Product Security and Telecommunications Infrastructure Bill

Lord Vaizey of Didcot Excerpts

Lords Hansard - Part 1 & Committee stage
Wednesday 29th June 2022 Lords Chamber

[Baroness Harding of Winscombe (Con)]

Many apologies. I also thank my noble friend Lady Stowell, who I was not expecting to see, but who has been extremely helpful already this afternoon. I promise I will be brief. The aim of this amendment is to address an issue that other noble Lords and I raised on Second Reading: ensuring that the Bill enables the sharing of pre-2017 poles on private land without requiring an additional wayleave, just as it does for ducts on private land. This may sound very detailed—it is—but will substantially speed up the rollout of full-fibre broadband, on which we are all agreed.

There are an estimated 1 million-plus telegraph poles on private land. Access to them is particularly important in accelerating fibre rollout in rural England and urban Scotland. As with ducts, these poles are regulated under Ofcom’s PIA mechanism. That means that any operator is able to access those poles, so extending the provision to pre-2017 poles on private land would allow all operators to speed up their rollout equally. Without this, operators will have to dig up streets or put up new poles, which will slow down the rollout in the very parts of the country that suffer some of the slowest broadband speeds, based on copper.

There is clear consensus across the industry that the Bill needs to make this possible. I understand that the Digital Infrastructure Minister recently received a letter from all the major operators and trade bodies, asking that this issue be resolved and clearly stating the public benefit that doing so would bring. There is cross-party support for the amendment, and at Second Reading my noble friend the Minister was clear that he was keen to look into the matter very closely. However, as drafted, the Bill does not actually solve the problem. There is no explicit right in the Bill to access the pole or install equipment on it. My amendment is relatively simple and seeks to set that straight. It is limited in scope.

By extending the rights granted under the existing paragraph 74 of the code, these powers would be a code right and therefore apply equally to all operators. That is a really important principle in maintaining the Government’s pro-competition policy. By explicitly including the right to carry out

“works to install, maintain and keep such lines and other reasonably associated apparatus”,

this amendment ensures that there is a right for limited works only and apparatus that is associated only with flying lines between poles. It will not allow large, unsightly or unassociated apparatus to be put on the poles, so there would be very limited visual impact. In fact, it is important to remember that technology is getting smaller all the time; a number of these telegraph poles already have equipment on them, so this would most probably reduce the visual impact rather than increase it.

This amendment also protects the rights of landowners. It grants limited additional rights for operators on how they use the poles. It does not give operators additional rights to get to the pole in people’s back gardens. Landowners would still need to give their consent—that could be a simple verbal agreement—to allow an engineer to enter the property. This amendment does not intend to change that.

With over 1 million poles on private land today, this small and straightforward amendment would significantly increase the rollout of full fibre, on which we all agree. I ask my noble friend to tell us that he agrees that the Bill must be amended to do this. I am not precious about the specific wording or the exact amendment. I understand that DCMS lawyers have some concerns about whether the wording achieves our aim of going up the pole and putting the necessary equipment on it, but I have not seen any alternative proposals. I hope my noble friend will take this amendment in the constructive way in which it is intended. If he has concerns about the specific wording, I hope we will be able to work together between Committee and Report to bring back an amendment that delivers the outcome that I believe we all agree on.

[Lord Vaizey of Didcot (Con)]

My Lords, a cup of tea lies gently cooling in the tea room, unpaid for as I sprinted to move my amendment—and failed to arrive in time. It would never do for me to blame the Liberal Democrats for the mess that I find myself in; I take entire responsibility for not following with due care the moving of the Statement on the Metropolitan Police. Although the finely crafted Amendments 17A and 17B will not be debated, I have the chance to address at least some of the issues they raise in my response to my noble friend Lady Harding’s excellent exposition of Amendment 18.

We are talking about the ability to upgrade telecoms infrastructure. It is worth taking a step back to think about what the Bill is about in its focus on telecoms infrastructure and reform of the Electronic Communications Code. As I pointed out at Second Reading, when I was a Minister I had the opportunity to change the Electronic Communications Code, and I freely admit that I did so after extensive representations from infrastructure providers of all kinds who made the point that the rents that they were being charged by landowners, both in the countryside and on buildings, were extremely high and were affecting their ability to invest in infrastructure. The time had come to redress the balance so that the rents charged were proportionate to the investment being made in infrastructure. However, in the Bill we are trying to revise it further so that the infrastructure can be upgraded much more easily. We find ourselves in a slightly invidious position where, every time a telecoms provider wants to upgrade the existing infrastructure, in theory it has to start all over again on how it negotiates the rents.

Amendment 18, and, had they been moved, Amendments 17A and 17B, address essentially the same issue, which is existing infrastructure and the ability to upgrade it with as little fuss as possible. All of us in this House know that telecoms infrastructure is constantly being modernised and changed. Indeed, sometimes political issues come into play: for example, the decision to remove Huawei from our telecoms infrastructure will require a great deal of changes to existing infrastructure.

It is quite clear that all the infrastructure providers and indeed the Government support some kind of amendment that will allow infrastructure providers to upgrade infrastructure on telegraph poles. That is without dispute. The question we face is whether we can craft a suitable amendment that balances the rights of landowners and infrastructure providers to allow that to happen as smoothly as possible. What I find strange is the fact that multi-dwelling units do not attract the same support. However, I think I understand why telegraph poles are uncontroversial and multi-dwelling units controversial. That is because of a perceived monopoly of Openreach in multi-dwelling units but not telegraph poles. As my noble friend pointed out, telegraph poles fall under the public interest infrastructure access regulations, which means that a telegraph pole that is, as it were, owned by Openreach but on somebody’s land can still be accessed by a competitor, whereas a multi-dwelling unit cannot be accessed where Openreach has its infrastructure.

I ask the Minister again to take a step back and think about the purpose of the Bill and what he and his colleagues are trying to achieve in terms of the £5 billion subsidy to support the upgrading of infrastructure to full fibre, particularly in rural areas. As I said on Second Reading, this is all about planning, not about technology. It is trying to remove as far as possible all the obstacles that exist when it comes to planning. The Minister must ask himself: what is the reality on the ground? It is that Openreach is indeed present in many premises where its competitors are not. There are something like 1.5 million multi-dwelling units in this country that are at risk of not being upgraded because people cannot get access. Openreach tells me that there are something like 620,000 flats to which it has not been able to gain access and 165,000 flats where it has had no response from landlords at all for six months. Those flats will be left out if we do not consider the position of multi-dwelling units. That is not the subject of this amendment but I posit that it is exactly a parallel case.

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[Lord Fox (LD)]

I want to again apologise to the noble Lord, Lord Vaizey, for causing him not to be here—and I will of course pick up the cost of his cup of tea.

He brought up the changed landscape of altnets, and we need to remind ourselves as we talk through the amendments that the old picture, as we looked at the telecoms market as it was—the copper world of a huge company and nothing much else—has passed. The fibre sector is a different sort of market. The fixed and full-fibre network infrastructure supplied by the independents, the altnets, reaches about 11.5 million premises with, at the end of 2022, an estimated 1.5 million live connections. That is separate to Openreach and Virgin, so there really is a big change in that market supply, to which I think the noble Lord was alluding. Had the noble Lord finished, by the way, or did he give way to me?

[Lord Vaizey of Didcot (Con)]

I was giving way to an excellent intervention to save me from the poor quality of my speech.

[Lord Fox]

I am sorry; I suddenly saw the look on your face and thought you were finished.

[Lord Vaizey of Didcot (Con)]

The whole Committee stage debate has already become surreal, and we are only about 20 minutes into it.

If I can take noble Lords back to the tea room, where I was this morning, we were discussing the lack of intervention in debates in the House of Lords, which is apparently seen as a Commons trait and discouraged in your Lordship’s House. In fact, I was told by a very senior chair of a committee—who is in the Chamber—that on no account was one to take an intervention at Committee stage. But I felt that as the noble Lord, Lord Fox, had already transgressed so badly in detaining two eminent Conservative Peers in the tea room, I would simply allow him to continue to flout convention and break the rules. I also felt that my speech was going so badly that, just as I used to do in the other place, giving way at an opportune moment to gather one’s thoughts was sensible.

[Baroness Stowell of Beeston (Con)]

I am very grateful to my noble friend for giving way. I shall make just two points to him and the rest of the Committee. Of course it is permissible—indeed, it is encouraged—for us to engage in interventions during debate, but they should be brief and to the point. I take this opportunity to also remind my noble friend that his amendments have not been moved and we are in danger of debating his amendments, instead of the amendment which another noble friend moved—or indeed, which I moved on her behalf, and she then expanded on my introduction.

[Lord Vaizey of Didcot (Con)]

I take the comments from the chair of my own committee in good heart. Clearly, I am on a learning curve in a very public way.

I simply reiterate that this Bill is about making planning as simple as possible, balancing the interests of landowners and infrastructure providers. The mood of this House is that we support Amendment 18, to allow the upgrade of telegraph poles. We understand that the Government will also support such an amendment if it is appropriately drafted. We look forward to the Minister’s comments on why this is a sensible way forward.

I merely add as an aside that the purpose of the Government’s funding and broadband rollout is to bring broadband to as many premises as possible. We all know from our own experience where the altnets are going. Quite understandably, they want a return on their investment, so they are going to cities and laying fibres in areas where Openreach is already present, where they know that they can get a return. There will be many other areas of the country where, understandably, they will not be able to afford to put in infrastructure. For the Government simply to turn their back on thinking hard about how to upgrade the many multi-dwelling units in different parts of the country simply because it is perceived to be an Openreach problem and not a problem for all telecoms providers is a missed opportunity.

[The Earl of Lytton (CB)]

My Lords, I cannot follow the amusement factor of the noble Lord, Lord Vaizey. As this is my first contribution on the Bill, due to force of circumstances, not least because on our first day in Committee I could not attend due to disruption on the rail system, I declare my interest as a chartered surveyor—still practising, just—with about 47 years’ experience in the public and private sectors. I hope that I can bring some of that to the debate.

As I understood it, in addition to being able to attach things to existing telephone poles, Amendment 18 would provide a right to create new overhead facilities of one sort or another. As a person who, from time to time, has occupied heritage property, I have a particular aversion to overheard telephone lines and to generations of cables being stuck to the outside of buildings—new ones are added but nobody ever removes the old ones. That is the first point that I would question.

The second point goes beyond this amendment but begins to address some of the points mentioned by the noble Lord, Lord Vaizey, on the use of existing facilities. These might be underground ducts. There is a bit of a problem when you get to blocks of flats, because there is a cut-off point at which the rights of, for instance, BT or Openreach end, at which point the wayleave or easement does not pertain. When you get into blocks of flats, there are other criteria. There are many instances of cables being run up, willy-nilly, through communal service risers, with firestopping material being removed and not put back correctly, and so on. No building manager in a block of flats will willingly allow someone from Openreach, who comes with a quite different set of instructions for what they are doing, to just get in there, willy-nilly, as of right. There must be safeguards somewhere along the line.

Further explanation is needed on other things. On numerous occasions I have come across situations where overhead cables have been put underground, perhaps because they were in the way or because it was convenient for visual or other reasons. But you then find that there is no easement or wayleave in relation to the underground bit—the easement or wayleave stops at the last pole, where it goes into the ground. That has certain disadvantages because every time somebody from Openreach wants to do some reconnection or give somebody a better service, they have no drawings of the underground system. I am told that this is an issue where new developments take place and the roads and common areas do not get adopted; they are retained not by the developer but are passed on to some management entity. We have all heard of the fleecehold, where the maintenance of that common realm is then jacked up and recharged through a rent charge.

I absolutely take the point that is being made, but if I am correct a raft of other issues needs to be resolved, including powers to take possession and use of things that are not currently within the existing wayleave horizon. I just flag up the difficulties associated with that.

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[Baroness Stowell of Beeston (Con)]

I can respond to that, since that question is being put to me. There is nothing procedurally to prevent my noble friend tabling an amendment on Report that would cover the same issues.

[Lord Vaizey of Didcot (Con)]

I will take advantage of the flexibility in the Chamber to say that, notwithstanding the intervention of a cup of tea, my amendment will be moved on Report.

[Lord Clement-Jones (LD)]

My Lords, following that very provocative statement from the noble Lord, Lord Vaizey, I will not go into great detail about Amendments 17A and 17B because they have not been moved, although by a side wind the noble Lord mentioned MDUs and various other aspects. All I can say is that if they are moved on Report they will be very firmly opposed from these Benches. There are many reasons for that, which I will not go into, but we look forward to the debate on Report. In the meantime, we will keep our powder dry.

The noble Baroness, Lady Harding, made an extremely good case for her Amendment 18, as has my noble friend. I do not think that the noble Earl, Lord Lytton, is a great fan of poles, but we will just have to live with that. Amendments such as this would ensure that an explicit right exists to access the pole itself or place apparatus on it. That amendment is supported by all operators. It is good that we have one amendment that is almost unanimously supported by the operators.

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

My Lords, I think the whole House is grateful to its former Leader, my noble friend Lady Stowell, for moving Amendment 18 and keeping us on the right procedural track. Amendment 18, spoken to by my noble friends Lady Harding of Winscombe and Lord Vaizey of Didcot, the noble Lord, Lord Fox, and the noble Baroness, Lady Merron, who signed it, concerns rights to upgrade and share telegraph poles.

Clauses 59 and 60 will help to optimise use of the UK’s extensive duct networks through greater upgrading and sharing, but ducts and cables under land do not represent our entire digital network, as noble Lords have reminded us today. Telecommunications lines flown over land play a substantial role too. These lines are dependent on the telegraph poles that support them. Over 1 million such poles are installed across the UK, as noble Lords have noted, providing coverage and connectivity to entire communities, particularly in rural parts of England such as Herefordshire, as the noble Lord, Lord Fox, will know, and urban areas of Scotland.

Since the Bill’s introduction, the Government have been called on to introduce measures to facilitate the upgrading and sharing of poles. We understand that there are substantial public benefits in coverage, connectivity and consumer choice, so we welcome the attention that this amendment has drawn to the significance of poles and lines in network delivery, but as I anticipated at Second Reading, we have concerns as to whether the amendment would deliver material change.

I take on board fully my noble friend Lady Harding of Winscombe’s point about the constructive spirit in which the amendments are brought forward and agree that we must look beyond the drafting of this specific amendment, but as the noble Earl, Lord Lytton, says, this is a legally complex matter. For example, it is not clear whether this amendment would permit pole sharing or allow operators to carry out works beyond those needed for a line to be flown. That might exclude upgrade works that would allow a pole to be used for fibre rather than copper lines.

It is important to note that paragraph 74, to which this amendment refers, deals with land adjacent to or in the vicinity of that on which poles are situated. We need to think about works that might involve the land on which that pole is placed. The Government are looking closely at ways to optimise the use of telegraph poles, but we must ensure that if changes are made in this area, they not only deliver public benefits but include sufficient protections for individuals with poles situated on their land. We will continue to look closely at this issue, but I am not able to accept this amendment today. I repeat the assurance I made at Second Reading that we are actively looking at this issue, and we will continue to consider it ahead of Report.

In response to some general points about requests from the industry, we certainly agree that operators should be able to obtain the rights they need to install and maintain the apparatus needed for robust network coverage throughout the UK. The department undertakes regular engagement with the industry and, if we receive compelling evidence that the Bill can be improved, we are happy to consider whether there is a good case for going further. When doing so, however, the Government will always consider the effect that any potential changes could have on landowners.

My noble friend Lord Vaizey inventively asked why telegraph poles were less contentious than multiple dwelling units, the subject of the amendments lost to today’s debate. We must also bear in mind that a good regulatory framework encourages competition and investment, which are both crucial in delivering consumer choice and supporting deployment to hard-to-reach areas. Measures beneficial to one operator may not always encourage the market competition needed to deliver better outcomes for customers. Indeed, it is important to stress that there is no consensus from the industry on this issue. In fact, many operators have opposed the proposal on the grounds that it would create an unfair advantage for operators that already have equipment inside buildings, and so could potentially have anti-competitive effects.

[Lord Vaizey of Didcot (Con)]

Now that I am in the swing of things, does my noble friend genuinely believe that outside the main metropolitan areas there is genuine competition between telecoms providers? Is it his view that he should support measures from the competitors of Openreach to prevent the rollout of broadband in rural areas, simply to protect their interests in the main metropolitan areas?

[Lord Parkinson of Whitley Bay (Con)]

As I am explaining, we think that the views from other operators point out that my noble friend’s amendment, which was not moved, would create an unfair advantage for operators who already have equipment; that would itself be anti-competitive. Given that the amendment was not put and, as I hope he has heard, would have been resisted in any case—certainly from the Liberal Democrat Benches—perhaps it may be best if he and I discuss it over a cup of tea, which he can add to his tab, between now and Report. I hope that he will not feel it necessary to bring these amendments back on Report.

On Amendment 18 regarding telegraph poles, while reassuring noble Lords that we will continue to look at this actively, I hope that my noble friend Lady Harding —or my noble friend Lady Stowell, who moved it—will be happy to withdraw that amendment for now.

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[Lord Clement-Jones (LD)]

My Lords, I want to mainly talk about Amendment 19 put forward by the noble Lord, Lord Bassam. Before doing so, I say that I have some considerable sympathy for the noble Baroness, Lady McIntosh, and the noble Earl, Lord Devon, because one of the themes we are very much going to come to with the coming amendments is this steady shift in the bargaining power away from site providers towards the operators over a period of years, which started in 2017 and culminates in the current Bill. We had a number of debates on unresponsive occupiers when we last debated this on the then Telecommunications Infrastructure (Leasehold Property) Bill. As the noble Earl said, it is ironic that the cornerstone case has decided what it has, yet here we are changing the legislation away from that decision. I hope the Minister will be able to answer some of the questions that have been put to him.

On these Benches, we support Amendment 19. As the noble Lord, Lord Bassam, said, it would mandate operators with agreements under the code that are not subsisting agreements—namely, agreements that came into force before the code was agreed—to give advanced notice to sites that provide and deliver emergency services, such as hospitals, fire stations and ambulance stations. It is clearly important for providers of emergency services to be given advance notice of when work is going to be undertaken, so that they can take appropriate action to ensure that they are not affected.

The noble Lord, Lord Bassam, mentioned the Minister’s response in the Commons; she prayed in aid the rights under paragraph 17 of the ECC,

“which authorise only activity that will have no more than a minimal adverse impact on the appearance of the apparatus”.

However, this takes no account of the fact that, while the works may involve minimal adverse impact, it may actually involve disconnection at the time of installation. The Minister said that she was,

“not aware of any instances in which an operator has relied on its paragraph 17 rights to carry out upgrading and sharing activities that have gone beyond the scope of what that paragraph allows”.—[Official Report, Commons, Product Security and Telecommunications Infrastructure Bill Committee, 22/3/22; col. 120.]

However, that is not the right question. The right question is: what kind of resilience and risk planning do the emergency services have in those circumstances? If they do not know that there is a risk of disconnection, how can they plan for it? This seems an extremely sensible amendment which will allow the emergency services to have notice and to be able to plan for circumstances when they may be disconnected.

[Lord Vaizey of Didcot (Con)]

My Lords, this is an interesting debate on these proposals, which are potentially linked and will develop into a theme which perhaps redresses the balance.

When commenting on the amendment to notify emergency services, it must be acknowledged—by those of us who regard our telecom infrastructure providers as providing an extremely important service to the country, doing difficult, tedious and time-consuming work with private investment—that they do not always get it right. I again remember—this will become a theme of my speeches—that, in my time as Minister, one would have local authorities refusing to give permission to broadband providers to put in place infrastructure because of the mess they had left behind from their previous work. The most notorious and, I thought, slightly irritating resistance came from Kensington and Chelsea Council, which did not like the design of the green cabinets—perhaps it wanted them designed by David Linley or someone like that. Both the noble Earl, Lord Lytton, and this emergency services amendment highlight the fact that, too often, when infrastructure providers are allowed in to upgrade their apparatus, they do not take account of the knock-on effects of their work, either by not taking into account building safety regulations or by not notifying the occupiers that there might be disruption. The amendment is well placed to raise these points and for this House to remind infrastructure providers that they must continue to improve on this.

What I find interesting, from the perspective of landowners, is the balance between wanting, obviously, a reasonable rent for the disruption and visual intrusion that telecoms equipment can bring when it is placed on one’s land—certainly one’s property rights should be sacrosanct and no one should be allowed simply to arrive without notice and put infrastructure where they please—and the point about bringing huge benefit to a local community where one’s land is situated, and indeed to one’s own operations when infrastructure provides the connectivity. I can never get my head around that.

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The balloon has gone up, in that mast site operators and network operators are seen as having resorted to a slightly crafty inversion of law and practice. I think it is regrettable that there is a sentiment that suggests that site owners are a type of greedy usurer. I am unconvinced by this business of site rentals being too high. In many instances, it is no more than one would expect to pay for a handful of lock-up garages in a suburban location or a relatively smallish area of open storage land. The aggressive tactics that have been complained about arose because people can get away with it, and it is no longer seen as a good sector for the lessor. If you want good relationships, you do not resort to such tactics, particularly if you wish them to be long-term.

[Lord Vaizey of Didcot (Con)]

Is the noble Lord aware of the American import of site aggregators—companies which, I think, finance the Protect and Connect campaign? I should say I used to work for Speed Up Britain, so goose for the gander and all that. This American import of site aggregators is effectively buying up sites on land, and then negotiating with the mobile operators to extract valuable rents and increase the value of their companies.

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[Lord Clement-Jones (LD)]

My Lords, on these Benches, we support the amendments introduced by the noble Earl, Lord Lytton, with his expertise both as a valuer and surveyor and as a site provider. I well understand why he has taken the trouble to take us through the amendments in the way he has, because they lie absolutely at the core of the Bill, of the relationship between site providers and operators over a long period, and of Protect and Connect’s campaign. It is quite reasonable to unpack the valuation system that has been in place and explain in some detail his proposals by way of the amendments for a new valuation system, or at least an alternative way to deal with the current one.

I start by quoting the Central Association of Agricultural Valuers:

“The tragedy of the 2017 Code is that, far from encouraging collaboration over sites assisting roll-out, some leading operators have made heavy handed, confrontational and attritional use of the powers and privileges they were given by it, very largely to reduce the cost of renewing existing agreements rather than winning new ones or make themselves attractive as tenants. The irony is that, as reported to November’s RICS Telecoms Conference, even if rents may now be much reduced, the overall cost of securing a site has doubled and timescales lengthened.”


That seems very paradoxical. This refers to the fact that, as the noble Earl said, under changes made to the code in 2017, a no-scheme or no-network valuation methodology for valuing land was introduced. As he also explained, this allowed site providers to recover only the raw value of their land, rather than receiving a market price. It did this by inserting a new line into the code that, when setting the value of a site, prevents courts from taking into account a site’s potential use for the provision or use of an electronic communications network.

At the same time, as the noble Earl has also explained, another change was made to the code’s valuation provisions to ensure that site owners cannot charge ransom rents. Any valuation must assume that there is another site available to operators so there is no monopoly in land provision around any site. As he also mentioned, this was recommended to the Government by the Law Commission. Operators have been able to use these changes to drive down the rents that they pay to site providers, often to peppercorn rents. In 2017, the Government said that they expected that rent reductions should be no more than an absolute maximum of 40%, and that has been cited at Second Reading and on many other occasions. However, we know from data cited by the operators that reductions have at best averaged at 63%, a huge sum for many of the people who rent their land to be used for telecoms infrastructure, and in many cases, as we have also heard, reductions have been much higher—in the region of 90%.

The Minister will be aware of the Protect & Connect campaign, and many Members around the House will have had communication with it. It cites the Fox Lane Sports & Social Club, which had a mast on its land for 12 years owned first by Orange and now by EE. The club was getting £7,800 a year but it has now been told that it will get only £794 a year from 2023. Billericay Rugby Football Club had a mast for over 20 years and allowed Vodafone—now Cornerstone—to attach infrastructure to the mast. It paid the volunteer-run club £8,500 a year. However, with the changes to the code, EE says that it will cut the rent by more than 90% to £750 a year. There are many such case histories worth looking into. The evidence is there.

[Lord Vaizey of Didcot (Con)]

Surely the noble Lord agrees that a mast on a community sports building, although it provides a generous rent, should not be regarded as some kind of lottery win. I return to my point that the benefit of that mast—the connectivity it gives to not only the sports club but the community around it—is to be considered, as well as the vast rent that was charged until the code revision.

[Lord Clement-Jones (LD)]

My Lords, I cannot believe that the noble Lord believes that it is reasonable to reduce the rent by 90%. There may be community benefits. However, I will come on to whether the consumer has had the benefit of these reductions, which is a very important point, and to the point about aggregators versus mast operators, which seems to be the battle of the behemoths. That is not a very happy situation but, in a sense, one caused by the changes that have been made to the ECC.

Protect and Connect estimates that providers have lost more than £200 million a year in income, including £60.5 million of lost local authority income, £44 million of lost agricultural rural site-owner income and, as the noble Earl, Lord Lytton, says, the Government’s legislation expands the no-scheme valuation regime into approximately 15,000 agreements governed by the Landlord and Tenant Act 1954 and the Business Tenancies (Northern Ireland) Order 1996. This would allow operators to ignore contractual agreements entered into in good faith, leading to more incomes being dramatically reduced.

I come on to the question of consumers. The noble Lord, Lord Vaizey, talked about the aggregators but my noble friend Lord Fox and I have brought up throughout the passage of the Bill the question of what is in the interests of the consumer. The benefit appears not to be coming down to the consumer. In fact, a great deal of money is being made in other parts of the forest. The Times yesterday reported that Digital 9 Infrastructure has bought 48% of Arqiva Group Ltd from the Canada Pension Plan Investment Board, using £300 million in cash and a loan note. Clearly there is money to be made, but is any benefit flowing through to the consumer? If the site providers are being heavily reduced in income, that is clearly not going through to the consumer.

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I also reiterate that our focus here should be on increasing connectivity. Why would a landowner let a stretch of land to a mast operator when the rent recovered would simply be equivalent to the value of the land when undeveloped or from its existing use? That is a poorly defined concept but also, in this brave new world of ecosystem services, all of that undeveloped land now has potential to provide biodiversity net gain and to earn ELMS payments et cetera. It would appear that none of that development in the use and potential value of land will be baked into these rental negotiations. Can the Minister, in responding to these amendments, explain how payments for biodiversity, water retention et cetera will be baked into the negotiations under these new provisions?

[Lord Vaizey of Didcot (Con)]

My Lords, having followed this debate quite closely, I thought I would make a brief intervention. I want simply to put the case for the operators, since they have been hammered pretty much from all sides—surprisingly, from the Liberal Democrat Benches as well; they have now rediscovered their landed gentry roots and gone in to bat for them.

It strikes me that the mobile operators, in particular, are not charities. Much as it is a good thing that they were able to pay generous rents to local community rugby clubs, and much as I would not wish to stand in the way of such clubs receiving generous rents, those operators are commercial organisations. It is important to emphasise that the country benefits, as they have paid enormous amounts of money for the radio spectrum that they use. Famously, they massively overpaid for 3G but certainly paid substantial amounts for 4G and for the 5G spectrum that is now being rolled out. All that goes into the Treasury coffers and no doubt finds its way to various rugby clubs as well.

It is also a mistake to believe that the mobile phone companies in this country are particularly profitable. As I understand it, their margins are pretty low at between 1% and 2%. I always joke that that is entirely the fault of my noble friend Lady Harding, because of course it was TalkTalk that, as a company, got the British consumer used to paying low prices for mobile phones. The large cost of a monthly mobile phone bill often relates to the cost of the smartphone that the consumer is determined to have. I emphasise again to your Lordships that there is a balance to be struck between charging a reasonable rent and the benefits one gets—

[Lord Northbrook (Con)]

I am sorry to interrupt the noble Lord, Lord Vaizey, but Vodafone’s figures to March 2021 showed a pre-tax profit of £3.7 billion. That seems to be a reasonably profitable company.

[Lord Vaizey of Didcot (Con)]

We ought to remember that Vodafone is a global company and a great British success story. I congratulate the noble Lord, Lord Northbrook, on reading out the successful efforts of the Protect and Connect PR campaign in picking individual stories that appear to show rapacious mobile operators riding roughshod over small community organisations.

The key point is that, if you put a mobile mast in a rural area, it is not going to be a significant generator of revenue for you as a company because it will be used by only a few people. If the market is left entirely to its own devices, most of the masts—as with most of the fibre that is going into the ground—will go into our main metropolitan areas. That is why if you walk down Oxford Street, you will see a mast pretty much every 10 or 15 metres because that is where the revenue is generated. If one insists on charging very high rents in rural areas, we will slow down the connectivity and build-up of rural networks. I simply want to make the point that mobile operators do not exist, much as one would wish them to, to supplement the income of community sports clubs, much as I love and admire the work that they do.

[The Earl of Lytton (CB)]

In saying that mobile operators are very large and substantial companies, does the noble Lord accept that only part of what they do fulfils the same sort of social benefit commonly associated with a traditional utility company? A very large amount of what they do and propose to do is the selling of very large amounts of bulk data for all sorts of commercial purposes, not least streaming information to parts of the entertainment business. Why is the claim made that they should be treated in the same way as a utility, when a data centre, battery storage facility or even a wind or solar farm would not qualify in the same way? I put it to him that some of the arguments put forward, and which appear to have influenced government, do not stand up to scrutiny.

[Lord Vaizey of Didcot (Con)]

I do not want to be sidetracked into a debate on the classification of wind or solar farms, but I would describe mobile phones as an essential utility. The noble Earl himself pointed out what pleasure he got from having an emergency services Airwave mast on his land and how important that is. Rural connectivity is becoming absolutely essential, which is why the Government have put £5 billion into supporting the shared rural network.

My noble friend Lord Northbrook spoke about his row about the mast on the M3. What he should also have pointed out about the reduction in rents perhaps reducing the opportunities for farmers to diversify is that it is a complete red herring. The opportunities for farmers to diversify are provided by giving better mobile connectivity. Anyone who knows Jeremy Clarkson and has watched his incredible programme “Clarkson’s Farm”—maybe he is one of the 50 rumoured Peers who will be coming into this House shortly and will give us the benefit of his views personally—will know that what is really holding back diversification are small, conservative, small-minded district councils that will not give planning permission for much needed restaurants, car parks and farm shops.

[Lord Fox (LD)]

My Lords, I shall not enter the zero-sum game debate we appear to be having. However, the really salient point I ask your Lordships, particularly the Minister, to focus on is the one made by the noble Earl, Lord Devon: if there is no financial incentive to landowners to take masts, there will not be masts and we need those masts. Whatever happens, the formula has to deliver an incentive to the landowners. The evidence is clear; that incentive is vanishing to the point where it ceases to be viable. That is the point your Lordships should focus on in this debate, and the one I hope the Minister brings to bear in his response.