But how come tech companies immediately get this Bill, while leaseholders are still waiting for basic reforms like new ground rents set to zero as promised two and half years ago?
By Harry Scoffin
Boris Johnson’s majority was curiously slashed on Tuesday as Tory opponents of Chinese tech giant Huawei galvanised behind an obscure technical Bill aimed at confronting unfairness in leasehold.
Led by former party leader Iain Duncan Smith, 38 Conservative MPs backed an amendment to the Telecommunications Infrastructure (Leasehold Property) Bill.
The MPs are upset at the government’s decision to green light Huawei involvement in the UK’s 5G network: many around the world view the state-backed Huawei as a spying vehicle for the Chinese government.
Rebels included former cabinet ministers David David, Iain Duncan Smith, Liam Fox, Damian Green, Esther McVey, Owen Paterson and John Redwood.
The influential chair of the foreign affairs committee Tom Tugendhat also helped cut Mr Johnson’s 80-seat majority to 24 in a foretaste of difficulties to come for the government, which has yet to pass legislation giving effect to the controversial Huawei 5G deal.
Had another 13 MPs switched sides, Mr Johnson would have been dealt a blow to his authority, coming just three months after his landslide election win in December.
The Telecommunications Infrastructure (Leasehold Property) Bill aims to empower internet service providers to go over the heads of unresponsive building owners – that is, freeholders – and install superfast broadband for leaseholders being locked out of decent speeds.
No one anticipated it being a controversial piece of legislation.
Oliver Dowdon, the Secretary of State for Digital, Culture, Media and Sport, wrote to Conservative MPs on the day of the vote to say that the anti-Huawei amendment would jeopardise the leasehold initiative:
“Not the right Bill: The security of our telecoms infrastructure is absolutely paramount. However, the Telecoms Infrastructure (Leasehold Property) Bill is not the right place to deal with the position on high risk vendors. This Bill simply enables telecoms operators to gain access rights to multi-dwelling premises (eg blocks of flats) where occupiers have requested a broadband service and the landlord is not responding.”
Government is pushing ahead with the Bill because telecoms firms have been complaining for years that the leasehold structure being used to organise privately-owned blocks of flats in England and Wales makes it fiendishly difficult to give residents the connectivity they want in their buildings.
Requests to access leasehold apartment buildings to install the cabling infrastructure for high-speed fibre optic broadband services have not been responded to in approximately 40% of cases, according to government figures.
LKP chief executive Sebastian O’Kelly said:
“Leaving aside Huawei and national security, it is interesting that this Bill to facilitate tech operators has had immediate government backing, while reforms that might substantially benefit leaseholders have moved at a snail’s pace.
“We were promised zero ground rents and a ban on leasehold houses in December 2017, and we are still waiting. Yet these commercial interests go straight to the front of the queue.”
In September, the London Evening Standard publicised the frustrations of Openreach bosses whose engineers “face huge obstacles in securing so-called “wayleave” agreements that give them the right to enter apartment blocks.”
“The problem is most acute in the City where complex layers of foreign ownership have made it hard to identify who the freeholders are, resulting in years of costly delay,” the report said.
Openreach told the paper that it was unable to secure consent from the owners of 848 high-rise buildings — containing 9,941 residential or business premises — in the City alone.
Fast broadband roll-out is held up by landlords
Thousands of central London residents are being “locked out” of the quickest broadband by a legal requirement for landlords to give permission before fibre can be installed. Bosses at Openreach, the firm responsible for linking up homes to fibre networks capable of supporting “ultrafast” broadband, say they face huge obstacles in securing so-called “wayleave” agreements that give them the right to enter apartment or office blocks.
It followed a story from The Times, which also stressed Openreach concerns:
Freeholders block fibre-optic broadband installation for flat-owners
Hundreds of thousands of households are missing out on being connected to super-fast broadband because of the opaque world of leasehold property ownership. Campaigners have recently raised concerns about the way many flats are owned by freeholders. These can charge high fees to residents who own only the leasehold.
Absentee freeholders have long been identified as a hindrance to the rollout of fibre optic broadband, with Openreach CEO Clive Selley saying in 2018 that “it’s tough in London to work out who owns buildings and contact them … buildings are owned by people across the planet. I worry that some connections could take years if the building owners don’t come forward.”
The Telecommunications Infrastructure (Leasehold Property) Bill has been billed as an essential part of the government’s ambitious plan to achieve nationwide coverage of “gigabit-capable” broadband by 2025.
“I am excited about the impact that this policy – once enacted and implemented – will have on the scale and pace of roll-out of gigabit-capable networks. It will incentivise operators to deploy quickly, encourage landlords to engage with operators and in due course provide an increased number of tenants with the connectivity they need,” said digital minister Matt Warman.
“Neighbours having a limited choice of providers to access the internet based on whether or not they own the freehold to their home is neither fair nor acceptable.
“The Bill aims to support leaseholders to access the services they request from the providers they want. It already ensures that leaseholders are not per se locked in to services provided by a single provider; nothing in the Bill prevents a leaseholder with an existing gigabit-capable connection from one service requesting an alternative network to come in and request code rights as well.”
LKP chair of trustees Martin Boyd said:
“Too many freeholders have been delaying the installation of fibre networks in their apartment buildings and have on occasions wrongfully extracted fees and commissions from the service providers.”
Where a freeholder repeatedly fails to respond to formal notices from the operator to fulfil requests from flat lessees to have access to “gigabit capable networks”, the telecoms firm can apply to the Upper Tribunal for “interim rights” to enter the apartment building and install their systems.
Government claims this will be a “quicker, cheaper route” than its original proposal of having to apply for “a warranty of entry” and go through the magistrates’ court.
Instead of “code rights” that would run indefinitely, a measure government consulted on in 2018, the solution to a remote freeholder blocking residents from having superfast broadband is “interim code rights” capped at 18 months which, government say, will “incentive operators to continue efforts to contact the landlord” to come to an agreement.
A freeholder will have six weeks to respond to requests before the telecoms firm can make an application to the Upper Tribunal to gain authorisation to force entry.
Leaseholders will be amused to see that the human rights of offshore freeholders, about which the Law Commission was so concerned in its January report on reforming valuation in enfranchisement, have been overruled when it comes to big tech companies providing faster speeds for Netflix streaming:
“The Government considers that the Bill engages in particular Article 1, Protocol 1 (A1P1) of the Convention rights, i.e. the right to peaceful enjoyment of possessions. To the extent that that right is engaged and interfered with, the Government considers that the interference is justified, necessary, and proportionate.
“However, insofar as there is engagement with A1P1 and may be interference with A1P1 as a result of this Bill, the Government considers that any such interference with A1P1 is justified and proportionate. It is justified by reference to the public interest in the increased provision of telecommunications connectivity, as well as express and implied evidential and procedural protections set out on the face of the Bill.”
The government briefing note can be read here:
And the Bill is not without its critics.
Last month the Public Bill Committee received evidence from Ben Hamilton, a leaseholder who suggests that it is more sticking-plaster legislation which does not address the underlying problems with residential leasehold tenure, and will also fail to have its desired effect.
“This proposal does not go far enough. I have been unable to get decent broadband or fibre speeds in several different leasehold flats because the freeholder will not agree to sign the wayleave for various unjustified reasons and in different circumstances. Any legislation should cater for difficult and unwilling freeholders, as well as those who simply do not respond to wayleave requests.
“There are various models of management / freeholder arrangements involved in leasehold flats, which can complicate matters. It is sometimes not clear, even to leaseholders themselves, who actually owns the freehold and who therefore is responsible for signing the wayleave.
“Legislation in this area needs to address the issue of unwilling/unhelpful freeholders, as well as those which do no reply to wayleave requests. There is no chance that Openreach will ever be able to remove the copper phone network without some mechanism to force freeholders by stronger legislation. The needs of residents need to be at the heart of this, the problem is that the people signing the wayleave are very removed from the actual residents and have little to no interest in the needs or desires of residents.”
Great work Harry. I wonder if HR will be maintained when we withdraw from the bill?
Thanks Michael. What do you mean by “withdraw from the bill”? Are you referring to the transition period at the end of the year, when we are supposed to finally Brexit? If so, the UK will remain a signatory to the ECHR. The Strasbourg court is entirely separate from EU institutions. Further, I don’t believe there are any plans to scrap our Human Rights Act. So expect offshore freeholders’ human rights to keep getting deployed as an argument against meaningful leasehold reform.