How should farmers deal with new telecoms laws?

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Confusion over the government’s new Digital Economy Act has been clarified. But farmers could still lose out financially unless they get to grips with the new system. Julie Liddle explains why.

Farmers and landowners are being warned to beware of telecom providers exploiting uncertainty surrounding the introduction of a new Electronic Communications Code in order to gain large rent reductions.

The government’s Digital Economy Act entered the statute books in April, heralding a new Electronic Communications Code designed to improve mobile phone and broadband coverage in rural areas.

There had been serious concerns that the current system of telecoms providers paying market rents to locate masts and other infrastructure on farmland would be replaced by a compulsory purchase scheme.

Providers wanted a regime similar to the compulsory purchase system used by other utilities such as water and electricity. But negotiations have resulted in farmers remaining free to negotiate rents with telecoms firms under the new code, which appears to operate in much the same way as the previous system.

Why farmers should still be concerned over rent reductions

Research by business advisers Deloitte for telecoms providers indicates that the industry pays an average annual rental of £7,500 for sites in rural areas. Yet anecdotal evidence suggests that some operators are proceeding on the basis of paying compensation rather than market rent.

As a result, some providers have sought rents as low as £3,000 for new sites – even though there has been no material change to the way the Electronic Communications Code works.

This has triggered credible concerns that the widespread confusion over the new rules could lead to unadvised landowners accepting lower rents from telecoms providers. If this happened on a large scale it would create precedents for other agreements and could create significant downward pressure on rentals across the broader agricultural sector.

What the new system means on the ground

The main reforms brought in under the code include the imposition of timescales for renegotiation and termination of agreements, aimed at preventing lease renewal discussions dragging on for years.

In addition, the code gives greater freedom for operators to upgrade their infrastructure and other businesses to use it, without having to pay landowners any percentage of extra incomes created.

Professional advisers are optimistic that the new system will create fairer outcomes for both landowners and telecom providers, while giving a much-needed boost to rural phone and broadband coverage.

The importance of securing quality advice

However, the over-arching message to farmers and landowners is not to believe the myths they may have heard about the new code. With this in mind, it is difficult to overstate the importance of getting the right advice to protect farming and landowning interests.

Farmers and landowners entering negotiations with telecoms operators without advice from a professional valuer may do so at considerable financial risk.

For advice on any rural land and property issues, call Julie on 01768 254 354.