Written evidence submitted by Protect & Connect


Protect and Connect was set up this year to represent land and property owners across the country whose interests were damaged by the changes to the Electronic Communications Code in 2017 that were justified on the basis of digital infrastructure improvements that never materialised.




A synopsis of independent reports by the CEBR into the workings of the Code has been included as an annex to this response.




  1. The Public Accounts Committee’s January 2021 report highlighted the risk that digital inequality compounds the economic inequality exposed by the pandemic. The Committee rightly noted that the government’s existing policy framework meant that it was at risk of missing its key connectivity targets, including the rollout of gigabit capable coverage. It is vital that the government rethinks its approach to digital infrastructure deployment if it is to harness the benefits of next generation connectivity.
  2. Most importantly, it is our view that a functioning and balanced land market is key to fast and even rollout of digital connectivity, particularly in harder to reach areas that have so far found themselves on the wrong side of the digital divide. This functioning market successfully delivered previous generations of mobile connectivity.

Success in delivering digital connectivity is critical to reducing economic inequality in the UK

  1. Digital connectivity is key to delivering the government’s economic agenda. Better connectivity will result in improved productivity and drive future growth, allowing the UK to remain globally competitive while ensuring that all parts of the country receive the benefits of good connectivity; this is a crucial aspect of the levelling up agenda. We support the government’s ambition to deploy gigabit-capable connections to every part of the UK, providing people, communities, and businesses with new opportunities, even in the hardest to reach areas.
  2. To achieve this, the government needs to achieve a rapid and deep rollout of both full fibre broadband and 5G mobile networks. As the Committee’s January report notes, ‘gigabit-capable’ infrastructure is not limited to full fibre, and includes technology such as 5G. The UK’s ambition should not just focus on broadband; it should be for full fibre and 5G networks to work together to give a seamless high connectivity user experience.
  3. While fibre optic cables deliver remarkable performance and reliability in the home, 5G can provide the same transformative data transfer speeds, and can often also be deployed in a faster and more cost-effective way. This interconnection has been recognised by mobile operators who continue to expand their focus on delivering broadband to the home.
  4. To this end, we have focused this response on the government’s progress towards its goals on both full fibre broadband and 5G, given their intertwined importance to addressing digital inequality.

Stretching connectivity targets require policy change to be successful

  1. The government has rightly adopted stretching ambitions for the rollout of next-generation connectivity. Its target is for at least 85% of UK premises to have access to gigabit-capable broadband by 2025, and for at least 50% 5G coverage in the UK by 2027.
  2. While steady progress is being made towards these goals, rollout has been slower than hoped, and compares poorly to deployment rates in competitor countries in Europe and elsewhere. Deutsche Telekom, for example, can already provide 5G services to more than 50% of the population, and Germany has set a target of 99% coverage by 2025.
  3. In addition, many areas in the UK are still poorly served by previous generations of connectivity; Ofcom’s Connected Nations report estimates that mobile network operators on average only provide coverage to around 80% of the UK’s landmass. The situation in broadband is not as acute, as the Committee notes, with 96% of UK premises able to access superfast broadband, but this still represents millions of people.
  4. The government has put in place substantial subsidies targeted at hard-to-reach areas where it is less profitable for telecoms companies to operate. These aim to overcome cost barriers and stimulate investment in areas and to premises that would otherwise not be commercially viable. These programmes include:

10.1.                      £5 billion in public funding through the gigabit infrastructure subsidy programme, otherwise known as Project Gigabit. Its policy intention is to deliver gigabit-capable broadband to the 20% of households in the UK which are not expected to be reached commercially.

10.2.                      £500 million in matched funding through the Shared Rural Network Programme, a deal with EE, O2, Three and Vodafone to invest in a network of new and existing phone masts. The programme aims to bring 4G coverage to 95 per cent of the UK’s landmass by end of 2025.

  1. However, these programmes will take time to deliver and will not accelerate deployment in areas that the government has considered competitive and commercially viable. In these areas, regulatory change can help. To be effective, these interventions must be evidence based and carefully designed around the needs of the market.


Fixed access and mobile networks face different deployment challenges

  1. Sites and access to land are essential for any communications network. The Electronic Communications Code is the legislation that is intended to provide a stable environment for both infrastructure owners and site providers.
  2. Some network operators contend that reform to the Code is needed to expedite the UK’s broadband rollout. However, the reality is that the land markets for fixed and mobile networks face very different challenges and therefore require different policy approaches.

Inability to obtain access agreements has the potential to hinder full fibre rollout

  1. Network operators deploying fixed networks commonly cite an inability to obtain access agreements from absentee landlords as the most significant barrier to rollout of full fibre networks. This was particularly the case for multi-dwelling units (MDUs), where unresponsive landlords (even if they are just freeholders) failed to respond to requests for access, delaying rollout to residents (who could be leaseholders or tenants) across the entire building. The Telecommunications Infrastructure (Leasehold Property) Bill, which became law in March 2021, was passed to address these concerns by granting access rights to operators for a defined period where landlords in MDUs do not respond to requests for access.
  2. We recognise that this reform could accelerate full fibre rollout to millions of premises in the coming years. Although there is technically an impact on property rights, this is minimal and the public benefits clearly far outweigh the costs. Given this, we do see the potential for extending the legislation in the Telecommunications Infrastructure (Leasehold Property) Bill to other types of premises not currently included in the definition, subject to minimal impact on property owners and appropriate safeguards for their rights. 

Lease agreements for mobile rely on strong relationships between operator and owner

  1. Absentee landlords are not a major blocker to mobile rollout, given the smaller number of sites and the presence of a single landowner. In this market, landowners are generally very aware of the presence of mobile infrastructure, not least because of the physical presence of a mast. Indeed, unlike fixed access networks consisting of a number of buried cables, which require very limited ongoing maintenance, mobile sites, which are individual operational sites, require frequent ongoing maintenance and periodic site upgrades altering the size and scale of the installations that come with significant disruption. These factors mean that a strong and effective working relationship between operators and site owners is essential to the functioning of mobile infrastructure.
  2. Mobile towers tend to also reduce the value and marketability of the property on which they sit, due to their size and visibility, and because mobile sites (particularly rooftop sites) often do not deliver the best coverage to the building owner, but instead to nearby buildings. This is in stark contrast to the installation of full fibre cables, which tend to increase the value of connected properties, not least because each tenant and occupier can obtain the benefits of the fibre connectivity in the building. As a result, rental costs paid by mobile operators for ongoing lease of the land on which their mobile towers sit (whether on a farm or an urban rooftop) is naturally higher than the costs incurred by operators installing fixed access broadband infrastructure via wayleaves (for example into ducts in an MDU).


2017 reforms to the Code were intended to incentivise investment and increase access, but have instead caused a breakdown in the land market for telecoms

  1. Mobile operators historically paid rents based on market-valuation to place equipment on site providers’ land, in return reaching consensual agreements over access rights to carry out maintenance and upgrading work, and reflecting the relationship described above. This commercial approach to lease arrangements allowed for timely and efficient network rollout, avoiding potential delays through contractual disagreements.
  2. This market was underpinned by the Code, which provided a backstop legal framework of rights for both parties. Reforms to the Code introduced in 2017 sought to support infrastructure rollout for both fixed access and mobile networks, incentivising investment and increasing access to fast and reliable digital services for society and the economy. At their heart was a change to the basis of valuation and the imposition of additional rights in favour of the operators, which has removed the ability of a site owner to enter into a reasonable negotiation about the rent they can charge operators for their site.
  3. This change is having dramatic consequences in the mobile market, where operators have routinely pushed for rent reductions in the region of 90% on leases for land on which mobile infrastructure is placed. This far exceeds the forecast in the government’s 2016 Impact Assessment, which predicted the “no network” valuation approach would lead to an average rent reduction of up to 40% over a twenty-year period.
  4.             The new Code has therefore led to a significant increase in legal action taken by operators to try to reduce rental costs. Site providers with very limited resources are commonly threatened with court action, a tactic used by operators to push aggressively for rent reductions. This has led to a proliferation of court cases; according to information provided by the respective courts, there have been 336 referrals in the UK since December 2017. This compares with only a handful of cases in over thirty years under the old Code and is a clear indicator that the system is becoming less effective.
  5. The Code in its current form is not working for the mobile market. By shifting the balance heavily towards the operators, it eliminates the incentives for site owners and operators to make fast and fair equitable commercial agreements. A previously well-functioning market has been replaced by the heavy hand of state regulation, and the slow and bureaucratic outcome is detrimental to 5G rollout and the government’s connectivity objectives. In the fixed access market, however, this has not been a significant issue. The valuations applied to wayleaves such as ducts have always been modest in comparison, reflecting the minimal impact on the landowner and the change to the valuation regime has been much less significant.
  6. By way of comparison, no other comparator country in Western Europe has implemented a similar valuation policy, yet market-determined rents have not held back the deployment of new infrastructure.
  7. The bad feeling among site owners is compounded by growing evidence that rent reductions achieved through the Code are also not translating into greater investment in new digital infrastructure. The Code contains no provision to ensure that this is the case, and documents provided by operators to investors state plainly that only 30% of savings will be reinvested in their networks. Indeed, since 2017, data shows that capital expenditure by Vodafone has actually fallen, despite savings on site rental costs. The fact that this erosion of private property rights has largely provided additional profits to the telecoms operators simply does not seem fair or in the public interest to site owners.
  8. This risk was raised by Parliament during the passage of the Bill that led to the 2017 reforms. The current Chancellor, Rishi Sunak MP, stated at the time: We must not expect the rural people whose income will be reduced by this Bill will receive nothing in return… Interfering with property rights is a major step for the Code.  I therefore urge the government to ensure that the Bill benefits not just mobile operators’ balance sheets but [also] the public interest.”
  9. In addition, changes to the mobile value chain, through the growth of passive infrastructure companies, also appear to have weakened the relationship between rent reductions and network investments. Ongoing consolidation in the market for passive infrastructure has placed further power in the hands of a small number of tower companies who as a result enjoy significant market power. In turn, they accrue bigger rent reductions without any obligations on how they are spent yet continue to receive ‘normal’ rentals from their customers the operators.
  10. By failing to stimulate investment in better connectivity, it is clear that changes to the Code have not represented value for money for the taxpayer. Instead, the rent reductions have created net costs for the exchequer, as site providers – small community groups, sports clubs, or public sector bodies such as local authorities and hospitalshave seen revenues from mobile sites they host reduce drastically. This is particularly frustrating for those groups which – in good faith – took the decision to diversify their income streams to reduce their reliance on taxpayers’ money. It also creates challenging questions for the government, as it proactively encouraged public sector bodies, including local authorities, to reach agreements with mobile operators to host masts. These agreements have now seen their value plummet, at the same time as local authority budgets continue to come under severe strain.


Government proposals to reform the Code will only exacerbate the situation

  1. The government recognised the failure of the Code to speed up infrastructure rollout and has consulted on potential reforms to the Code that it believes will ensure the “aim and ambition of the 2017 reforms” is fully realised and that the Code increases the depth and speed of digital infrastructure deployment.
  2. However, we firmly believe that the government’s proposed changes will not address the underlying causes of the breakdown in the land market for telecoms infrastructure. Instead of looking at the vital role that fair and reasonable valuation along with the balance of rights and control on private land plays in a functioning market, the government is proposing a swathe of new rights are given to operators. It is even willing to apply the law retrospectively. This will only make the situation more asymmetrical and dysfunctional.


The government should carefully consider alternative options to speed up 5G rollout and reduce the digital divide

  1. Instead of exacerbating the problem, the government should be focusing its energy on restoring a functioning land market for mobile telecoms, reconciling the different interests of operators and site owners in a way that is commensurate with the wider public interest. We believe the PAC should support a proven pro-market approach that removes the unnecessary barriers to commercial rollout that have been created by the Code. We think the PAC should carefully consider the case for fundamental changes to the Code – the prize for this could be putting the UK once again at the forefront of digital communications and preventing years of avoidable delays.
  2.             Review the valuation basis and balance of rights set out in the Code. As these currently result in site providers and property owners being forced to accept significantly less for the use of their assets and substantially less than was originally promised, this situation must be looked at again and reformed. Changes should be considered to significantly reduce the severity of any reductions in rental income from masts currently being expected by operators compared to the old Code, and allow the market to ensure a fair rental value for site providers that keeps them interested in providing their land. An independent report by the CEBR that was commissioned by the Protect and Connect Campaign demonstrated that applying a valuation system that allows property owners to charge fair and reasonable rents, while protecting operators against excessive “ransom” changes (modelled on proposals made by the Law Commission in 2013) would boost GDP by £6.2bn over and above the government’s proposals in the next ten years.
  3.             Strengthen the formal industry code of practice. As part of the proposals to implement an alternative dispute resolution system, the government should set clear guidelines for the conduct from both site owners and operators. This would provide security to both parties, and reduce poor behaviours, such as unauthorized access to land by telecoms operators. The same operators demanding rent reductions of 90% or more in the UK to facilitate the rollout of 5G are paying rents to site providers across Europe at similar levels suggested in the Law Commission’s 2013 report.
  4.             Scrap proposals that further erode site providers’ property rights. In particular, the government should rule out any changes that would directly or indirectly allow telecoms companies to change existing agreements retrospectively, tearing up contracts that were entered into voluntarily and leaving site owners with large financial shortfalls.
  5.             These changes would not affect the rollout of fixed broadband. Indeed, they would also be consistent with the extension of rights for operators to build infrastructure where there are absentee landlords.






ANNEX: CEBR Reports – Synopsis

The government’s ECC changes have not delivered a faster 5G rollout, and it is slower than the pre-2017 status quo. The new proposals do not remedy this.


ECC Option

Cumulative GDP benefits by 2022 (£bn)

% national 5G coverage by 2022

Pre-2017 Code



Current Code



Proposed Code



Alternative Code



Reforms enacted in 2017 have enriched mobile operators at the expense of site owners.

Site rental was not unfairly high pre-2017, and MNOs have not used savings to invest in communications networks, nor do rent costs impact their profitability.

November 2021

[1] This figure is from disputed analysis by MNO-supported group Speed Up Britain, and in reality may be far higher.