Digital Economy Bill

Lord Foster of Bath Excerpts

Committee: 1st sitting (Hansard - continued): House of Lords
Tuesday 31st January 2017 Lords Chamber

Ofcom has until now had very little involvement with the Electronic Communications Code beyond its light-touch licensing regime to approve code operators, with no apparent subsequent monitoring of conditions, such as operators’ provision for decommissioning apparatus. It is now being given a serious role in regulating matters where site providers and infrastructure providers should also be treated equitably. Yet historically, Ofcom has had duties only to the operator. This is important. Amendment 43 extends explicitly the range of people it should consult. I beg to move.

[Lord Foster of Bath (LD)]

My Lords, I have been a Member of your Lordships’ House for just 14 months, so I am relatively new. That probably explains my confusion as to what exactly happened to the previous string of amendments. I look forward to the Minister’s response to them, even though they appear to have been withdrawn at a later stage—but I am sure it is all very simple.

Another surprise is that I never thought I would hear a debate in which a spokesman on the Front Bench, in this case the noble Lord, Lord Grantchester, would appear to be singing the tune of the Country Landowners’ Association. I say openly to the Minister that, on these Benches, we are broadly supportive of the new Electronic Communications Code. The noble Lord, Lord Grantchester, is absolutely right to ask a number of questions about some of the details of it, and concerns have been raised about some aspects by a number of organisations. However, we believe it is vital that the new code is brought in quickly, because we want to see an expansion of the infrastructure that will enable us to deliver the increased connectivity that this country desperately needs.

I do not want to go through all the amendments in this group in the way that the noble Lord, Lord Grantchester, did. We look forward to the Minister going through them—and the previous ones—in a few minutes. However, I want to pick up one amendment. It is probably the one that has most surprised me—the lead amendment in this group, Amendment 26. The noble Lord, Lord Grantchester, acknowledged that this was a probing amendment. But, at the same time, he made it fairly clear that he was quite supportive of what was contained within it.

On these Benches, we believe that independent wireless infrastructure providers have benefited this country enormously by investing in the development of alternative structures—water towers, pylons and so on—to make them some of the most productive telecommunications facilities in the country and improve connectivity, not least in rural areas. Our real concern about Amendment 26 is that, if accepted, it could alter investment planning by independent infrastructure providers in a way that would curtail much of the development we want to see.

I believe the issue raised in Amendment 26 was adequately addressed in a letter that the Minister sent to many of us some time ago. For the benefit of Members who do not have the letter in front of them, he said:

“Code rights can only be obtained to install apparatus on, under or over land. Where operators have invested significantly in the physical apparatus that underpins coverage they should be able to achieve appropriate commercial returns. Alternative structures that have been adapted for the purpose of delivering network coverage are essential to connectivity and there will be cases where code rights do not apply”.


He said that questions had been asked,

“about whether code rights apply to various structures such as church steeples and water towers”—

and so on. But he goes on to make it very clear when he states:

“Whether a water tower has been adapted to the extent to which it can be considered to be electronic communications apparatus will depend on the specific circumstances of the adaptation … We have established a clear and robust legal framework within which parties can resolve matters by agreement and if necessary apply to courts to resolve any disagreements”.


That is very clear—we want to protect these sorts of developments because we do not want to attack the investment that we hope will be made in the future.

That position is exactly the same as the one taken by the Labour Party Front Bench when this issue was debated in another place. Louise Haigh said:

“We would also like to explore what consideration has been given to how we can ensure that independently-owned infrastructure can have a significant role in the sector and, if possible, make up a larger proportion of our infrastructure in line with the global market. The much-discussed difficulties of the broadband roll-out highlight the issues when infrastructure is owned by a private monopoly. We should seek to break up this market as much as possible. For that to happen, investment incentives for independent infrastructure need to be maintained”.—[Official Report, Commons, Digital Economy Bill Committee, 20/10/16; col. 165.]


I entirely agree with the Front Bench of the Labour Party in another place on this issue—but I confess that I am concerned and confused by the Labour Party Front Bench in this House. I look forward to hearing where the Minister stands on this.

Perhaps I may give the Minister notice that, having said that we are very supportive, on the next group of amendments we may have a slight disagreement—but we will have that debate a little later this evening.

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, perhaps I can clear up one thing for the noble Lord. I have not been in this House much longer than he has but I was in the Whips’ Office for two years and I have a vague understanding of what is going on. The noble Lord, Lord Foster, obviously missed my thrilling answer on the last group but I responded to it and the House resumed before the Deputy Chairman called the amendment. Therefore, the amendments in that group were dealt with and we resumed the Committee stage of the Bill with the Front Bench withdrawing their amendment. That got us back to where we should be, which is with this group. Therefore, I think that everything is in order.

Amendment 26 seeks to alter the definition of electronic communications apparatus. I too was rather surprised by some of the things that the noble Lord, Lord Grantchester, said. I shall try to explain where we are on this subject, although I think that the noble Lord, Lord Foster, made my case for me. This is a fairly interesting proposal. I will take a look at what the noble Lord, Lord Grantchester, said in the cold light of day and we will obviously have discussions about it if necessary. I accept that he has made a long case, but I cannot answer it in complete detail today.

We have had many meetings with noble Lords on this subject and we have discussed whether various edifices such as water towers are apparatus. The Government are clear that the code should not interfere with incentives to invest in infrastructure. The reformed code makes a clear distinction between land and apparatus, and an operator cannot exercise code rights against another’s infrastructure. A building used solely for enclosing apparatus is appropriately defined as apparatus. This might include a small brick-built cabin that was part of a site. Permitting operators to secure compulsory access to such a building could encourage one operator to exploit another’s existing investments, and this would naturally create disincentives for future investments in digital communications infrastructure. Here, I agree with the noble Lord, Lord Foster.

Equally, a range of structures are adapted for use in providing a digital communications network. Whether a structure has been adapted so as to make the entire structure “apparatus”—rather than only part or none of it—is a question of fact and degree, having regard to what the parties have agreed, the nature of the installation and the extent of the adaption, as outlined in my letter. These are fact-sensitive questions that should be the proper subject of agreements and, if necessary, determination by the courts or tribunals. As such, I do not consider the amendment to be appropriate or necessary.

Amendment 29 seeks to do two things. It would ensure, first, that the assignor remains liable to the landowner and, secondly, that the assignee does not have the benefit of the assignment unless the landowner is given notice of it. We want to ensure flexibility for operators and continuity of service for consumers when companies go through mergers or restructuring. This amendment would frustrate that objective, which was based on the Law Commission’s recommendation that code agreements can be freely assigned. Further, the additional protection the amendment seeks to give the landowner is unnecessary: if no notice of assignment is given, the current drafting means that both the assignor and the assignee are liable to the landowner under the terms of the agreement, which is a substantial protection.

--- Later in debate ---

Moved by

[Lord Foster of Bath]

27: Schedule 1, page 95, line 34, at end insert—
“(e) must be notified to Land Registry, Registers of Scotland or Land and Property Services, whichever is appropriate.”

[Lord Foster of Bath]

My Lords, the Minister will be aware that at Second Reading I argued that there should be a public record kept of when rights over land are granted under the Electronic Communications Code. The Minister said that he was not minded to do that. He told me that,

“prospective buyers will be able to ascertain what code rights might apply to land by inspecting the land”.

If I went to see a field or a piece of land that I owned and saw nothing on it, it would not mean that there were no fibre-optic cables underneath it, and I am not sure how I would find that out by inspection. He gave me another option of,

“making appropriate inquiries before the contract”.

If I have a piece of land with nothing apparently on it, I have absolutely no idea of to whom I would start making those inquiries. Perhaps the Minister can assist me. He also said—presumably it was the basis of his reply—that the Law Commission had considered this issue, and as a result the Government were going to stay where they were, maintaining,

“the position under the existing code”.—[Official Report, 13/12/16; col. 1226.]

I therefore thought it would be a good idea if I looked at what the Law Commission said about this matter and the existing code. It said in its report:

“Paragraph 2(7) of the 2003 Code states:


‘It is hereby declared that a right falling within sub-paragraph (1) above is not subject to the provisions of any enactment requirement the registration of interests in, charges on or other obligations affecting land’”.


That is what is to be continued, according to the Minister, in the new arrangements. Yet the Law Commission said of this:

“It is not clear what this means”,


and that:

“RICS noted that: ‘the current situation, whereby Code Operators are unsure as to the correct interpretation of paragraph 2(7) of the Code, has led to some Code Operators registering their legal agreements and others deciding not to do so’”.


Following that, the Law Commission proposed a significant change to the arrangements. That appears in paragraph 2.116 of its report. In coming to that conclusion, it noted that some organisations proposed that we change the situation. For instance, Mobile Phone Masts Development Ltd said:

“There is no reason why rights created or granted should be exempt from the LRA 2002”—


the Land Registration Act 2002—and that:

“It is in the public interest for the rights/obligations to be recorded on the register”.


Some, including the Agricultural Law Association, took the view that it should go even further and that some things that currently would not be covered under the code should also be covered by land registration. Others, as the Law Commission pointed out, had a completely opposite view. The Country Land and Business Association, to which I referred earlier, and BT,

“suggested that a requirement to register would place an unwelcome administrative burden on Code Operators”.

I can see that the Minister was in a difficult position because some people wanted one thing and some wanted the other, but his solution has landed us back at the very thing that currently exists, of which the Law Commission says:

“It is not clear what this means”,


and which others say is a confused situation. In that difficult position, the Minister would no doubt look to the Law Commission’s final conclusions. I shall read two of them out and ask the Minister to tell me which of them will be registered in the Land Registry and which will not, and why he will not support my simple amendment, which would require that all rights conferred through the ECC be registered in the relevant Land Registry, depending on the system the devolved Administrations have.

The two recommendations from the Law Commission are, first:

“We recommend that where Code Rights are conferred by a lease, the revised Code should make no special provision as to who should be bound by the lease and its provisions, and should not amend or disapply the normal rules of land registration”;


and, secondly:

“We recommend that where Code Rights are conferred otherwise than in a lease, the revised Code should provide for them to bind successors in title to the Site Provider who granted them, and those with an interest subsequently derived from the title of the Site Provider, as if they were property rights”.


Can the Minister tell me which of those two should be registered and why we should not just register all of them for simplicity?

[Lord Ashton of Hyde]

My Lords, I start with the noble Lord’s test of which of the two should be registered. The answer is none because we do not think we should have registration of these rights. However, I accept that there are many issues about the Law Commission, which I will investigate and come back to him because I do not have all the answers at the moment. I am not by that guaranteeing that we will accept the amendment but I accept that he has made some points that deserve a closer look before Report.

The amendment proposes to include a requirement for code agreements to be notified to the Land Registry. The noble Lord will not be surprised to know that we have not changed our opinion on this. We held a consultation on the code in February 2015 and one of the issues consulted on was land registration. We concluded then that code rights should not be subject to a requirement that they are registered. This reflects the position under the existing code, which the noble Lord mentioned, which has worked effectively since 1984 and avoids creating unnecessary administrative burden.

When buying land it is usual to inspect the physical property and to make inquiries before contract to establish what burdens may be on the land that are not registered rights. These include standard checks by purchasers and conveyancers which should identify whether there are any existing code rights over the property, in the same way that when a property is bought in other circumstances the onus is on the seller to inform, and that becomes part of the contract.

However, as I have said, I accept that the noble Lord has made extra points about the Law Commission and so, on the basis that I will look at those before Report, I hope he will be able to withdraw his amendment.

[Lord Foster of Bath]

I am grateful to the Minister for his helpful reply that he will look at the matter further. With that assurance, I beg leave to withdraw the amendment.

Amendment 27 withdrawn.