The EU Gigabit Infrastructure Act should avoid UK’s Digital Economy Act mistakes
The changes made to the commission’s “EU Gigabit Infrastructure Act” initial proposal, which aims to bring down the cost of building telecom networks, are leading to concerns that these modifications may replicate the issues encountered in the UK with the “Digital Economy Act“.
The Digital Economy Act of 2017 significantly revised the Electronic Communications Code, which regulates the telecoms market in the UK. As a consequence, there has been a significant reduction in the value of rents paid to landowners during the renewal of telecom leases. CLA calculated from a recent survey that its members were receiving some 80% less when they renegotiated the lease. By intervening in the market, the UK law caused the relationship between site providers/landowners and operators, generally tower companies, to become fatally flawed as the balance in the market shifted far too much to one side.
Back then, the UK government had the same objective to make it easier and cheaper for the public to access digital connectivity, however the bill led to a situation where operators increased costs to consumers at the inflation rate + 3.9%. If a customer had a March contract for example their bill would increase some 15%. In fact, the nature of operators like tower companies (Towercos) is to consider their own business rather than to pass reductions in land rent to network operators. Towercoes are a growing industry that builds and maintains telecommunication infrastructure for mobile operators, which remains relatively concentrated worldwide.
In the text proposed by the European Parliament, due to the amendment to Article 3, landowners would need to negotiate the renewal of leases for mobile towers with mast operators under ‘fair and reasonable terms and conditions.’ This positions landowners against more concentrated tower companies, introducing the possibility of taking these negotiations to court if agreements are not reached within one month.
Agreeing to a regulation that grants excessive power to operators could unbalance the market and prove severely detrimental to landowners. It is very possible that it would severely delay deployment by at least 5 to 10 years, which is contrary to the objective of the legislation. Also, the draft provisions would likely discourage landowners to open their lands to new mobile towers.
If the current proposal is approved unchanged, not only are its goals called into question, but it will also have negative consequences for landowners in Europe—both in terms of its direct impacts and the precedent it could set in undermining property rights. Therefore, we hope our concerns are taken into account before the proposal is finalised early next month.
