Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill

Earl of Erroll Excerpts

2nd reading (Hansard): House of Lords
Monday 9th October 2017 Lords Chamber

[The Earl of Erroll (CB)]

My Lords, I want to say a few words on this Bill. It is extremely welcome as the rateable value of fibre connections has long been a problem in the rollout of new systems and new local solutions. BT has for some time used it to block other providers with alternative solutions. It has been quite a problem. Several companies have gone bust over it, and there is litigation on it in the EU at the moment. One problem is that when a new company tries to put in a new solution and has to light some fibre, it is rated very highly, as if it suddenly had as many connections as that fibre could take, not the 10 or 20 subscribers the company may have to start off. Every time BT connects something new to fibre or puts new fibre down, it reduces its rate bill because of the deal that was done when it was set up by statute. Nothing has been done about this. It is inherently unfair and anticompetitive, and something needs to be done about it.

The sad thing about the Bill is that we are talking about new fibre only. What about making the old stuff competitive too, so that we can have alternative solutions? There should be an opportunity to look at that, but I suspect that good lobbying behind the scenes has made sure it will not happen.

The language of the Bill is so obscure that I find it quite difficult. The Explanatory Notes told me something about it. I am not sure whether it applies to newly laid fibre only or to dark fibre that has not been used and is about to be lit. I hope it applies to both because if fibre is already in the ground but has not been used, what is the point of forcing people to lay a new fibre cable to get it working? I cannot see why the Bill cannot be extended to make it more economic for people to attach to existing fibre to provide new local solutions where necessary. There is fibre there, but for one reason or another it is not economic for BT to do the last bit of the connection. I do not get the argument for it having to be totally new fibre.

The trouble is that BT is a publicly owned company not a UK plc asset. We have no control over BT. It has lots of problems to face. It inherited an enormous pension deficit. I have huge sympathy for its commercial problems operating in a global market. However, that does not mean that the British taxpayer, the British broadband user and people who are trying to get businesses going or to reduce the cost of government by getting broadband into areas that do not have it, such as parts of London, communities on the edges of cities and towns and certain rural areas, although some rural areas are better than others—we should not snap at little bits of the problem. We should take a bigger view. What annoys me is that if we put the amount of money we are putting into smart meters into rolling out broadband, we would have no problems and we could have smart meters everywhere. There is a lack of logical thinking at the beginning, but I am almost diverging.

I cannot work out how much power is in the hands of the Valuation Office Agency. It worries me that it tends to favour the incumbent as opposed to new development, quite aggressively in some circumstances, and, despite appeals, is not interested in increasing the rollout of broadband. It is more interested in sticking to what it sees as its rules and rating stuff like a Victorian water pipe.

I have had quite a few briefings on these issues over the years, and they give rise to concern. I hope things are going to change. This is a move in the right direction. I am still worried that Openreach is a wholly owned subsidiary of BT. When you look at how investments run and how things work up the corporate pipeline, you can influence things an amazing amount, even though you are not meant to, by where you put your investment, how you repatriate the profits, jiggle the money around et cetera. The separation may not be as great as we think.

The important thing is to get universal fast broadband out there everywhere, even in areas that do not have people living in them, because when the internet of things comes along, it will not work unless we have broadband everywhere. We need to worry about this to a greater extent than people think. It is not just a matter of cabling up every house, but that will be a start, so let us get there as quickly as possible and reduce the rates bill and the blocks to getting it out there, most of which are commercial.