Screwing mast hosts over rent is no long term policy
Short-changing telecom mast hosts has slowed the rollout of 5G and the policy needs to be reversed, says the UK Institute of Economic Affairs (IEA). In a paper the think tank argues that the UK government’s tactics to encourage the growth of 5G infrastructure have been counterproductive. The Electronic Communications Code 2017 updated the rules that allow telecom companies to force landowners to accept equipment installations on their land. As a result, the UK’s mobile network operators have ruthlessly slashed back on the payments they originally promised to pay those who host masts on their property.
Counter productive
The Code completely changed the basis of land valuation and lowered compensation for farmers and landowners. In its new paper, the Institute of Economic Affairs (IEA) argues that the rules on payments to landowners failed to follow the recommendations of the Law Commission, which would anchor valuations to market prices. When the 2017 reforms lowered compensation it turned former partners against putting equipment on their land. Legal action followed, which then slowed everything down.
Wrong response
In response, the government has introduced more legislation: the Product Security and Telecommunications Infrastructure Bill, but this only focuses on the symptoms rather than the cause of the 5G rollout slow down, says the IEA. The new legislation compels landowners to accept masts and undermines property while ignoring the issues of landowner for compensation. The money promised to the landowners should be restored, says the IEA. Its paper recommends that the Product Security and Telecommunications Infrastructure Bill, which was debated in the Lords on Monday (6 June), be amended to restore the valuation principles used before 2017, or draft another rule having similar effect.
Trust the price mechanism
“The price mechanism is a fantastically powerful tool. It is baffling that the government seems determined to stop it operating, thereby depriving landowners of a fair return on their land, and slowing down 5G rollout at the same time,” said the paper’s author James Forder, an EA academic.
Desmond Swayne, the member of parliament for New Forest West, welcomed the report and wondered why telcos had used the Electronic Communications Code to tamper with a market that had been working effectively. “The government sought to reduce the market price and predictably created a shortage,” said Swayne. “To address the shortage that it created, the government has now delivered a system that simply bullies landowners into making their sites available at the reduced price. This is a classic example of arbitrary government.”