Telecoms shake up in prospect - October 2012

Oliver Harwood, a partner at RH & RW Clutton said "the Law Commission have regrettably completely missed the point. While it is true that the drafting of the Communications Code leaves a lot to be desired, in their ill-judged reforms they propose to ditch the fundamentals that underpin the telecoms market".

We have, on behalf of clients, today (26th October) submitted a hard hitting reponse, which is available as a download on our website.

As we say in the response

Parliment has not authorised a complete reversal of the market based approach, which was clearly at the heart of the drafting for "consideration".
The implications of the proposed change are immense.
It will unjustly enrich mobile telecommunications opertators, who currently willingly pay between five and ten thousand pounds per annum for a 10 x 10 metre mast site, but who in a no scheme compensation world would pay the same as the National Grid for a pylon - currently between £87.61 and £147.93 per annum.
It will unjustly enrich fixed line operators, who currently pay between 10p/metre per annum and 29.5p/metre per annum, but who would be entitled to argue that compensation should be limited to the amount that electricity companies generally offer for underground line of 2.3p/metre per annum.

As we have said, and repeat here, the market approach has worked for the vast majority of cases, and the drafting of the Code, whilst lamentable, has not stopped the roll out of both mobile and land line commnications to the vast majority of the population.

The problem with the final mile, and the upgrading of broadband services to International standards of speed, will not be solved by the proposed change from consideration to compensation. The problem is that the industry cannot deliver shareholder returns from laying cable or providing signals where there are too few suscribers to make the investment pay. This can only be solved by the proposed public private partnerships, with public funding.

In fact, the market approach will ensure that only the appropriate amount of rent is paid for services that are cost effectibe without public subsidy. The sums that BT pay for phone lines are already calibrated to take account of the number of customers served, and this principle will be adopted and agreements made in the market by landowners and companies who are engaged in rural broadband delivery.

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