clarity.

These rights, sought by operators, are essential for delivering connectivity. This is because, while a tenant in a flat may be able to provide permission for the operator to install equipment in his or her own flat, operators may be unable to deploy their services without first obtaining permission to install their equipment in areas which are not part of the target premises. Examples of such areas are shared corridors or riser cupboards, which are often a necessary part of the route to connecting the target premises. Permission to install equipment in these areas could come from either the landlord or a court.

Data provided by a number of operators suggests that around 40% of their requests for access receive no response. When an operator finds itself in this situation, our understanding is that the operator opts to bypass the property in order to maintain momentum for their wider deployment. The result of that operator’s understandable commercial decision is that the residents in the property concerned are left with little choice but to accept that they will miss out on superior connections, such as the installation of fibre where there currently is only a copper line, or perhaps even miss out on a connection altogether. The Government consider this to be unacceptable.

The 2021 Act addresses this issue by amending the electronic communications code—which I will refer to as “the code”—to create a new streamlined route through the courts: the Part 4A process. Operators can use the Part 4A process to access blocks of flats and apartments if a service has been requested by a tenant but a landlord is repeatedly unresponsive to requests for access. This legislation will thus prevent a situation where a leaseholder is unable to receive a service due simply to the silence of a landlord.

However, government policy in this area also works to keep a proportionate balance between the public benefits and the rights of individual landlords. This consideration is particularly important in the Act, where an operator may gain rights to access a property without the express permission, or potentially even the knowledge, of the landlord. The Act has been designed such that the terms and conditions applied to Part 4A code rights will ensure that this balance between the public benefit of network rollout and private property rights is maintained.

These terms and conditions are contained in two statutory instruments. One is the terms of agreement instrument we are debating today. The other is the Telecommunications Infrastructure (Leasehold Property) (Conditions and Time Limits) Regulations 2022—the conditions and time limits instrument—which was laid in Parliament on the same day as this, but is subject to the negative procedure.

The latter instrument specifies conditions to be satisfied before an operator can give a final notice to the landlord. These regulations are designed to make sure that the operator has made sufficient attempts to identify and contact the landlord before making an application to the court to have an agreement imposed. They also give a time limit within which the operator must apply to court for a Part 4A order and an expiry period for the code rights themselves. This is to ensure that the rights gained through this process are balanced in order to facilitate the provision of new connections without encroaching excessively on property rights.

The instrument we are debating today has been informed through detailed consultation with interested parties, including organisations representing landlords and operators, and contains the exact terms to which any code rights imposed under the Part 4A process will be subject.

All rights conferred under the code, whether under Part 4A or another part of the code—for example, rights to access land or install equipment—are subject to the terms contained in the agreement granting those rights. These could, for example, be particular requirements to give notice before entering the land in question. The precise terms to be applied to a code agreement have never previously been set through legislation.

The terms specified in this instrument include the notice requirements an operator must satisfy before entering the building, entry times for the operator, a requirement for the operator to indemnify the landlord for up to £5 million and requirements for labelling the equipment, among other details.

By prescribing the exact terms of a Part 4A agreement, this instrument represents a novel approach in telecoms infrastructure policy. This new approach has been taken for two reasons.

First, the circumstances in which the Part 4A process can be used are very specific. Part 4A can be used only where the operator needs to access land connected to the premises to which it wishes to deliver a service, and where both the target premises and connected land are in common ownership. Further, this process currently applies to multiple dwelling units only. The limited situations in which the Part 4A process can be used mean that, whereas in most cases legislation cannot effectively pre-empt the terms which a particular situation warrants, in this case the scope is so narrow that it can.

Secondly, fixing the terms of a Part 4A agreement makes the process for courts to deal with applications for code rights less complex, allowing decisions on whether to grant rights under the Part 4A process to be much faster. Given that the Part 4A process is designed to provide a quicker route to gaining code rights in order to avoid an operator having to bypass the building altogether, this is crucial. It also has the benefit of allowing courts to make more efficient use of resources. By allowing these cases to be dealt with swiftly, the court will have more time to devote to more complex cases.

Before concluding, I should note that these regulations apply to Scotland, England and Wales but not Northern Ireland. This is due to an issue stemming from the absence of a Northern Ireland Executive between 2017 and 2019, which caused the jurisdiction of code court cases in Northern Ireland courts to fall out of step with the rest of the United Kingdom. Work is under way to resolve this issue through separate regulations, to follow next year. These regulations and the Act that they help to implement represent an innovative approach to enabling digital infrastructure, which has been carefully designed to deliver improved connectivity for tenants while protecting private property rights. This instrument was debated and approved by a Delegated Legislation Committee in another place yesterday; I look forward to hearing noble Lords’ reflections on it today. I beg to move.

[Baroness Merron (Lab)]

My Lords, I am grateful to the Minister for his thorough introduction to this very practical statutory instrument. It is certainly one that we welcome. It has been subject to consultation and the measures in it seem proportionate.

However, I wish to raise with the Minister the matter of timeliness and process because I believe that, once again, it raises questions about the Government’s prioritisation of business. We can reflect that the enabling legislation was introduced in the Commons in January 2020 and, having been through the Lords, achieved Royal Assent in March 2021. The consultation on the new regime about which we are speaking today ran between June and August 2021, and the government response took until the end of June 2022. Now we find ourselves waiting almost until December for the SI to be laid and debated. I know that the Minister listened carefully to the concerns voiced more recently during the passage of the PSTI Bill about the speed of progress on rollout so, as this is a very helpful regulation to take us forward and speed things up, it begs the question—perhaps the Minister could give some comment in his response—as to why this is taken so long. Does he feel that this is the right way to deal with business?

Turning to the specifics of the regulations, I absolutely agree with the Minister—we have all come to this view—that broadband is an essential utility because it gives us access to nearly every part of society, whether that is shopping, schooling, public services or banking. We need a reliable, fast and affordable connection. Residents who live in multiple-dwelling units, such as blocks of flats or converted townhouses, need broadband just as much as everyone else. Certainly, it is interesting that Openreach warned that, without these much-needed reforms, it would be unable to connect up to 1.5 million apartments, which would undoubtedly risk the creation of a major digital divide. So I welcome the measures that are being introduced to help operators connect people living in apartments where landowners are repeatedly unresponsive. The measures we are considering today will help to resolve some of the most extreme cases but, if we want to meet the scale of the challenge of connecting everyone in a multiple-dwelling unit, further support and reform will of course be needed. I believe that the statutory instrument before us strikes a reasonable balance between operators and landowners and helps to connect people in flats who might otherwise be left behind.

The SI gives a reassurance to landowners that operators have to adhere to certain standards while carrying out the work, which will be a positive move to improve trust in the industry across the board.

I am sure the Minister will acknowledge that operators have raised some concerns that some of the terms are unnecessarily onerous. I will take a moment to refer to those, such as the need to send notice by recorded delivery when all previous attempts to make contact have been ignored or rejected, when many contact addresses for grantors are simply overseas PO boxes. Others have said that they will find it hard to line up permissions. Will the department review whether the use of Part 4A orders is working as intended, and will it record how many are successfully issued and followed through? In other words, will there be a review to see whether we need to make further changes down the line?

My second point is on wider considerations. This piece of delegated legislation deals only with an important but small part of the problem with connections in flats. I want to raise the fact that operators are often forced to move build teams on when they are installing full fibre in a particular area when they get to multiple-dwelling units, which means that those flats are left behind. It could be simply too difficult or costly for operators to come to an agreement with the required grantors in the timeframe during which they are, in a practical sense, in the area. Although it is true that operators can theoretically go back and connect those flats at a later date, that is way less efficient than doing it when they are already there.

The point is that if a build team moves on because the required permissions are not in place, those living in the block will potentially be left without the proper connection for some years until that matter can be resolved. It would be helpful to hear from the Minister how this statutory instrument will resolve the problem of the balance of getting permissions and having teams on the ground.

It would also be helpful if the Minister could comment on the continual revision of broadband rollout targets. Many times in the Chamber he will have heard concerns about constant revision of targets. To prevent this happening again, it is our view that there must be consideration of the broader concerns of those implementing the rollout and an attempt to balance those with the needs of landowners and other interested parties. Can he offer some comment, and indeed reassurance, that targets will not be further watered down?

In conclusion, this SI is a step in the right direction but further reforms will no doubt be necessary to ensure that tenants in flats do not unintentionally become a digitally excluded group. I believe we are all in agreement that broadband is an essential, not a luxury, but it is something that noble Lords will continue to keep an eye on, as I am sure the Minister will.

[Lord Parkinson of Whitley Bay (Con)]

I am very grateful to the noble Baroness for her scrutiny. It may have been a short debate, but she certainly did not let up on her scrutiny of this statutory instrument, and quite rightly so. I take her points about timeliness—we all want to see faster connectivity delivered as soon as possible—but, as I said in my opening remarks, this is an innovative area of law, which has implications for property rights. The 2021 Act introduced a process in which it will be possible for work to be undertaken on private property without the explicit consent, or potentially even knowledge, of the landlord. It is also important to remember that the Act prescribes the exact terms of an agreement in legislation. As I say, that approach has not previously been taken in telecommunications infrastructure policy.